UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
or
☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to
________________
Commission file number: 001-41668
TRAILBLAZER MERGER CORPORATION I |
(Exact name of registrant as specified in its charter) |
Delaware | | 87-3710376 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer
Identification No.) |
510 Madison Avenue, Suite 1401
New York, NY | | 10022 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including
area code: (212) 586-8224
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class | | Trading Symbol | | Name of each exchange on which registered |
Class A Common Stock | | TBMC | | The Nasdaq Stock Market LLC |
Rights | | TBMCR | | The Nasdaq Stock Market LLC |
Units | | TBMCU | | The Nasdaq Stock Market LLC |
Securities registered pursuant to Section 12(g)
of the Act: None.
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
No ☒
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐
No ☒
Indicate by check mark whether the registrant
(1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| | Emerging Growth Company | ☒ |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. Yes ☐
No ☒
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☐
Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
As of June 30, 2023, the aggregate market value of the registrant’s
common stock held by non-affiliates of the registrant was $70,311,000.
As of March 29, 2024, there were 9,019,499 shares
of Class A common stock, $0.0001 par value and 1 share of Class B common stock, $0.0001 par value, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
TRAILBLAZER MERGER CORPORATION I
Annual Report on Form 10-K for the Year Ended
December 31, 2023
CERTAIN TERMS
References to “the
Company,” “TBMC,” “our,” “us” or “we” refer to Trailblazer Merger Corporation I,
a blank check company incorporated in Delaware on November 12, 2021. References to our “Sponsor” refer to Trailblazer Sponsor
Group, LLC, a Delaware limited liability company. References to our “IPO” refer to the initial public offering of Trailblazer
Merger Corporation I, which closed on March 31, 2023.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form
10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, or the Securities Act, and Section
21E of the Securities Exchange Act of 1934, or the Exchange Act. The statements contained in this report that are not purely historical
are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s
expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts
or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The
words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,”
“intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this report may include,
for example, statements about our:
| ● | ability to complete our initial
business combination; |
| ● | success in retaining or recruiting,
or changes required in, our officers, key employees or directors following our initial business combination; |
| ● | officers and directors allocating
their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination,
as a result of which they would then receive expense reimbursements; |
| ● | potential ability to obtain
additional financing to complete our initial business combination; |
| ● | the ability of our officers
and directors to generate a number of potential investment opportunities; |
| ● | potential change in control
if we acquire one or more target businesses for stock; |
| ● | the potential liquidity and
trading of our securities; |
| ● | the lack of a market for our
securities; |
| ● | use of proceeds not held in
the trust account or available to us from interest income on the trust account balance; or |
| ● | financial performance following
our IPO. |
“2024 SPAC Rules”
are to the new rules and regulations for SPACs adopted by the U.S. Securities and Exchange Commission (the “SEC”) on January
24, 2024, which will become effective on July 1, 2024. The 2024 SPAC Rules require, among other matters, (i) additional disclosures relating
to SPAC business combination transactions; (ii) additional disclosures relating to dilution and to conflicts of interest involving
sponsors and their affiliates in both SPAC initial public offerings and business combination transactions; (iii) additional disclosures
regarding projections included in SEC filings in connection with proposed business combination transactions; and (iv) the requirement
that both the SPAC and its target company be co-registrants for business combination registration statements. In addition, the SEC’s
adopting release provided guidance describing circumstances in which a SPAC could become subject to regulation under the Investment Company
Act (as defined below), including its duration, asset composition, business purpose, and the activities of the SPAC and its management
team in furtherance of such goals. The 2024 SPAC Rules may materially affect our ability to negotiate and complete our initial business
combination and may increase the costs and time related thereto.
The forward-looking statements
contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects
on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties
include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks
or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those
projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except as may be required under applicable securities laws and/or if and when
management knows or has a reasonable basis on which to conclude that previously disclosed projections are no longer reasonably attainable.
PART I
ITEM 1. BUSINESS
Introduction
Trailblazer Merger Corporation
I (the “Company”) is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business
combination. While we may pursue an initial business combination target in any business or industry, we intend to focus our search for
a target business on companies operating in the technology industry.
On March 31, 2023, the Company
consummated the IPO of 6,000,000 units (the “Units”). Each Unit consisted of one share of Class A common stock, $0.0001 par
value (“Common Stock”) and one right (“Right”) to receive one-tenth (1/10) of one share of Common Stock upon the
consummation of an initial business combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds
of $60,000,000. The Company granted the underwriters a 45-day option to purchase up to 900,000 additional Units to cover over-allotments,
if any, which the underwriters exercised in full simultaneously with the consummation of the IPO. The total aggregate issuance by the
Company of 6,900,000 Units at a price of $10.00 per unit resulted in a total gross proceeds of $69,000,000.
Simultaneously with the closing
of the IPO, the Company consummated the private placement (“Private Placement”) with the Sponsor 394,500 units (the “Private
Units”), generating total proceeds of $3,945,000. The Private Units are identical to the Units sold in the IPO. The Sponsor agreed
not to transfer, assign or sell any of the Private Units or underlying securities (except in limited circumstances, as described in the
registration statement) until the completion of the Company’s initial business combination. The holders of the Private Units were
granted certain demand and piggyback registration rights in connection with the purchase of the Private Units. The Private Units were
issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, as the transaction did not involve a public offering.
As of March 31, 2023, a total
of $70,380,000 of the net proceeds from the IPO and the Private Placement was deposited in a trust account established for the benefit
of the Company’s public stockholders. Except with respect to interest earned on the funds held in the trust account that may be
released to us to pay our tax obligations (if any) and $100,000 of interest for our dissolution expenses, the proceeds from this offering
and the sale of the Private Units will not be released from the trust account (1) to us, until the completion of the initial business
combination, or (2) to our public stockholders, until the earliest of (a) the completion of our initial business combination, and then
only in connection with those Class A common stock that stockholders properly elect to redeem, subject to the limitations, (b) the redemption
of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation
(i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to
redeem 100% of our public shares if we do not complete our initial business combination within twelve (12) months from the closing of
this offering (or up to 18 months, if we extend the time to complete an initial business combination) or (ii) with respect to any other
provision relating to stockholders’ rights or pre-business combination activity, and (c) the redemption of our public shares if
we are unable to complete our initial business combination within twelve (12) months from the closing of this offering (or up to 18 months,
if we extend the time to complete an initial business combination), subject to applicable law. Public stockholders who redeem their Class
A common stock in connection with a stockholder vote described in clause (b) in the preceding sentence shall not be entitled to funds
from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an
initial business combination within twelve (12) months from the closing of this offering (or up to 18 months, if we extend the time to
complete an initial business combination), subject to applicable law. The proceeds deposited in the trust account could become subject
to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
Management Team
Our management team is led
by Arie Rabinowitz, our Chief Executive Officer and Director, Scott Burell, our Chief Financial Officer, and Yosef Eichorn, our Chief
Development Officer. Joseph Hammer currently serves as our Chairman of the Board. Barak Avitbul, Olga Castells, and Patrick Donovan are
our independent directors.
Our executive management team
and board of directors have extensive buy-side investing experience and have been involved in the investment of more than $1.5 billion
of capital into well over 1,000 fundings, including mergers & acquisitions, throughout the past 25 years. They also have extensive
experience in identifying, negotiating with and conducting due diligence on companies targeted for acquisition, and consummating acquisitions
across nearly all sectors of the economy including but not limited to: healthcare services; consumer services; chemicals; natural resources;
manufacturing and industrial; consumer and retail; gaming and leisure; and media, telecom and technology. We believe our management’s
deep network of CEO-level and other C-suite/board relationships in addition to pre-eminent private and public market investors will present
us with a substantial number of potential business combination targets.
We believe we will greatly
benefit from the experiences of our executive officers and directors as we seek to identify and consummate an initial business combination.
Our team has extensive experience in the financial services sector as investors, managers, principals, advisors or directors of companies
operating in the technology sector. They also have extensive experience in identifying, negotiating with and conducting due diligence
on companies targeted for acquisition and consummating acquisitions in the technology sector. Prior to the consummation of our initial
business combination, we intend to leverage the industry experience of our executive officers and board, including their extensive contacts,
relationships and access to acquisition opportunities.
Arie Rabinowitz - Chief Executive Officer and Director
Mr. Rabinowitz is the co-founder
of LH Financial Services Corp., a family office service company for a single family. The family’s primary securities investment
vehicle is Alpha Capital Anstalt. Mr. Rabinowitz served as Vice President and Chief Investment Officer of LH Financial from inception
in 1997 and until 2010. Since 2010 Mr. Rabinowitz has served as Chief Executive Officer of LH Financial. LH Financial evaluates investment
opportunities in a wide variety of asset classes including public companies, private companies, development stage companies, technology
institutions, startup incubators, and other ventures to determine if they fit within the framework of the family office’s investment
criteria. LH Financial, under the guidance of Mr. Rabinowitz, subsequently facilitates investments and exits from investments approved
by the family. LH Financial also participates and facilitates charitable endeavors for itself and the family in many charitable causes,
including organizations that foster education, family, and health across North America, Israel, and elsewhere. Mr. Rabinowitz advises,
on a pro bono basis, a charity organization in the U.S. and Israel. In addition, Mr. Rabinowitz serves on the board of directors for Areivim,
Inc., a community committed to the well-being of at-risk children, their parents, and siblings. Mr. Rabinowitz is the founder and CEO
of ACR Foundation, a 501(c)3 registered charitable trust focused on both local and international charitable causes. Mr. Rabinowitz is
the father-in-law of Mr. Eichorn. Mr. Rabinowitz graduated from Lander College of Arts & Sciences with a BS in Mathematics.
Scott Burell serves
as our Chief Financial Officer. Since August 2018, Scott Burell has been the Chief Financial Officer of AIVITA Biomedical, Inc., an Irvine
California-based immuno-oncology company focused on the advancement of commercial and clinical-stage programs utilizing curative and regenerative
medicines. From November 2006 until its sale to Invitae Corp. (NYSE: NVTA) in November 2017, Mr. Burell was the Chief Financial Officer,
Secretary and Treasurer of CombiMatrix Corporation (NASDAQ: CBMX), a family health-focused clinical molecular diagnostic laboratory specializing
in pre-implantation genetic screening, prenatal diagnosis, miscarriage analysis, and pediatric developmental disorders. Mr. Burell successfully
led the split-off of CombiMatrix in 2007 from its former parent, has led several successful public and private debt and equity financing
transactions as well as CombiMatrix’s reorganization in 2010. Prior to this, Mr. Burell had served as CombiMatrix’s Vice President
of Finance since 2001 and as its Controller from 2001 to 2006. From 1999 until the time that he first joined CombiMatrix in 2001, Mr.
Burell was the Controller for Network Commerce, Inc. (NASDAQ: SPNW), a publicly traded technology and information infrastructure company
located in Seattle. Prior to this, Mr. Burell spent nine years with Arthur Andersen’s Audit and Business Advisory practice in Seattle.
Mr. Burell is also a member of the Board of Directors of Microbot Medical (NASDAQ: MBOT), an Israeli-based medical device company. Mr.
Burell obtained his Washington state CPA license in 1992 and is a Certified Public Accountant (currently inactive). Mr. Burell holds BS
degrees in Accounting and Business Finance from Central Washington University.
Yosef Eichorn - Chief Development
Officer
Mr. Eichorn currently serves
as the Vice President of Investments at LH Financial Services Corp., a family office service company for a single family. The family’s
primary securities investment vehicle is Alpha Capital Anstalt. Mr. Eichorn has served as Vice President of Investments at LH Financial
since January 2020 where he focuses on evaluating new investment opportunities in addition to monitoring the family’s active portfolio
companies. From March 2019 to September 2021, Mr. Eichorn served as Compliance Officer at LH Financial. He was responsible for compliance,
developing and updating LH Financial’s and its family client’s compliance framework and procedures to ensure that LH and its
family client comply with applicable policies and regulations. From July 2018 to December 2019, Mr. Eichorn served as a Research Analyst
at LH Financial. Mr. Eichorn is the son-in-law of Mr. Rabinowitz. Yosef Eichorn graduated from Empire State College with a BS in Liberal
Arts.
Joseph Hammer - Chairman of The
Board of Directors
Since 2010, Mr. Hammer has
served as the Chief Investing Officer (“CIO”) at LH Financial Services Corp., a family office service company for a single
family. The family’s primary securities investment vehicle is Alpha Capital Anstalt. LH Financial evaluates investment opportunities
in a wide variety of asset classes including public companies, private companies, merger candidates, development stage companies, technology
institutions, startup incubators, and other ventures to determine if they fit within the framework of the family office’s investment
criteria. As the CIO, Mr. Hammer sources potential investments for the family office and provides continued guidance to Alpha for many
of the family’s investments and mergers, and in particular, within the Middle East. In addition, Mr. Hammer originates numerous
charitable endeavors and relationships for LH Financial and the family, including organizations that foster education, family, and health
across North America, Israel, and elsewhere. Mr. Hammer is a Board Member of Gratitude Railroad LLC, a community of investors, operating
an alternative investment platform, who are inspired and dedicated to solving environmental and social problems through the profitable
deployment of financial, intellectual, and human capital. Mr. Hammer is the founder of The JDH Foundation, a 501(c)3 charitable organization
which supports both local and international charitable causes. He is also the Chairman of the Executive Committee of Chai Lifeline, Inc.,
a health support network for children, families and communities impacted by serious illness or loss. He serves as a Board Member of The
Duvdevan Foundation, a support system for soldiers in the elite Duvdevan Unit of the Israeli Defense Forces.
Barak Avitbul is a
member of the Board of Directors. Mr. Avitbul is the Chief Executive Officer of NetNut Ltd., and has been a member of senior management
of Safe-T Group Ltd. (Nasdaq, TASE: SFET), a global provider of cybersecurity and privacy solutions to consumers and enterprises, since
the completion of the acquisition of NetNut in June 2019 by Safe-T Group. NetNut provides business proxy network solutions that enable
multiple business use cases, such as online ad verification, retail price and inventory comparisons, network security penetration, load
testing of applications, and other data mining and analysis. Mr. Avitbul has also served as the Chief Executive Officer of ORB Spring
Ltd. Mr. Avitbul has founded and led several successful internet and software companies among them DiviNetworks Ltd., where he built global
network optimization as a service operation in over fifty countries around the world and was the first Israeli company to raise investment
from the World Bank. Before founding DiViNetworks, Mr. Avitbul founded Key2Peer, a provider of anti-piracy and promotional services for
the P2P market, leading it to a net profit in less than twelve months. Prior to that, Mr. Avitbul served as a consultant for several premier
technology companies in diverse sectors, among them Rosetta Genomics (NASDAQ: ROSG), where he served as the head of algorithm research.
Mr. Avitbul also served as Director of Research and Development at iMDsoft, playing an instrumental role in creating and launching successful
products in the healthcare clinical information management market. Mr. Avitbul holds an L.L.B in Law and BS in Computer Science, both
from Tel Aviv University.
Olga Castells is a member
of the Board of Directors. Ms. Castells is a Tax Senior Director at Oracle Corporation, a position she has held since 2010, where she
is responsible for audit controversy matters in Canada and Latin America, a region with approximately $3b in annual revenue. Ms. Castells
currently manages 100+ audits and tax cases (at various levels of appeal) involving income and non-income based tax in nine countries.
Ms. Castells is also involved in the due diligence process for acquisitions with presence in Canada, Latin America and the Caribbean.
Prior to joining Oracle, Ms. Castells worked for PricewaterhouseCoopers (PwC) for five years and held a variety of positions where she
performed international tax planning for large multi-national clients with operations in Europe, Asia, Latin America and the Caribbean
in a variety of industries, including consumer products, retail, manufacturing, franchise services and power generation. Ms. Castells
completed a Master of Science in Taxation from University of Miami and graduated from University of Miami cum laude with a BS in Accounting.
Ms. Castells is a Certified Public Accountant licensed in Florida.
Patrick Donovan is a
member of the Board of Directors. Mr. Donovan is a founding partner of Lokahi Capital, a private equity firm located in Delray, Florida.
Mr. Donovan brings an international business background, working in Europe and the United States, while serving a global client base.
His career began in commercial real estate finance and evolved with a move to investment banking with Credit Suisse in London in 2005.
He also held positions as a Fixed Income Portfolio Manager at UBS in London and a Structured Credit Trader at AVM/III Capital located
in Florida, US. Mr. Donovan has been a Board of Trustee member of Gulf Stream School since 2018 and currently chairs the Finance Committee.
Mr. Donovan earned a Master of Business Administration from Washington University Olin School of Business and a BS in Finance from University
of Missouri.
Market Opportunity
Our management team has extensive
experience investing, operating and executing mergers and acquisitions within the technology industry. With numerous credible resources
pegging the size of the global technology industry at $5 trillion in 2021 combined with management’s expertise and experience, we
intend to focus our initial business combination efforts on the technology industry.
We are considering the entire
technology industry when we search for a target business, but we are primarily focused in searching in the following segments:
Cloud as a Service Businesses
Workforce challenges and changing
IT demands spurred by the pandemic are accelerating the shift to services: we believe that software-as-a-service, infrastructure-as-a-service
and platform-as-a-service will continue to gain popularity, and are critical to creating new solutions and business models to thrive in
the new normal. Cloud is rapidly becoming the preferred platform for enabling online services and spurring innovation. We believe there
are a multitude of potential opportunities in this industry sector.
Supply Chain Technologies
The supply chain disruption
that occurred amid the pandemic affected everything from automotive production to consumer appliances, medical devices and even toys.
Its impact extended far beyond the semiconductor sector, exposing critical chokepoints across complex distribution and supply chains.
It is management’s opinion that as companies continue to recover from pandemic-induced supply chain disruptions, they will start
proactively preparing for future uncertainty and other systemic risks. To do it they will require new technical solutions to promote efficiency
and reliability.
Servicing the Hybrid Workforce
As a result of the pandemic,
more people than ever before have been working in a hybrid manner, with no end in sight. To attract and retain talent, companies are trying
to capture the best of both the at-home experience and the in-office one, balancing the flexibility their employees are demanding with
the business needs of their organization. With more experience utilizing a hybrid workforce under their collective belts, we believe companies
will evolve their cultures and accelerate experimentation with collaboration technologies.
eSports
At approximately $1 billion
in annual revenues, the eSports technology segment is relatively small in comparison to some of the other segments we will explore for
a business combination, however we believe the growth potential for eSports is substantial. The viewership for select eSports tournaments
is beginning to rival the viewership for many select golf tournaments and shows no signs of slowing. Management believes there are opportunities
for new technologies to service and monetize many aspects of the eSports sector.
Business Strategy
Our management team’s
objective is to generate attractive returns and create value for our stockholders by applying a disciplined strategy of identifying attractive
investment opportunities that could benefit from the addition of capital, liquidity, and management expertise.
We will leverage our management
team’s broad network of potential public transaction sources to find an opportunity where their expertise could effect a positive
transformation of the existing business to improve the overall value proposition while maximizing stockholder value.
We believe successful special
purpose acquisition companies require a differentiated story to make a business combination attractive for potential sellers of businesses
who become partners in a public markets context.
We believe that our team will
be an attractive partner given our proven track record of both operational and financial success in small sized public companies and our
deep understanding of how to navigate complicated stockholder and capital markets dynamics in a small-cap context.
Acquisition Criteria
We are leveraging the extensive
network and experience of our management team in identifying a suitable target within the technology industry and structuring a business
combination that is attractive to both the target and our public stockholders. We have identified the following general criteria and guidelines
that we believe are important in evaluating prospective target businesses. While we intend to use these criteria and guidelines in evaluating
prospective businesses, we may deviate from these criteria and guidelines should we see fit to do so:
Experienced Management Teams
We are seeking candidates who
have strong, experienced management teams with a focus on driving revenue growth, enhancing profitability and generating strong free cash
flow. We seek to partner with the potential target’s management team and expect that the operating and financial abilities of our
management and board will help the potential target company to unlock opportunities for future growth and enhanced profitability.
Attractive Valuations
We will only evaluate a business
that, based on our due diligence and industry experience, represents an attractive valuation relative to publicly listed companies with
similar characteristics or in similar industry segments.
Will Benefit from Being a Public Company
We are pursuing a business
that will benefit from being a public company, including potentially having broader access to capital and a public currency for acquisitions.
Clear Competitive Advantages
We are targeting businesses
that differentiate themselves from their peers in ways that are difficult to replicate and have clear competitive advantages.
High Growth Potential and Cash Flow
We seek businesses that are
well positioned to grow in their respective markets and which have clear plans on how to leverage additional capital to accelerate growth.
We are targeting businesses that have had, or expect to have, strong cash flow generation.
Employees
We currently have two officers.
These individuals are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time
as they deem necessary, in the exercise of their respective business judgement, to our affairs until we have completed our initial business
combination. The amount of time they will devote in any time period will vary based on whether a target business has been selected for
our initial business combination and the stage of the initial business combination process we are in. We do not intend to have any full-time
employees prior to the completion of our initial business combination. We do not have an employment agreement with any member of our management
team.
ITEM 1A. RISK FACTORS
As a smaller reporting company,
we are not required to make disclosures under this Item.
ITEM 1B. UNRESOLVED STAFF
COMMENTS
Not applicable.
ITEM 1C. CYBER
SECURITY
We are a SPAC with no business
operations. Since our IPO, our sole business activity has been identifying and evaluating suitable acquisition transaction candidates.
Therefore, we do not consider that we face significant cybersecurity risk and have not adopted any cybersecurity risk management program
or formal processes for assessing cybersecurity risk. However, because we have investments in our Trust Account and bank deposits and
we depend on the digital technologies of third parties, we and third parties may be subject to attacks on or security breaches in our
or their systems. Because of our reliance on the technologies of third parties, we also depend upon the personnel and the processes of
third parties to protect against cybersecurity threats, and we have no personnel or processes of our own for this purpose. Our board of
directors is generally responsible for the oversight of risks from cybersecurity threats, if any. We have not encountered any cybersecurity
incidents since our IPO.
ITEM 2. PROPERTIES
Our executive offices are
located at 510 Madison Avenue, Suite 1401, New York, NY 10022, and our telephone number is 212-586-8224. We consider our current office
space adequate for our current operations.
ITEM 3. LEGAL PROCEEDINGS
We
may be subject to legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We are not
currently a party to any material litigation or other legal proceedings brought against us. We are also not aware of any legal proceeding,
investigation or claim, or other legal exposure that has a more than remote possibility of having a material adverse effect on our business,
financial condition or results of operations.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our Units began to trade on
The Nasdaq Global Market, or Nasdaq, under the symbol “TBMCU” on or about March 29, 2023, and the shares of common stock and
rights began separate trading on Nasdaq under the symbols “TBMC” and “TBMCR,” respectively, on or about May 15,
2023.
Holders of Record
As of March 29, 2024, there were 9,019,500 of our shares of common
stock issued and outstanding held by approximately five stockholders of record. The number of record holders was determined from the records
of our transfer agent and does not include beneficial owners of shares of common stock whose shares are held in the names of various security
brokers, dealers, and registered clearing agencies.
Dividends
We have not paid any cash
dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of an initial business combination.
The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general
financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination
will be within the discretion of our board of directors at such time. It is the present intention of our board of directors to retain
all earnings, if any, for use in our business operations and, accordingly, our board of directors does not anticipate declaring any dividends
in the foreseeable future. In addition, our board of directors is not currently contemplating and does not anticipate declaring any share
dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive
covenants we may agree to in connection therewith.
Securities Authorized for Issuance Under Equity
Compensation Plans
None.
Recent Sales of Unregistered Securities
There were no unregistered
securities to report which have not been previously included in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
Use of Proceeds
The Company is a blank check
company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar
business combination with one or more businesses, which we refer to as our initial business combination.
On March 31, 2023, the Company
consummated the IPO of 6,000,000 Units. Each Unit consisted of one Common Stock and one Right to receive one-tenth (1/10) of one share
of Common Stock upon the consummation of an initial business combination. The Units were sold at an offering price of $10.00 per Unit,
generating gross proceeds of $60,000,000.
Simultaneously with the closing
of the IPO, the Company consummated the Private Placement with the Sponsor, 394,500 Private Units generating total proceeds of $3,945,000.
The Private Units are identical to the Units sold in the IPO. The Sponsor agreed not to transfer, assign or sell any of the Private Units
or underlying securities (except in limited circumstances, as described in the registration statement) until the completion of the Company’s
initial business combination. The holders of the Private Units were granted certain demand and piggyback registration rights in connection
with the purchase of the Private Units. The Private Units were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended,
as the transaction did not involve a public offering.
Purchases of Equity Securities by the Issuer
and Affiliated Purchasers
None.
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Annual Report includes
“forward-looking statements” that are not historical facts and involve risks and uncertainties that could cause actual results
to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Annual
Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management
for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,”
“intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify
such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s
current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ
materially from the events, performance and results discussed in the forward-looking statements. For information identifying important
factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to
“Cautionary Note Regarding Forward-Looking Statements” elsewhere in this Annual Report on Form 10-K. The Company’s securities
filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities
law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information,
future events or otherwise.
Overview
We are a blank check company
formed under the laws of the State of Delaware on November 12, 2021 for the purpose of effectuating a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate
our initial business combination using cash from the proceeds of our initial public offering (the “Initial Public Offering”)
and the private placement of the Private Units, the proceeds of the sale of our shares in connection with our initial business combination
(pursuant to forward purchase agreements or backstop agreements we may enter into following the consummation of the Initial Public Offering
or otherwise), shares issued to the owners of the target, debt issued to bank or other lenders or the owners of the target, or a combination
of the foregoing.
The issuance of additional
shares in connection with an initial business combination:
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may significantly dilute the equity interest of our investors who would not have pre-emption rights in respect of any such issuance; |
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may subordinate the rights of holders of shares of common stock if we issue shares of preferred stock with rights senior to those afforded to our shares of common stock; |
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could cause a change in control if a substantial number of shares of our common stock is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; |
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may have the effect of delaying or preventing a change of control of us by diluting the stock ownership or voting rights of a person seeking to obtain control of us; and |
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market prices for our common stock, rights and/or warrants. |
Similarly, if we issue debt securities or otherwise
incur significant debt, it could result in:
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default and foreclosure on our assets if our operating revenues after an initial business combination are insufficient to repay our debt obligations; |
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acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant; |
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our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; |
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our inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding; |
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using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our common stock if declared, our ability to pay expenses, make capital expenditures and acquisitions, and fund other general corporate purposes; |
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limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate; |
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increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; |
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limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, and execution of our strategy; and |
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other purposes and other disadvantages compared to our competitors who have less debt. |
We expect to continue to incur significant costs
in the pursuit of our initial business combination plans. We cannot assure you that our plans to raise capital or to complete our initial
business combination will be successful.
Results of Operations
We
have neither engaged in any operations nor generated any revenues to date. Our only activities for the period November 12, 2021 (inception)
through December 31, 2023 were organizational activities, those necessary to prepare for the Initial Public Offering, described below,
and identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion
of our Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the trust
account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance),
as well as for due diligence expenses.
For the year ended December 31, 2023, we had a net income of $1,347,254,
which consists of interest earned on marketable securities held in Trust Account of $2,606,031 and unrealized gain on marketable securities
held in Trust Account of $8,832, offset by the operating costs of $543,536, stock-based compensation expense of $207,087 and provision
for income taxes of $516,986.
Liquidity and Capital Resources
As of December 31, 2023, we
had $607,816 in our operating bank account available for working capital needs. All remaining cash was held in the trust account and is
generally unavailable for our use prior to an initial business combination.
On March 31, 2023, the Company
consummated the IPO of 6,000,000 units (the “Units”). Each Unit consisted of one share of Class A common stock, $0.0001 par
value (“Common Stock”) and one right (“Right”) to receive one-tenth (1/10) of one share of Common Stock upon the
consummation of an initial business combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds
of $60,000,000. The Company granted the underwriters a 45-day option to purchase up to 900,000 additional Units to cover over-allotments,
if any, which the underwriters exercised in full simultaneously with the consummation of the IPO. The total aggregate issuance by the
Company of 6,900,000 Units at a price of $10.00 per unit resulted in a total gross proceeds of $69,000,000.
Simultaneously with the closing
of the IPO, the Company consummated the Private Placement with the Sponsor 394,500 units (the “Private Units”), generating
total proceeds of $3,945,000. The Private Units are identical to the Units sold in the IPO. The Sponsor agreed not to transfer, assign
or sell any of the Private Units or underlying securities (except in limited circumstances, as described in the registration statement)
until the completion of the Company’s initial business combination. The holders of the Private Units were granted certain demand
and piggyback registration rights in connection with the purchase of the Private Units. The Private Units were issued pursuant to Section
4(a)(2) of the Securities Act of 1933, as amended, as the transaction did not involve a public offering.
As of March 31, 2023, a total
of $70,380,000 of the net proceeds from the IPO and the Private Placement was deposited in a trust account established for the benefit
of the Company’s public stockholders. Except with respect to interest earned on the funds held in the trust account that may be
released to us to pay our tax obligations (if any) and $100,000 of interest for our dissolution expenses, the proceeds from this offering
and the sale of the Private Units will not be released from the trust account (1) to us, until the completion of the initial business
combination, or (2) to our public stockholders, until the earliest of (a) the completion of our initial business combination, and then
only in connection with those Class A common stock that stockholders properly elect to redeem, subject to the limitations, (b) the redemption
of any public shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation
(i) to modify the substance or timing of our obligation to allow redemption in connection with our initial business combination or to
redeem 100% of our public shares if we do not complete our initial business combination within twelve (12) months from the closing of
this offering (or up to 18 months, if we extend the time to complete an initial business combination) or (ii) with respect to any other
provision relating to stockholders’ rights or pre-business combination activity, and (c) the redemption of our public shares if
we are unable to complete our initial business combination within twelve (12) months from the closing of this offering (or up to 18 months,
if we extend the time to complete an initial business combination), subject to applicable law. Public stockholders who redeem their Class
A common stock in connection with a stockholder vote described in clause (b) in the preceding sentence shall not be entitled to funds
from the trust account upon the subsequent completion of an initial business combination or liquidation if we have not consummated an
initial business combination within twelve (12) months from the closing of this offering (or up to 18 months, if we extend the time to
complete an initial business combination), subject to applicable law. The proceeds deposited in the trust account could become subject
to the claims of our creditors, if any, which could have priority over the claims of our public stockholders.
We
intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust
account (less income taxes payable), to complete our Business Combination. To the extent that our capital stock or debt is used, in whole
or in part, as consideration to complete our Business Combination, the remaining proceeds held in the trust account will be used as working
capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
In order to fund working capital
deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors
or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a business combination, we would repay
such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside
the trust account to repay such loaned amounts but no proceeds from our trust account would be used for such repayment. Up to $1,500,000
of such Working Capital Loans (as defined below) may be convertible into Units of the post-business combination entity at a price of $10.00
per unit. The Units would be identical to the Private Units. As of December 31, 2023 and 2022, there was no amount outstanding under the
Working Capital Loan.
We
will need to raise additional capital through loans or additional investments from our Sponsor, stockholders, officers, directors, or
third parties. Our officers, directors and Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in
whatever amount they deem reasonable in their sole discretion, to meet our working capital needs. Accordingly, we may not be able to obtain
additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity,
which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and
reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms,
if at all.
Off-Balance Sheet Arrangements
We did not have any off-balance
sheet arrangements as of December 31, 2023.
Contractual Obligations
Promissory Notes - Related Party
On May 17, 2022, we issued
an unsecured promissory note to the Sponsor, pursuant to which we may borrow up to an aggregate principal amount of $300,000 (the “Note”).
On January 20, 2023, the maximum amount available under the Note was further increased to $400,000. As of March 31, 2023, both we and
the Sponsor mutually agreed to extend the maturity date of the original Note. The Note is non-interest bearing and payable on the earlier
of (i) the close of our initial business combination or (ii) September 30, 2024. On November 21, 2023, the Note was further amended to
permit us to pay certain expenses of the Sponsor which would reduce the principal balance of the Note by the same amount. As of December
31, 2023 and 2022, there was $321,585 and $225,000, respectively, outstanding under the Note.
Registration and Stockholder’s Rights
Pursuant
to a registration rights agreement entered into on March 28, 2023, the holders of the founder shares, Placement Units and any unit
that may be issued upon conversion of the Working Capital Loans (and any underlying shares of Class A common stock) are entitled to registration
rights pursuant to a registration rights agreement requiring the Company to register such securities for resale (in the case of the founder
shares, only after conversion to shares of our Class A common stock). The holders of these securities will be entitled to make up to three
demands, excluding short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to
require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration
rights agreement will provide that the Company will not be required to effect or permit any registration or cause any registration statement
to become effective until termination of the applicable lock-up period. The registration rights agreement does not contain liquidated
damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear
the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
On March 28, 2023, in connection
with the Initial Public Offering, we entered into an underwriting agreement with LifeSci Capital LLC and Ladenburg Thalmann & Co.
Inc., as representative of the underwriters named therein.
The underwriters were entitled to a cash underwriting discount of $0.15
per Unit, or $1,035,000 in the aggregate, which was paid upon the closing of the Initial Public Offering. In addition, $0.30 per Unit
sold in the Initial Public Offering, or $2,070,000 in the aggregate will be payable to the underwriters for deferred underwriting commissions.
The deferred fee will become payable to the underwriters from the amounts held in the trust account solely in the event that we complete
an initial business combination, subject to the terms of the underwriting agreement.
Advisory Agreement
Pursuant to the advisory agreement
entered into in September 2022 with LifeSci Capital LLC (“LifeSci”), further amended in March 2023, upon the consummation
of the initial business combination, we have agreed to pay LifeSci equal to one and one half (1.5%) percent of the total consideration
paid in connection with the initial business combination in the form of equity interests in the entity that survives any such business
combination in exchange for the provision by the underwriters of certain services relating to the initial business combination.
For the purposes of this section,
“total consideration” means the total market value of, without duplication, all cash, securities, or other property paid or
transferred at the closing of such transaction by the target’s stockholders or to be paid or transferred in the future to the target’s
stockholders with respect to such transaction (other than payments of interest or dividends and any contingent or earnout consideration
based upon future performance of the combined companies, however characterized), including, without limitation, to the extent applicable,
any net value paid in respect of (i) the assets of the target and (ii) the capital stock of the target (and the spread value
of any “in the money” securities convertible into options, warrants or other rights to acquire such capital stock), after
giving effect to the assumption, retirement or defeasance, directly or indirectly (by operation of law or otherwise), of any long-term
liabilities of the target or repayment of indebtedness, including, without limitation, indebtedness secured by the assets of the target,
capital leases or preferred stock obligations; provided, that for the avoidance of doubt, any funds in the trust account (as may be applicable
in the case of a Transaction) or financing proceeds raised in connection with the closing of the transaction (including by way of an offering,
the compensation to underwriters for which is provided for below), in either case, that are not paid to the target’s stockholders
as consideration in the transaction will not be included as part of the Total Consideration.
For purposes of this section,
the market value of any publicly traded common stock, whether already outstanding or newly-issued, will be equal to the greater of: (i) the
value of such common stock issued to the target upon the closing of a transaction at a price equal to $10.00 per share; and (ii) the
dollar volume-weighted average price (VWAP) for such security on the principal securities exchange or securities market on which such
security is then traded during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time,
as reported by Bloomberg through its “HP” function (set to weighted average) for the first five (5) trading days following
the consummation of the transaction.
Additionally, we agreed to
reimburse the underwriters for all out-of-pocket documented costs and expenses (including fees and expenses of counsel) incurred by the
underwriters in connection with provision of such services, up to $50,000 in the aggregate, and, upon the consummation of the initial
business combination, to reimburse the underwriters for any such expenses incurred in excess of $50,000.
Investment Management Trust Agreement
On March 28, 2023, in connection
with the Initial Public Offering, we entered into an agreement with Continental Stock Transfer & Trust Company (“Trustee").
The Trustee agreed to manage, supervise and administer the Trust Account subject to the terms and conditions set forth in the agreement
and in a timely manner, upon the written instruction of the Company, invest and reinvest the Property in United States government
securities within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, having a maturity of 185 days or
less, or in money market funds meeting the conditions of paragraphs (d)(1), (d)(2), (d)(3) and (d)(4) of Rule 2a-7 promulgated under the
Investment Company Act of 1940, as amended (or any successor rule), which invest only in direct U.S. government treasury obligations,
as determined by us; the Trustee may not invest in any other securities or assets, it being understood that the Trust Account will earn
no interest while account funds are uninvested awaiting our instructions hereunder; and while account funds are invested or uninvested,
the Trustee may earn bank credits or other consideration. We agreed to give all instructions to the Trustee in writing, signed by the
Chairman of the Board, Chief Executive Officer, Chief Financial Officer or Secretary. In addition, the Trustee shall be entitled to rely
on, and shall be protected in relying on, any verbal or telephonic advice or instruction which it, in good faith and with reasonable care,
believes to be given by any one of the persons authorized to give written instructions, provided that we shall promptly confirm such instructions
in writing. We will Pay the Trustee the fees set forth in the agreement, including an initial acceptance fee, annual administration fee,
and transaction processing fee which fees shall be subject to modification by the parties from time to time.
Critical Accounting Estimates
Certain of our accounting
policies require that management apply significant judgments in defining the appropriate assumptions integral to financial estimates.
On an ongoing basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements
are presented fairly and in accordance with U.S. GAAP. Judgments are based on historical experience, terms of existing contracts, industry
trends and information available from outside sources, as appropriate. Some of the more significant estimates are in connection with determining
the fair value of the stock-based compensation and the derivative financial instruments at the time of the initial public offering. However,
by their nature, judgments are subject to an inherent degree of uncertainty, and, therefore, actual results could differ from our estimates.
We have identified the following critical accounting estimates:
Stock-Based Compensation
We adopted ASC Topic 718,
Compensation—Stock Compensation, guidance to account for its stock-based compensation. It defines a fair value-based method of accounting
for an employee stock option or similar equity instrument. We recognize all forms of share-based payments, including stock option grants,
warrants and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are
ultimately expected to vest. Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model.
Grants of share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based
payment, which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods,
which is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost
is reversed in the period related to the termination of service. Stock-based compensation expenses are included in costs and operating
expenses depending on the nature of the services provided in the statement of operations. On March 28, 2023, the Chief Financial Officer
and three directors (the “subscribers”) entered into subscription agreements with the Sponsor for an interest in the Sponsor
company for their own investment purposes. The interest is backed by our Class A common stock owned as of March 28, 2023, the date of
issuance. As such, the subscribers will participate in the profits or losses of the Sponsor company though date of liquidation. The subscription
into interests of the Class A common stock founder shares to the management and directors is in the scope of FASB ASC Topic 718, “Compensation-Stock
Compensation” (“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured
at fair value upon the grant date. The 47,500 Class A common stock which support the subscription interests of management and the directors
has a fair value of $207,087 or $4.36 per share, which has been recorded as stock-based compensation. The fair value was determined using
a Monte Carlo Model with a volatility of 7.2%, risk-free rate of 3.97% and a stock price of $9.89 as of the valuation date of March 28,
2023.
Derivative Financial Instruments
We accounted for Rights as
equity-classified instruments based on an assessment of the Rights’ specific terms and applicable authoritative guidance in FASB
ASC Topic 815, “Derivatives and Hedging”. The assessment considered whether the Rights were freestanding financial instruments
pursuant to ASC 480, met the definition of a liability pursuant to ASC 480, and whether the Rights met all the requirements for equity
classification under ASC 815, including whether the Rights were indexed to the Company’s own shares of common stock, among other
conditions for the equity classification. The rights were valued based on market comparables. The following criteria was utilized to select
comparable Special Purpose Acquisition Companies who were pre-business combination and included rights as part of their units that were
publicly trading with significant time remaining to complete their initial business combination:
Criteria | |
Low | | |
High | |
IPO Proceeds (in millions of dollars) | |
| 50 | | |
| 240 | |
Warrant Coverage | |
| — | | |
| 1.0 | |
Rights Coverage (per unit) | |
| 0.05 | | |
| 0.20 | |
Remaining Months to Complete | |
| — | | |
| 13 | |
The appraiser utilized the median market price
of 0.108 as the fair value of the Rights included in the initial public offering.
Recent Accounting Standards
In June 2016, the FASB issued
Accounting Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of
Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized cost basis
to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information
about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability
of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing the effective date
for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within
those fiscal years, with early adoption permitted. We adopted ASU 2016-13 on January 1, 2023. The adoption of ASU 2016-13 did not have
a material impact on the financial statements.
In December 2023, the FASB
issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental
income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements.
ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. Our management does not believe
the adoption of ASU 2023-09 will have a material impact on our financial statements and disclosures.
Management does not believe
that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our
financial statements.
JOBS Act
The
Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting
requirements for qualifying public companies. We qualify as an “emerging growth company” and under the JOBS Act are allowed
to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We adopted
ASU 2016-13 on January 1, 2023, and we are electing to delay the adoption of other new or revised accounting standards, and as a result,
we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging
growth companies. As a result, the financial statements may not be comparable to companies that comply with new or revised accounting
pronouncements as of public company effective dates.
Additionally,
we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject
to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions
we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over
financial reporting pursuant to Section 404,(ii) provide all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted
by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report
providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain
executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s
compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of our Initial
Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company
we are not required to make disclosures under this Item.
ITEM 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA
This information appears following
Item 15 of this Report and is included herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures
are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized,
and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated
to our management, including our principal executive officer and principal financial officer or persons performing similar functions,
as appropriate to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management,
including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness
of our disclosure controls and procedures as of the end of the fiscal quarter ended December 31, 2023, as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and
accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective
at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in
reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s
rules and forms.
Management’s Report on Internal Controls
Over Financial Reporting
As
required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing
and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting
purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:
(1) | | pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of our Company, |
(2) | | provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP,
and that our receipts and expenditures are being made only in accordance with authorizations of our Management and directors, and |
(3) | | provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could
have a material effect on the financial statements. |
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial
statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate. Management assessed
the effectiveness of our internal control over financial reporting as of December 31, 2023. In making these assessments, Management used
the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated
Framework (2013). Based on our assessments and those criteria, Management determined that we maintained effective internal control over
financial reporting as of December 31, 2023.
This
Annual Report does not include an attestation report of our internal controls from our independent registered public accounting firm due
to our status as an emerging growth company under the JOBS Act.
Changes in Internal Control over Financial
Reporting
There were no changes in our
internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most
recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
ITEM 9B. OTHER INFORMATION
Extension
Pursuant to the terms of the
Company’s amended and restated certificate of incorporation and the trust agreement entered into between the Company and Continental
Stock Transfer & Trust Company, if the Company anticipates that it may not be able to consummate its initial business combination
within 12 months from the closing of the initial public offering, it may, by resolution of its board of directors and if requested by
its Sponsor, extend the period of time it will have to consummate an initial business combination up to two times, each by an additional
three months (for a total of up to 18 months from the closing of the initial public offering). The Company must deposit $690,000 into
the trust account for each extension.
On March 28, 2024, the Sponsor
deposited $ 690,000 (the “Extension Payment”) into the Company’s trust account in order to extend the date by which
the Company has to consummate a business combination from March 31, 2024 to June 30, 2024.
The Extension Payment was
loaned as a draw down pursuant to an unsecured promissory note the Company issued to the Sponsor on May 17, 2022, pursuant to the Company
was able borrow up to an aggregate principal amount of $300,000 (the “Note”). On January 20, 2023, the maximum amount available
under the Note was amended and increased to $400,000. As of March 31, 2023, both the Company and the Sponsor mutually agreed to extend
the maturity date of the original Note. The Note is non-interest bearing and payable on the earlier of (i) the close of the Company’s
initial business combination or (ii) September 30, 2024. On March 27, 2024, the maximum amount available under the Note was, again, amended
and increased to $1,090,000.
ITEM 9C. DISCLOSURE REGARDING FOREIGN
JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS
AND CORPORATE GOVERNANCE
The following table sets forth
information about our directors and executive officers.
Name |
|
Age |
|
Position |
Arie Rabinowitz |
|
52 |
|
Director and Chief Executive Officer |
Scott Burell |
|
59 |
|
Chief Financial Officer |
Yosef Eichorn |
|
32 |
|
Chief Development Officer |
Joseph Hammer |
|
45 |
|
Chairman of the Board |
Barak Avitbul |
|
49 |
|
Director |
Olga Castells |
|
50 |
|
Director |
Patrick Donovan |
|
46 |
|
Director |
Arie Rabinowitz - Chief Executive Officer and Director
Mr. Rabinowitz is the co-founder
of LH Financial Services Corp., a family office service company for a single family. The family’s primary securities investment
vehicle is Alpha Capital Anstalt. Mr. Rabinowitz served as Vice President and Chief Investment Officer of LH Financial from inception
in 1997 and until 2010. Since 2010 Mr. Rabinowitz has served as Chief Executive Officer of LH Financial. LH Financial evaluates investment
opportunities in a wide variety of asset classes including public companies, private companies, development stage companies, technology
institutions, startup incubators, and other ventures to determine if they fit within the framework of the family office’s investment
criteria. LH Financial, under the guidance of Mr. Rabinowitz, subsequently facilitates investments and exits from investments approved
by the family. LH Financial also participates and facilitates charitable endeavors for itself and the family in many charitable causes,
including organizations that foster education, family, and health across North America, Israel, and elsewhere. Mr. Rabinowitz advises,
on a pro bono basis, a charity organization in the U.S. and Israel. In addition, Mr. Rabinowitz serves on the board of directors for Areivim,
Inc., a community committed to the well-being of at-risk children, their parents, and siblings. Mr. Rabinowitz is the founder and CEO
of ACR Foundation, a 501(c)3 registered charitable trust focused on both local and international charitable causes. Mr. Rabinowitz is
the father-in-law of Mr. Eichorn. Mr. Rabinowitz graduated from Lander College of Arts & Sciences with a BS in Mathematics.
Scott Burell serves
as our Chief Financial Officer. Since August 2018, Scott Burell has been the Chief Financial Officer of AIVITA Biomedical, Inc., an Irvine
California-based immuno-oncology company focused on the advancement of commercial and clinical-stage programs utilizing curative and regenerative
medicines. From November 2006 until its sale to Invitae Corp. (NYSE: NVTA) in November 2017, Mr. Burell was the Chief Financial Officer,
Secretary and Treasurer of CombiMatrix Corporation (NASDAQ: CBMX), a family health-focused clinical molecular diagnostic laboratory specializing
in pre-implantation genetic screening, prenatal diagnosis, miscarriage analysis, and pediatric developmental disorders. Mr. Burell successfully
led the split-off of CombiMatrix in 2007 from its former parent, has led several successful public and private debt and equity financing
transactions as well as CombiMatrix’s reorganization in 2010. Prior to this, Mr. Burell had served as CombiMatrix’s Vice President
of Finance since 2001 and as its Controller from 2001 to 2006. From 1999 until the time that he first joined CombiMatrix in 2001, Mr.
Burell was the Controller for Network Commerce, Inc. (NASDAQ: SPNW), a publicly traded technology and information infrastructure company
located in Seattle. Prior to this, Mr. Burell spent nine years with Arthur Andersen’s Audit and Business Advisory practice in Seattle.
Mr. Burell is also a member of the Board of Directors of Microbot Medical (NASDAQ: MBOT), an Israeli-based medical device company. Mr.
Burell obtained his Washington state CPA license in 1992 and is a Certified Public Accountant (currently inactive). Mr. Burell holds BS
degrees in Accounting and Business Finance from Central Washington University.
Yosef Eichorn - Chief Development
Officer
Mr. Eichorn currently serves
as the Vice President of Investments at LH Financial Services Corp., a family office service company for a single family. The family’s
primary securities investment vehicle is Alpha Capital Anstalt. Mr. Eichorn has served as Vice President of Investments at LH Financial
since January 2020 where he focuses on evaluating new investment opportunities in addition to monitoring the family’s active portfolio
companies. From March 2019 to September 2021, Mr. Eichorn served as Compliance Officer at LH Financial. He was responsible for compliance,
developing and updating LH Financial’s and its family client’s compliance framework and procedures to ensure that LH and its
family client comply with applicable policies and regulations. From July 2018 to December 2019, Mr. Eichorn served as a Research Analyst
at LH Financial. Mr. Eichorn is the son-in-law of Mr. Rabinowitz. Yosef Eichorn graduated from Empire State College with a BS in Liberal
Arts.
Joseph Hammer - Chairman of The
Board of Directors
Since 2010, Mr. Hammer has
served as the Chief Investing Officer (“CIO”) at LH Financial Services Corp., a family office service company for a single
family. The family’s primary securities investment vehicle is Alpha Capital Anstalt. LH Financial evaluates investment opportunities
in a wide variety of asset classes including public companies, private companies, merger candidates, development stage companies, technology
institutions, startup incubators, and other ventures to determine if they fit within the framework of the family office’s investment
criteria. As the CIO, Mr. Hammer sources potential investments for the family office and provides continued guidance to Alpha for many
of the family’s investments and mergers, and in particular, within the Middle East. In addition, Mr. Hammer originates numerous
charitable endeavors and relationships for LH Financial and the family, including organizations that foster education, family, and health
across North America, Israel, and elsewhere. Mr. Hammer is a Board Member of Gratitude Railroad LLC, a community of investors, operating
an alternative investment platform, who are inspired and dedicated to solving environmental and social problems through the profitable
deployment of financial, intellectual, and human capital. Mr. Hammer is the founder of The JDH Foundation, a 501(c)3 charitable organization
which supports both local and international charitable causes. He is also the Chairman of the Executive Committee of Chai Lifeline, Inc.,
a health support network for children, families and communities impacted by serious illness or loss. He serves as a Board Member of The
Duvdevan Foundation, a support system for soldiers in the elite Duvdevan Unit of the Israeli Defense Forces.
Barak Avitbul is a member
of the Board of Directors. Mr. Avitbul is the Chief Executive Officer of NetNut Ltd., and has been a member of senior management of Safe-T
Group Ltd. (Nasdaq, TASE: SFET), a global provider of cybersecurity and privacy solutions to consumers and enterprises, since the completion
of the acquisition of NetNut in June 2019 by Safe-T Group. NetNut provides business proxy network solutions that enable multiple business
use cases, such as online ad verification, retail price and inventory comparisons, network security penetration, load testing of applications,
and other data mining and analysis. Mr. Avitbul has founded and led several successful internet and software companies among them DiviNetworks
Ltd., where he built global network optimization as a service operation in over fifty countries around the world and was the first Israeli
company to raise investment from the World Bank. Before founding DiViNetworks, Mr. Avitbul founded Key2Peer, a provider of anti-piracy
and promotional services for the P2P market, leading it to a net profit in less than twelve months. Prior to that, Mr. Avitbul served
as a consultant for several premier technology companies in diverse sectors, among them Rosetta Genomics (NASDAQ: ROSG), where he served
as the head of algorithm research. Mr. Avitbul also served as Director of Research and Development at iMDsoft, playing an instrumental
role in creating and launching successful products in the healthcare clinical information management market. Mr. Avitbul holds an L.L.B
in Law and BS in Computer Science, both from Tel Aviv University.
Olga Castells is a member
of the Board of Directors. Ms. Castells is a Tax Senior Director at Oracle Corporation, a position she has held since 2010, where she
is responsible for audit controversy matters in Canada and Latin America, a region with approximately $3b in annual revenue. Ms. Castells
currently manages 100+ audits and tax cases (at various levels of appeal) involving income and non-income based tax in nine countries.
Ms. Castells is also involved in the due diligence process for acquisitions with presence in Canada, Latin America and the Caribbean.
Prior to joining Oracle, Ms. Castells worked for PricewaterhouseCoopers (PwC) for five years and held a variety of positions where she
performed international tax planning for large multi-national clients with operations in Europe, Asia, Latin America and the Caribbean
in a variety of industries, including consumer products, retail, manufacturing, franchise services and power generation. Ms. Castells
completed a Master of Science in Taxation from University of Miami and graduated from University of Miami cum laude with a BS in Accounting.
Ms. Castells is a Certified Public Accountant licensed in Florida.
Patrick Donovan is a
member of the Board of Directors. Mr. Donovan is a founding partner of Lokahi Capital, a private equity firm located in Delray, Florida.
Mr. Donovan brings an international business background, working in Europe and the United States, while serving a global client base.
His career began in commercial real estate finance and evolved with a move to investment banking with Credit Suisse in London in 2005.
He also held positions as a Fixed Income Portfolio Manager at UBS in London and a Structured Credit Trader at AVM/III Capital located
in Florida, US. Mr. Donovan has been a Board of Trustee member of Gulf Stream School since 2018 and currently chairs the Finance Committee.
Mr. Donovan earned a Master of Business Administration from Washington University Olin School of Business and a BS in Finance from University
of Missouri.
Number and Terms of Office of Officers and
Directors
We have five directors. Our
board of directors is divided into three classes with only one class of directors being elected in each year and each class (except for
those directors appointed prior to our first annual meeting of stockholders) serving a three-year term. In accordance with Nasdaq corporate
governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing
on Nasdaq. The term of office of the first class of directors, consisting of Barak Avitbul, and Olga Castells, will expire at our first
annual meeting of stockholders. The term of office of the second class of directors, consisting of Patrick Donovan, and Arie Rabinowitz,
will expire at the second annual meeting of stockholders. The term of office for the third class of directors consisting of Joseph Hammer,
will expire at the third annual meeting of stockholders.
Our officers are appointed
by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our board of
directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our
officers may consist of a Chairman of the Board, a Chief Executive Officer, Chief Financial Officer, President, Vice Presidents, Secretary,
Treasurer, Assistant Secretaries and such other offices as may be determined by the board of directors.
Director Independence
Nasdaq requires that a majority
of our board must be composed of “independent directors,” which is defined generally as a person other than an officer or
employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s
board of directors would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of
a director.
Barak Avitbul, Olga Castells,
and Patrick Donovan are our independent directors.
Our independent directors
will have regularly scheduled meetings at which only independent directors are present.
We will only enter into transactions
with our officers and directors and their respective affiliates that are on terms no less favorable to us than could be obtained from
independent parties. Any related-party transactions must be approved by our audit committee and a majority of disinterested directors..
Committees of the Board of Directors
Our board of directors has
two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, Nasdaq rules
and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors,
and Nasdaq rules require that the compensation committee of a listed company be comprised solely of independent directors.
Audit Committee
Our Audit Committee has been
established in accordance with Section 3(a)(58)(A) of the Exchange Act and consists of Barak Avitbul, Olga Castells, and Patrick Donovan,
each of whom is an independent director under the Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act. Mr. Donovan
chairs the Audit Committee.
The Audit Committee’s
duties, which are specified in our Audit Committee Charter, include, but are not limited to:
| ● | the appointment, compensation, retention, replacement, and
oversight of the work of the independent registered public accounting firm engaged by us; |
| ● | pre-approving all audit and permitted non-audit services to
be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; |
| ● | setting clear hiring policies for employees or former employees
of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations; |
| ● | setting clear policies for audit partner rotation in compliance
with applicable laws and regulations; |
| ● | obtaining and reviewing a report, at least annually, from
the independent registered public accounting firm describing (i) the independent registered public accounting firm’s internal quality-control
procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or
by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent
audits carried out by the firm and any steps taken to deal with such issues and (iii) all relationships between the independent registered
public accounting firm and us to assess the independent registered public accounting firm’s independence; |
| ● | reviewing and approving any related party transaction required
to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
| ● | reviewing with management, the independent registered public
accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with
regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial
statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting
Standards Board, the SEC or other regulatory authorities. |
Financial Experts on Audit Committee
Pursuant to Nasdaq rules,
the audit committee will at all times be composed exclusively of “independent directors” who are able to read and understand
fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement.
Each member of the audit committee
is financially literate and our board of directors has determined that Patrick Donovan, qualifies as an “audit committee financial
expert,” as defined under rules and regulations of the SEC, which generally is any person who has past employment experience in
finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in
the individual’s financial sophistication.
Director nominations
We do not have a standing
nominating committee, though we intend to form a corporate governance and nominating committee as and when required to do so by law or
NASDAQ rules. In accordance with Rule 5605(e)(2) of the NASDAQ rules, a majority of the independent directors may recommend a director
nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily carry
out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee.
Barak Avitbul, Olga Castells, and Patrick Donovan will participate in the consideration and recommendation of director nominees. In accordance
with Rule 5605(e)(1)(A) of the NASDAQ rules, all such directors are independent. As there is no standing nominating committee, we do not
have a nominating committee charter in place.
The board of directors will
also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees
to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders). Our stockholders
that wish to nominate a director for election to the Board should follow the procedures set forth in our bylaws.
We have not formally established
any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying
and evaluating nominees for director, the board of directors considers educational background, diversity of professional experience, knowledge
of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders
Compensation Committee
Our Compensation Committee
consists of Barak Avitbul, Olga Castells, and Patrick Donovan each of whom is an independent director under the Nasdaq listing standards.
Barak Avitbul is the Chairperson of the compensation committee. The compensation committee’s duties, which are specified in our
Compensation Committee Charter, include, but are not limited to:
| ● | reviewing and approving on an annual basis the corporate goals
and objectives relevant to our executive officers’ compensation, if any is paid by us, evaluating our executive officers’
performance in light of such goals and objectives and determining and approving the remuneration (if any) of our executive officers based
on such evaluation; |
| ● | reviewing and approving on an annual basis the compensation,
if any is paid by us, of all of our other officers; |
| ● | reviewing on an annual basis our executive compensation policies
and plans; |
| ● | implementing and administering our incentive compensation
equity-based remuneration plans; |
| ● | assisting management in complying with our proxy statement
and annual report disclosure requirements; |
| ● | approving all special perquisites, special cash payments and
other special compensation and benefit arrangements for our officers and employees; |
| ● | if required, producing a report on executive compensation
to be included in our annual proxy statement; and |
| ● | reviewing, evaluating and recommending changes, if appropriate,
to the remuneration for directors. |
Notwithstanding the foregoing,
as indicated above, no compensation of any kind, including finders, consulting or other similar fees, will be paid to any of our existing
stockholders, including our directors, or any of their respective affiliates, prior to, or for any services they render in order to effectuate,
the consummation of a business combination. Accordingly, it is likely that prior to the consummation of an initial business combination,
the compensation committee will only be responsible for the review and recommendation of any compensation arrangements to be entered into
in connection with such initial business combination.
Code of Ethics
We adopted a code of conduct
and ethics applicable to our directors, officers and employees in accordance with applicable federal securities laws. The code of ethics
codifies the business and ethical principles that govern all aspects of our business. You may review our Code of Ethics by accessing our
public filings at the SEC’s web site at www.sec.gov. In addition, a copy of our Code of Ethics will be provided without charge upon
request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on
Form 8-K.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, requires our executive officers, directors and persons who beneficially own more
than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of ownership
and reports of changes in ownership of our shares of common stock and other equity securities. These executive officers, directors, and
greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms filed by such reporting
persons.
Based solely on our review
of such forms furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable
to our executive officers, directors and greater than 10% beneficial owners were filed in a timely manner.
ITEM 11. EXECUTIVE COMPENSATION
Executive Officers and Director Compensation
None of our officers has received
any cash compensation for services rendered to us. Other than as set forth in the prospectus, no compensation of any kind, including any
finder’s fee, reimbursement, consulting fee or monies in respect of any payment of a loan, will be paid by us to our sponsor, officers,
directors or any affiliate of our sponsor, officers or directors, prior to, or in connection with any services rendered in order to effectuate,
the consummation of our initial business combination (regardless of the type of transaction that it is). Our officers and directors will
be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target
businesses and performing due diligence on suitable business combinations. Our audit committee will review on a quarterly basis all payments
that were made to our sponsor, officers, directors, or our or their affiliates. Any such payments prior to an initial business combination
will be made using funds held outside the trust account. We do not expect to have any additional controls in place governing our reimbursement
payments to our directors and executive officers for their out-of-pocket expenses incurred in connection with identifying and consummating
an initial business combination.
After the completion of our
initial business combination, directors or members of our management team who remain with us may be paid consulting or management fees
from the combined company. All of these fees will be fully disclosed to stockholders, to the extent then known, in the tender offer materials
or proxy solicitation materials furnished to our stockholders in connection with a proposed initial business combination. We have not
established any limit on the amount of such fees that may be paid by the combined company to our directors or members of management. It
is unlikely the amount of such compensation will be known at the time of the proposed initial business combination because the directors
of the post-combination business will be responsible for determining officer and director compensation. Any compensation to be paid to
our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted
solely by independent directors or by a majority of the independent directors on our board of directors.
We do not intend to take any
action to ensure that members of our management team maintain their positions with us after the consummation of our initial business combination,
although it is possible that some or all of our officers and directors may negotiate employment or consulting arrangements to remain with
us after our initial business combination. The existence or terms of any such employment or consulting arrangements to retain their positions
with us may influence our management’s motivation in identifying or selecting a target business but we do not believe that the ability
of our management to remain with us after the consummation of our initial business combination will be a determining factor in our decision
to proceed with any potential business combination. We are not party to any agreements with our officers and directors that provide for
benefits upon termination of employment.
Compensation Committee Interlocks and Insider
Participation
None of our officers currently
serves, or in the past year has served, as a member of the compensation committee of any entity that has one or more officers serving
on our board of directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information, as of March 29,
2024, with respect to the beneficial ownership of our voting securities by (i) each person who is known by us to be the beneficial owner
of more than 5% of our issued and outstanding Common Stock, (ii) each of our officers and directors, and (iii) all of our officers and
directors as a group. The following table does not reflect record of beneficial ownership of any shares of common stock issuable upon
conversion of the rights or exercise of the warrants, as the rights and warrants are not exercisable within 60 days.
| |
Number of | | |
Percentage | |
| |
Shares | | |
of | |
| |
Beneficially | | |
Outstanding | |
Name and Address of Beneficial Owner | |
Owned | | |
Shares | |
Trailblazer Sponsor Group, LLC (1) | |
| 2,119,500 | | |
| 23.5 | % |
Arie Rabinowitz | |
| * | | |
| * | |
Scott Burell | |
| * | | |
| * | |
Yosef Eichorn | |
| * | | |
| * | |
Joseph Hammer | |
| 2,119,500 | | |
| * | |
Barak Avitbul | |
| * | | |
| * | |
Olga Castells | |
| * | | |
| * | |
Patrick Donovan | |
| * | | |
| * | |
All officers and directors as a group | |
| * | | |
| * | |
(7 individuals) | |
| * | | |
| 23.5 | % |
Other 5% Holders |
|
| | |
| |
AQR Capital Management, LLC (2) |
|
| 588,763 | | |
| 6.53 | % |
Wealthspring Capital LLC (3) |
|
| 667,773 | | |
| 7.4 | % |
Kerry Proper/Antonio Ruiz-Gimenez (4) |
|
| 601,418 | | |
| 6.67 | % |
(1) | Trailblazer Sponsor Group, LLC, the Sponsor, is the record
holder of the shares reported herein. Joseph Hammer, our Chairman, is a manager of the Sponsor. Consequently, he may be deemed the beneficial
owner of the shares held by our sponsor and has voting and dispositive control over such securities. Each of the Company’s officers
and directors disclaims beneficial ownership of any shares other than to the extent he or she may have a pecuniary interest therein,
directly or indirectly. The business address of each of these entities and individuals is at 510 Madison Avenue, Suite 1401, New York,
NY 10022. |
(2) | According to a Schedule 13G filed on February 14, 2024, AQR
Capital Management, LLC, AQR Capital Management Holdings, LLC and AQR Arbitrage, LLC share beneficial ownership of 588,763 shares of
Class A common stock. The business address for the reporting persons is One Greenwich Plaza, Greenwich, CT 06830. |
(3) | According to a Schedule 13G filed on February 8, 2024, Wealthspring
Capital LLC and Matthew Simpson share beneficial ownership of 667,773 shares of Class A common stock. The business address for the reporting
persons is 2 Westchester Park Drive, Suite 108, West Harrison, NY 10604. |
(4) | According to a Schedule 13G filed on June 12, 2023, Kerry
Proper and Antonio Ruiz-Gimenez share beneficial ownership of 601,418 shares of Class A common stock. The business address for the reporting
persons is 17 State Street, Suite 2130, New York, NY 10004.. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Founder Shares
On May 17, 2022, the
Sponsor purchased 1,940,625 founder shares for an aggregate purchase price of $25,000, or approximately $0.01per share (up to 253,125
shares of which were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised).
Subsequently, on September 23, 2022, the Company and the Sponsor entered into an exchange agreement pursuant to which the Sponsor exchanged
1,940,624 shares of Class B common stock for 1,940,624 shares of Class A common stock (the “Share Exchange”). Following the
Share Exchange, the founder shares consisted of 1,940,624 shares of Class A common stock and 1 share of Class B common stock. Subsequently,
on January 20, 2023, the Sponsor forfeited for no consideration and the Company canceled 215,625 of such founder shares, resulting
in 1,724,999 founder shares remaining outstanding of Class A common stock and 1 share of Class B common stock.
The Sponsor has agreed, subject
to certain limited exceptions, not to transfer, assign or sell any of the founder shares until the earlier to occur of: (1) one year
after the completion of a business combination or (B) subsequent to a business combination, (x) if the last reported sale price
of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 180 days after a business combination,
or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results
in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Private Placement
Simultaneously with the closing
of the Initial Public Offering, the Sponsor purchased an aggregate of 394,500 Placement Units at a price of $10.00 per Placement Unit,
for an aggregate purchase price of $3,945,000 in a private placement. A portion of the proceeds from the Placement Units was added to
the proceeds from the Initial Public Offering held in the Trust Account so that the Trust Account holds $10.20 per unit sold. If we do
not complete a Business Combination within the Combination Period, the proceeds from the sale of the Placement Units will be used to fund
the redemption of the Public Shares (subject to the requirements of applicable law) and the Placement Units will expire worthless.
Promissory Notes
On May 17, 2022, we issued
an unsecured promissory note to the Sponsor pursuant to which we may borrow up to an aggregate principal amount of $300,000. On January
20, 2023, the maximum amount available under the Note was further increased to $400,000. As of March 31, 2023, both we and the Sponsor
have mutually agreed to extend the maturity date of the original Note. The Note is non-interest bearing and payable on the earlier of
(i) the close of the Company’s initial business combination or (ii) September 30, 2024. On November 21, 2023, the Note was further
amended to permit us to pay certain expenses of the Sponsor which would reduce the principal balance of the Note by the same amount. As
of December 31, 2023 and 2022, there was $321,585 and $225,000, respectively, outstanding under the Note.
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, the terms
of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working
Capital Loans would either be repaid upon consummation of a business combination, without interest, or, at the lender’s discretion,
up to $1,500,000 of such Working Capital Loans may be convertible into units of the post-business combination entity at a price of $10.00
per unit. The units would be identical to the Private Units. As of December 31, 2023 and 2022, there was no amount outstanding under the
Working Capital Loan.
General
Our sponsor, officers and
directors, or any of their respective affiliates, are entitled to be reimbursed for certain bona-fide, documented out-of-pocket expenses
incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable
business combinations. Our audit committee will review on a quarterly basis all payments that were made to our sponsor, officers, directors
or our or their affiliates and will determine which expenses and the amount of expenses that will be reimbursed. There is no cap or ceiling
on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.
All ongoing and future transactions
between us and any of our officers and directors or their respective affiliates will be on terms believed by us to be no less favorable
to us than are available from unaffiliated third parties. Such transactions will require prior approval by our audit committee and a majority
of our uninterested “independent” directors, or the members of our board who do not have an interest in the transaction, in
either case who had access, at our expense, to our attorneys or independent legal counsel. We will not enter into any such transaction
unless our audit committee and a majority of our disinterested “independent” directors determine that the terms of such transaction
are no less favorable to us than those that would be available to us with respect to such a transaction from unaffiliated third parties.
Related Party Policy
Our Code of Ethics requires
us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except
under guidelines approved by the board of directors (or the audit committee). Related party transactions are defined as transactions in
which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries
is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner
of our shares of common stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct
or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity).
A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her
work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives improper
personal benefits as a result of his or her position
We also require each of our
directors and executive officers to annually complete a directors’ and officers’ questionnaire that elicits information about
related party transactions.
These procedures are intended
to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the
part of a director, employee or officer.
To further minimize conflicts
of interest, we have agreed not to consummate our initial business combination with an entity that is affiliated with any of our insiders,
officers or directors unless we have obtained an opinion from an independent investment banking firm and the approval of a majority of
our disinterested and independent directors (if we have any at that time) that the business combination is fair to our unaffiliated stockholders
from a financial point of view. In no event will our insiders, or any of the members of our management team be paid any finder’s
fee, consulting fee or other similar compensation prior to, or for any services they render in order to effectuate, the consummation of
our initial business combination (regardless of the type of transaction that it is).
Director Independence
Nasdaq listing standards require
that a majority of our board of directors be independent. For a description of the director independence, see “- Part III, Item
10 - Directors, Executive Officers and Corporate Governance”.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND
SERVICES.
The engagement of Marcum LLP
was approved by the Audit Committee of the Company’s Board of Directors. During the period from November 12, 2021 (inception) through
December 31, 2023, Marcum has acted as our principal independent registered public accounting firm. The following is a summary of fees
paid or to be paid to both firms for services rendered.
| (1) | Audit
Fees. Audit fees consist of fees billed for professional services rendered
by our independent registered public accounting firm for the audit of our annual financial statements and review of financial statements
included in our Quarterly Reports on Form 10-Q or services that are normally provided by our independent registered public accounting
firm in connection with statutory and regulatory filings or engagements. The aggregate fees billed by Marcum for Audit Fees for the years
ended December 31, 2023 and 2022 totaled $228,145 and $146,775, respectively. |
| (2) | Audit-Related Fees. Audit-related
fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our
financial statements and are not reported under “Audit Fees.” These services include attest services that are not required
by statute or regulation and consultation concerning financial accounting and reporting standards. We did not pay Marcum any Audit-Related Fees for the years ended December 31, 2023 and 2022. |
| (3) | Tax Fees. Tax fees consist
of fees billed for professional services rendered by our independent registered public accounting firm for tax compliance, tax advice,
and tax planning. We did not pay Marcum any Tax Fees for the years ended December 31, 2023 and 2022. |
| (4) | All Other Fees. All other
fees consist of fees billed for all other services. We did not pay Marcum any Other Fees for the years ended December 31, 2023 and 2022. |
Policy on Board Pre-Approval of Audit and Permissible
Non-Audit Services of the Independent Auditors
The audit committee is responsible
for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this
responsibility, the audit committee shall review and, in its sole discretion, pre-approve all audit and permitted non-audit services to
be provided by our independent registered public accounting firm as provided under the audit committee charter.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL
STATEMENT SCHEDULES
(a) | The following documents are
filed as part of this Form 10-K: |
Exhibit
No. |
|
Description |
1.1 |
|
Underwriting Agreement, dated March 28, 2023,
by and among the Company, LifeSci and Ladenburg; (incorporated by reference to Exhibit 1.1 filed with the Form 8-K filed by the Registrant
on April 3, 2023). |
2.1 |
|
Second Amendment to Promissory Note dated as of
March 31, 2023 (incorporated by reference to Exhibit 2.1 filed with the Form 8-K filed by the Registrant on April 28, 2023). |
3.1 |
|
Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 filed with the Form S-1/A filed by the Registrant on January 31, 2023). |
3.2 |
|
Certificate of Amendment (incorporated by reference
to Exhibit 3.2 filed with the Form S-1/A filed by the Registrant on January 31, 2023). |
3.3 |
|
Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 filed with the Form 8-K filed by the Registrant on April 3, 2023). |
3.4 |
|
By Laws (incorporated by reference to Exhibit
3.4 filed with the Form S-1/A filed by the Registrant on January 31, 2023). |
4.1 |
|
Specimen Unit Certificate (incorporated by reference
to Exhibit 4.1 filed with the Form S-1/A filed by the Registrant on January 31, 2023). |
4.2 |
|
Specimen Class A Common Stock Certificate (incorporated
by reference to Exhibit 4.2 filed with the Form S-1/A filed by the Registrant on January 31, 2023). |
4.3 |
|
Specimen Right Certificate (incorporated by reference
to Exhibit 4.3 filed with the Form S-1/A filed by the Registrant on January 31, 2023). |
4.4 |
|
Rights Agreement, dated March 28, 2023, by and
between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 filed with the Form
8K filed by the Registrant on April 3, 2023). |
4.5* |
|
Description of Securities |
10.1 |
|
Letter Agreements, dated March 28, 2023, by and
between the Company and each of the Company’s officers, directors and initial stockholders (incorporated by reference to Exhibit
10.1 filed with the Form 8-K filed by the Registrant on April 3, 2023). |
10.2 |
|
Investment Management Trust Agreement, dated March
28, 2023 by and between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 10.2
filed with the Form 8-K filed by the Registrant on April 3, 2023). |
10.3 |
|
Registration Rights Agreement, dated March 28,
2023, by and among the Company and the initial stockholders of the Company (incorporated by reference to Exhibit 10.3 filed with
the Form 8-K filed by the Registrant on April 3, 2023). |
10.4 |
|
Indemnity Agreements, dated March 28, 2023, by
and between the Company and each of the directors and officers of the Company (incorporated by reference to Exhibit 10.4 filed with
the Form 8-K filed by the Registrant on April 3, 2023). |
10.5 |
|
Stock
Escrow Agreement, dated March 28, 2023, by and among the Company, Continental Stock Transfer & Trust Company and
the initial stockholders of the Company (incorporated by reference to Exhibit 10.5 filed with the Form 8-K filed by the Registrant
on April 3, 2023). |
10.6 |
|
Private Placement
Units Purchase Agreement, dated March 28, 2023, by and between the Company and Trailblazer Sponsor Group, LLC (incorporated
by reference to Exhibit 10.6 filed with the Form 8-K filed by the Registrant on April 3, 2023). |
10.7 |
|
Promissory
Note, dated May 17, 2022, issued to Trailblazer Sponsor Group, LLC (incorporated by reference to Exhibit 10.2 filed with the Form
S-1/A filed by the Registrant on January 31, 2023). |
10.8 |
|
Amendment
to Promissory Note, dated January 20, 2023 issued to Trailblazer Sponsor Group, LLC (incorporated by reference to Exhibit 10.3 filed
with the Form S-1/A filed by the Registrant on January 31, 2023). |
10.9 |
|
Securities
Subscription Agreement, dated May 17, 2022, between the registrant and Trailblazer Sponsor Group, LLC (incorporated by reference
to Exhibit 10.6 filed with the Form S-1/A filed by the Registrant on January 31, 2023). |
10.10 |
|
Exchange
Agreement, dated September 23, 2022, between the registrant and Trailblazer Sponsor Group, LLC (incorporated by reference to Exhibit
10.10 filed with the Form S-1/A filed by the Registrant on January 31, 2023). |
10.11 |
|
Sponsor
Shares Forfeiture Agreement, dated January 20, 2023, between the registrant and Trailblazer Sponsor Group, LLC (incorporated by reference
to Exhibit 10.11 filed with the Form S-1/A filed by the Registrant on January 31, 2023). |
10.12 |
|
Advisory
Agreement, dated September 23, 2022, between the Trailblazer Sponsor Group, LLC on behalf of the registrant and LifeSci Capital (incorporated
by reference to Exhibit 10.12 filed with the Form S-1/A filed by the Registrant on March 13, 2023). |
10.13 |
|
Amendment
No. 1 to the Advisory Agreement, dated March 9, 2023, between the Trailblazer Sponsor Group, LLC on behalf of the registrant and
LifeSci Capital (incorporated by reference to Exhibit 10.13 filed with the Form S-1/A filed by the Registrant on March 13, 2023). |
10.14* |
|
Amendment
to Promissory Note, dated March 27, 2024, issued to Trailblazer Sponsor Group, LLC |
14 |
|
Form
of Code of Ethics (incorporated by reference to Exhibit 14 filed with the Form S-1/A filed by the Registrant on January 31, 2023). |
99.1 |
|
Form
of Audit Committee Charter (incorporated by reference to Exhibit 99.1 filed with the Form S-1/A filed by the Registrant on January
31, 2023). |
99.2 |
|
Form
of Compensation Committee Charter (incorporated by reference to Exhibit 99.2 filed with the Form S-1/A filed by the Registrant on
January 31, 2023). |
21.1* |
|
List
of Subsidiaries. |
31.1* |
|
Certification
of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
|
Certification
of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* |
|
Certification
of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002. |
97.1* |
|
Clawback
Policy |
101.INS* |
|
Inline
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within
the Inline XBRL document. |
101.SCH* |
|
Inline
XBRL Taxonomy Extension Schema Document. |
101.CAL* |
|
Inline
XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF* |
|
Inline
XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB* |
|
Inline
XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE* |
|
Inline
XBRL Taxonomy Extension Presentation Linkbase Document. |
104* |
|
Cover
Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags
are embedded within the Inline XBRL document. |
ITEM 16. FORM 10-K SUMMARY
Not applicable.
SIGNATURES
Pursuant to the requirements
of Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
TRAILBLAZER MERGER CORPORATION I |
Dated: March 29, 2024 |
|
|
|
|
By: |
/s/ Arie Rabinowitz |
|
Name: |
Arie Rabinowitz |
|
Title: |
Chief Executive Officer and Director |
Pursuant to the requirements
of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Arie Rabinowitz |
|
Chief
Executive Officer and Director |
|
March 29, 2024 |
Arie
Rabinowitz |
|
(Principal
Executive Officer) |
|
|
|
|
|
|
|
/s/
Scott Burell |
|
Chief
Financial Officer |
|
March 29, 2024 |
Scott
Burell |
|
(Principal
Accounting and Financial Officer) |
|
|
|
|
|
|
|
/s/
Yosef Eichorn |
|
Chief
Development Officer |
|
March 29, 2024 |
Yosef Eichorn |
|
|
|
|
|
|
|
|
|
/s/
Joseph Hammer |
|
Chairman |
|
March 29, 2024 |
Joseph Hammer |
|
|
|
|
|
|
|
|
|
/s/
Barak Avitbul |
|
Director |
|
March 29, 2024 |
Barak Avitbul |
|
|
|
|
|
|
|
|
|
/s/
Olga Castells |
|
Director |
|
March 29, 2024 |
Olga Castells |
|
|
|
|
|
|
|
|
|
/s/
Patrick Donovan |
|
Director |
|
March 29, 2024 |
Patrick Donovan |
|
|
|
|
TRAILBLAZER MERGER CORPORATION
I
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of
Trailblazer Merger Corporation I
Opinion on the Financial Statements
We have audited the accompanying balance
sheets of Trailblazer Merger Corporation I (the “Company”) as of December 31, 2023 and 2022, the related statements of operations,
changes in stockholders’ (deficit) equity and cash flows for the years ended December 31, 2023 and 2022, and the related notes (collectively
referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years
ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company is a Special
Purpose Acquisition Corporation that was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock
purchase, reorganization or similar business combination with one or more businesses or entities on or before June 30, 2024, or by resolution
of its Board of Directors and if requested by the Sponsor, to extend the business combination deadline by an additional three months through
September 30, 2024. There is no assurance that the Company will obtain the necessary approvals or raise the additional capital it needs
to fund its business operations and complete any business combination prior to June 30, 2024, if at all. The Company also has no approved
plan in place to extend the business combination deadline beyond June 30, 2024 and lacks the capital resources needed to fund operations
and complete any business combination, even if the deadline to complete a business combination is extended to a later date. These matters
raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regard to these
matters are also described in Note 1. The financial statements do not include any adjustments that may be necessary should the Company
be unable to continue as a going concern.
Basis for Opinion
These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on
our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance
with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were
we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal
control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Marcum LLP
Marcum LLP
We have served as the Company’s
auditor since 2022.
New York, NY
March 29, 2024
TRAILBLAZER MERGER CORPORATION I
BALANCE SHEETS
| |
December 31, | |
| |
2023 | | |
2022 | |
| |
| | |
| |
ASSETS | |
| | |
| |
Current assets | |
| | |
| |
Cash | |
$ | 607,816 | | |
$ | 34,393 | |
Prepaid expenses | |
| 141,937 | | |
| 2,083 | |
Total current assets | |
| 749,753 | | |
| 36,476 | |
| |
| | | |
| | |
Prepaid insurance | |
| 25,681 | | |
| — | |
Deferred offering costs | |
| — | | |
| 265,377 | |
Cash and marketable securities in Trust Account | |
| 72,994,863 | | |
| — | |
TOTAL ASSETS | |
$ | 73,770,297 | | |
$ | 301,853 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable and accrued expenses | |
$ | 238,834 | | |
$ | 1,290 | |
Accrued offering costs | |
| 75,000 | | |
| 55,750 | |
Income taxes payable | |
| 306,834 | | |
| — | |
Promissory note related party | |
| 321,585 | | |
| 225,000 | |
Total current liabilities | |
| 942,253 | | |
| 282,040 | |
Deferred tax liability | |
| 210,152 | | |
| — | |
Deferred underwriting fee payable | |
| 2,070,000 | | |
| — | |
TOTAL LIABILITIES | |
| 3,222,405 | | |
| 282,040 | |
| |
| | | |
| | |
COMMITMENTS AND CONTINGENCIES (Note 6) | |
| | | |
| | |
Class A common stock subject to possible redemption, 6,900,000 shares at redemption value at $10.47 per share as of December 31, 2023 and none at December 31, 2022 | |
| 72,224,950 | | |
| — | |
| |
| | | |
| | |
STOCKHOLDERS’ (DEFICIT) EQUITY | |
| | | |
| | |
Preferred Stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | |
| — | | |
| — | |
Class A common stock, $0.0001 par value; 100,000,000 shares authorized: 2,119,499 and 1,724,999 issued and outstanding (excluding 6,900,000 and 0 shares subject to possible redemption) at December 31, 2023 and 2022, respectively(1)(2) | |
| 212 | | |
| 172 | |
Class B common stock, $0.0001 par value; 5,000,000 shares authorized; 1 share issued and outstanding at December 31, 2023 and 2022 | |
| — | | |
| — | |
Additional paid-in capital | |
| — | | |
| 24,828 | |
Accumulated deficit | |
| (1,677,270 | ) | |
| (5,187 | ) |
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY | |
| (1,677,058 | ) | |
| 19,813 | |
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | |
$ | 73,770,297 | | |
$ | 301,853 | |
The accompanying notes are an integral
part of these financial statements.
TRAILBLAZER MERGER CORPORATION I
STATEMENTS OF OPERATIONS
| |
For the Years Ended December 31, | |
| |
2023 | | |
2022 | |
Operating and formation costs | |
$ | 543,536 | | |
$ | 4,020 | |
Loss from operations | |
| (543,536 | ) | |
| (4,020 | ) |
| |
| | | |
| | |
Other income (expense): | |
| | | |
| | |
Stock-based compensation expense | |
| (207,087 | ) | |
| — | |
Interest earned on marketable securities held in Trust Account | |
| 2,606,031 | | |
| — | |
Unrealized gain on marketable securities held in Trust Account | |
| 8,832 | | |
| — | |
Other income, net | |
| 2,407,776 | | |
| — | |
| |
| | | |
| | |
Income (loss) before provision for income taxes | |
| 1,864,240 | | |
| (4,020 | ) |
Provision for income taxes | |
| (516,986 | ) | |
| — | |
Net income (loss) | |
$ | 1,347,254 | | |
$ | (4,020 | ) |
| |
| | | |
| | |
Basic weighted average shares outstanding, Class A common stock (2) | |
| 7,165,376 | | |
| 406,849 | |
| |
| | | |
| | |
Basic net income (loss) per share, Class A common stock | |
$ | 0.19 | | |
$ | (0.00 | ) |
| |
| | | |
| | |
Diluted weighted average shares outstanding, Class A common stock (2) | |
| 7,220,855 | | |
| 406,849 | |
| |
| | | |
| | |
Diluted net income (loss) per share, Class A common stock | |
$ | 0.19 | | |
$ | (0.00 | ) |
| |
| | | |
| | |
Basic and diluted weighted average shares outstanding, Class B common stock (1) | |
| 1 | | |
| 530,137 | |
| |
| | | |
| | |
Basic and diluted net income (loss) per share, Class B common stock | |
$ | — | | |
$ | (0.00 | ) |
The accompanying notes are an integral
part of these financial statements.
TRAILBLAZER MERGER CORPORATION I
STATEMENTS OF CHANGES IN STOCKHOLDERS’
(DEFICIT) EQUITY
FOR THE YEARS ENDED DECEMBER 31,
2023 AND 2022
| |
Class A Common Stock | | |
Class B Common Stock | | |
Additional Paid-in | | |
Accumulated | | |
Total Stockholders’
(Deficit) | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Equity | |
Balances — December 31, 2021 | |
| — | | |
$ | — | | |
| — | | |
$ | — | | |
$ | — | | |
$ | (1,167 | ) | |
$ | (1,167 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Issuance of common stock to Sponsor | |
| 1,724,999 | | |
| 172 | | |
| 1 | | |
| — | | |
| 24,828 | | |
| — | | |
| 25,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net loss | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (4,020 | ) | |
| (4,020 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balances — December 31, 2022 | |
| 1,724,999 | | |
| 172 | | |
| 1 | | |
| — | | |
| 24,828 | | |
| (5,187 | ) | |
| 19,813 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Sale of 394,500 private placement units | |
| 394,500 | | |
| 40 | | |
| — | | |
| — | | |
| 3,944,960 | | |
| — | | |
| 3,945,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Stock-based compensation expense to certain officers/directors | |
| — | | |
| — | | |
| — | | |
| — | | |
| 207,087 | | |
| — | | |
| 207,087 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Fair value of rights included in public units | |
| — | | |
| — | | |
| — | | |
| — | | |
| 745,200 | | |
| — | | |
| 745,200 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Allocated value of transaction costs to Class A shares | |
| — | | |
| — | | |
| — | | |
| — | | |
| (89,233 | ) | |
| — | | |
| (89,233 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Remeasurement of carrying value to redemption value | |
| — | | |
| — | | |
| — | | |
| — | | |
| (4,832,842 | ) | |
| (3,019,337 | ) | |
| (7,852,179 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net income | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,347,254 | | |
| 1,347,254 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balances — December 31, 2023 | |
| 2,119,499 | | |
$ | 212 | | |
| 1 | | |
$ | — | | |
$ | — | | |
$ | (1,677,270 | ) | |
$ | (1,677,058 | ) |
The accompanying notes are an integral
part of these financial statements.
TRAILBLAZER MERGER CORPORATION I
STATEMENTS OF CASH FLOWS
| |
For the Year Ended December 31, | |
| |
2023 | | |
2022 | |
Cash Flows from Operating Activities: | |
| | |
| |
Net income (loss) | |
$ | 1,347,254 | | |
$ | (4,020 | ) |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |
| | | |
| | |
Stock-based compensation expense | |
| 207,087 | | |
| — | |
Interest earned on marketable securities held in Trust Account | |
| (2,606,031 | ) | |
| — | |
Unrealized gain on marketable securities held in Trust Account | |
| (8,832 | ) | |
| — | |
Deferred tax provision from income taxes | |
| 210,152 | | |
| — | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| (139,854 | ) | |
| 22,917 | |
Prepaid insurance | |
| (25,681 | ) | |
| — | |
Accounts payable and accrued expenses | |
| 237,544 | | |
| 123 | |
Income taxes payable | |
| 306,834 | | |
| — | |
Net cash (used in) provided by operating activities | |
| (471,527 | ) | |
| 19,020 | |
| |
| | | |
| | |
Cash Flows from Investing Activities: | |
| | | |
| | |
Investment of cash into Trust Account | |
| (70,380,000 | ) | |
| — | |
Net cash used in investing activities | |
| (70,380,000 | ) | |
| — | |
| |
| | | |
| | |
Cash Flows from Financing Activities: | |
| | | |
| | |
Proceeds from sale of units, net of underwriting discounts paid | |
| 67,965,000 | | |
| — | |
Proceeds from sale of private placement units | |
| 3,945,000 | | |
| — | |
Advances from related party | |
| — | | |
| 100,000 | |
Proceeds from promissory note – related party | |
| 100,085 | | |
| 100,000 | |
Repayment of promissory note – related party | |
| (3,500 | ) | |
| — | |
Payment of offering costs | |
| (581,635 | ) | |
| (209,627 | ) |
Net cash provided by (used in) financing activities | |
| 71,424,950 | | |
| (9,627 | ) |
| |
| | | |
| | |
Net Change in Cash | |
| 573,423 | | |
| 9,393 | |
Cash – Beginning of period | |
| 34,393 | | |
| 25,000 | |
Cash – End of period | |
$ | 607,816 | | |
$ | 34,393 | |
| |
| | | |
| | |
Non-Cash investing and financing activities: | |
| | | |
| | |
Offering costs included in accrued offering costs | |
$ | 75,000 | | |
$ | 55,750 | |
Issuance of founder shares through reclassification of advance from related party | |
$ | — | | |
$ | 25,000 | |
Accretion of Class A common stock to redemption value | |
$ | 7,852,179 | | |
$ | — | |
Deferred underwriting fee payable | |
$ | 2,070,000 | | |
$ | — | |
The accompanying notes are an integral
part of these financial statements.
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS
OPERATIONS
Trailblazer Merger Corporation I (the “Company”)
is a blank check company incorporated in Delaware on November 12, 2021. The Company was formed for the purpose of effectuating a
merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more
businesses (the “Business Combination”).
The Company is not limited to a particular industry or geographic location
for purposes of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such, the Company
is subject to all of the risks associated with early stage and emerging growth companies. While the Company may pursue an initial business
combination target in any business or industry, the Company intends to focus the search for a target business on companies operating in
the technology industry.
As of December 31, 2023, the Company had not
yet commenced any operations. All activity for the period November 12, 2021 (inception) through December 31, 2023 relates to the
Company’s formation and the initial public offering (the “Initial Public Offering”), which is described below. The
Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will
generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company
has selected December 31 as its fiscal year end.
The registration statement for the Company’s
Initial Public Offering was declared effective on March 28, 2023. On March 31, 2023, the Company consummated the Initial Public
Offering of 6,900,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units
being offered, the “Public Shares”), which includes the full exercise by the underwriters of their over-allotment option
in the amount of 900,000 Units, at $10.00 per Unit, generating gross proceeds of $69,000,000 which is described in Note 3.
Simultaneously with the closing of the Initial
Public Offering, the Company consummated the sale of 394,500 units (the “Placement Units”) at a price of $10.00 per Placement
Unit, in a private placement to Trailblazer Sponsor Group, LLC (the “Sponsor”), generating gross proceeds of $3,945,000,
which is described in Note 4.
Transaction costs amounted to $3,971,262 consisting
of $1,035,000 of cash underwriting discount, $2,070,000 of deferred underwriting fees, and $866,262 of other offering costs. The allocated
value of transaction costs to Class A common stock amounted to $89,233.
Following the closing of the Initial Public Offering
on March 31, 2023, an amount of $70,380,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the Initial Public
Offering and the sale of the Placement Units was placed in a trust account (the “Trust Account”) and invested in U.S. government
securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment
Company Act”), with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money
market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of:
(i) the completion of a Business Combination or (ii) the distribution of the funds in the Trust Account to the Company’s
stockholders, as described below.
The Company’s management has broad discretion
with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Placement Units, although
substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance
that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business
Combinations with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in
the Trust Account (as defined below) (less any deferred underwriting commissions and taxes payable on interest earned on the Trust Account)
at the time of the signing a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination
if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise
acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment
Company Act of 1940. There is no assurance that the Company will be able to successfully effect a Business Combination.
The Company will provide its holders of the outstanding
Public Shares (the “Public Stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the
completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination
or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination
or conduct a tender offer will be made by the Company, solely in its discretion. The Public Stockholders will be entitled to redeem their
Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.20 per Public Share, plus
any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).
If the Company seeks stockholder approval, it
will only proceed with a Business Combination, if a majority of the shares voted are voted in favor of the Business Combination. If a
stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other reasons, the
Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”),
which will be filed prior to the Initial Public Offering, increase the number of authorized shares, conduct the redemptions pursuant
to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with
the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company
decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy
solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in
connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5), placement shares
(shares of Class A common stock included in the Placement Units) and any Public Shares purchased during or after the Initial Public Offering
in favor of approving a Business Combination. Additionally, each Public Stockholder may elect to redeem their Public Shares irrespective
of whether they vote for or against the proposed transaction or don’t vote at all.
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
Notwithstanding the above, if the Company seeks
stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and
Restated Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other
person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more
than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company.
The Sponsor has agreed (a) to waive its
redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination,
(b) to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within
12 months from the closing of the Initial Public Offering (or up to 18 months, if we extend the time to complete a business
combination as described in this prospectus) and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation
(i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s
initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or with respect
to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides
the Public Stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
The Company will have until 12 months from
the closing of the Initial Public Offering, or until March 31, 2024, to complete a Business Combination. However, if the Company
anticipates that it may not be able to consummate a Business Combination within 12 months, the Company may, by resolution of its
Board of Directors and if requested by the Sponsor, extend the period of time the Company has to consummate a Business Combination up
to two times, each by an additional three months (for a total of up to 18 months), provided that, pursuant to the terms of the
Company’s Amended and Restated Certificate of Incorporation and the trust agreement entered into between the Company and Continental
Stock Transfer & Trust Company in connection with the Initial Public Offering, in order for the time available for the Company
to consummate a Business Combination to be extended, the Sponsor or its affiliates or designees, upon five days’ advance notice
prior to the applicable deadline, must deposit into the trust account $690,000 in full, (or $0.10 per share) for each extension, on or
prior to the date of the applicable deadline. If the Company is unable to complete a Business Combination within 12 months (or 18 month
period if extended) (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding
up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held
in the Trust Account and not previously released to the Company to pay its tax obligations (less up to $100,000 of interest to pay dissolution
expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’
rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably
possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board
of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims
of creditors and the requirements of other applicable law.
On February 29, 2024, the board of directors approved the exercise
by the Company of the automatic extension of the time the Company has to complete a business combination by an additional three months
to June 30, 2024 (see Note 10).
On March 28, 2024, the Sponsor deposited $ 690,000 into the Company’s
trust account in order to extend the date by which the Company has to consummate a business combination from March 31, 2024 to June 30,
2024 (see Note 10).
The Sponsor has agreed to waive its liquidation
rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However,
if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares will be entitled to liquidating distributions
from the Trust Account if the Company fails to complete a Business Combination within the Combination Period. The underwriters have agreed
to waive their rights to their deferred underwriting commission (see Note 6) held in the Trust Account in the event the Company
does not complete a Business Combination within in the Combination Period and, in such event, such amounts will be included with the
other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution,
it is possible that the per share value of the assets remaining available for distribution will be less than the Initial Public Offering
price per Unit ($10.00).
In order to protect the amounts held in the Trust
Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or
products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement,
reduce the amount of funds in the Trust Account to below (1) $10.20 per Public Share or (2) the actual amount per Public Share
held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets,
in each case net of the interest which may be withdrawn to pay our taxes. This liability will not apply with respect to any claims by
a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s
indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities
Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable
against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will
seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to
have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses
or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim
of any kind in or to monies held in the Trust Account.
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
Going Concern Consideration
The Company’s liquidity needs prior to
the consummation of the Initial Public Offering were satisfied through the payment of $25,000 from the Sponsor issuance of Founder Shares
and loan proceeds from the Sponsor under the Promissory Note (as defined in Note 5). Subsequent to the consummation of the
Initial Public Offering, the Company’s liquidity has been satisfied through the net proceeds from the Initial Public Offering and
the sale of the Placement Units in a private placement.
In order to fund working capital deficiencies
or finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the
Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital
Loans”). If the Company completes a Business Combination, it would repay such loaned amounts at that time. Up to $1,500,000 of such
Working Capital Loans may be converted into units of the post-Business Combination entity at a price of $10.00 per unit at the option
of the lender. The units would be identical to the Placement Units. As of December 31, 2023 and 2022, there was no amount outstanding
under the Working Capital Loan.
In connection with the Company’s assessment
of going concern considerations in accordance with the authoritative guidance in Financial Accounting Standard Board (“FASB”)
Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue
as a Going Concern,” management has determined that the Company currently lacks the liquidity it needs to sustain operations for
a reasonable period of time, which is considered to be at least one year from the date that the financial statements are issued as
it expects to continue to incur significant costs in pursuit of its acquisition plans. In addition, the Company has until June 30, 2024
(as extended, or September 30, 2024 if we extend the period of time to consummate a Business Combination by the full amount of time) to
consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If
a Business Combination is not consummated by June 30, 2024 (or September 30, 2024, if extended by the full amount of time), there will
be a mandatory liquidation and subsequent dissolution. Management has determined that mandatory liquidation, should a Business Combination
not occur, and an extension not be approved by the stockholders of the Company, and potential subsequent dissolution and the liquidity
issue raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date the financial
statements are issued. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to
liquidate after June 30, 2024 (or September 30, 2024, if extended by the full amount of time). The Company intends to continue to search
for and seek to complete a Business Combination before the mandatory liquidation date. The Company is within 12 months of its mandatory
liquidation date as of the time of filing of this Annual Report on Form 10-K.
Inflation Reduction Act of 2022
On August 16, 2022, the Inflation Reduction
Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1%
excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly
traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself,
not its stockholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the
shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are
permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same
taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “Treasury”)
has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.
Any redemption or other repurchase that occurs
after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax.
Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or
otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection
with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount
of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection
with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations
and other guidance from the Treasury. In addition, because the excise tax would be payable by the Company and not by the redeeming holder,
the mechanics of any required payment of the excise tax have not been determined. The foregoing could cause a reduction in the cash available
on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements
are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant
to the rules and regulations of the SEC.
Emerging Growth Company
The Company is an “emerging growth company,”
as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS
Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public
companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered
public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations
regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS
Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private
companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities
registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides
that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth
companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period,
which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company,
as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth
company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of
the potential differences in accounting standards used.
Use of Estimates
The preparation of the financial statements in
conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements.
Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near
term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Cash and Cash Equivalents
The Company considers all short-term investments
with an original maturity of three months or less when purchased to be cash equivalents. The Company had $607,816 and $34,393 in
cash and no cash equivalents as of December 31, 2023 and 2022, respectively.
Cash and Marketable Securities in Trust
Account
At December 31, 2023, substantially all of the
assets held in the Trust Account were held in U.S. Treasury Bills. The Company accounts for its marketable securities as trading securities
under ASC 320, where securities are presented at fair value on the balance sheets and with unrealized gains or losses, if any, presented
on the statements of operations. From inception through December 31, 2023, the Company did not withdraw any interest earned on the Trust
Account. As of December 31, 2022 there were no funds deposited in the Trust Account.
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
Offering Costs
The Company complies with the requirements of
the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”.
Offering costs consist principally of professional and registration fees, cash underwriting discount, and deferred underwriting fees
incurred through the balance sheet date that are related to the Initial Public Offering. Offering costs were allocated to the separable
financial instruments issued in the Initial Public Offering based on relative fair value basis, compared to total proceeds received.
Offering costs allocated to the Public Shares were charged to temporary equity and offering costs allocated to Public Rights (as defined
in Note 3) were charged to stockholders’ deficit upon the completion of the Initial Public Offering. Offering costs paid as
of December 31, 2023 and 2022 were $581,635 and $209,627, respectively.
Class A Redeemable Stock Classification
The Public Shares contain a redemption feature
which allows for the redemption of such Public Shares in connection with the Company’s liquidation, or if there is a stockholder
vote or tender offer in connection with the Company’s initial business combination. In accordance with ASC 480-10-S99, the Company
classifies Public Shares subject to redemption outside of permanent equity as the redemption provisions are not solely within the control
of the Company. The Public Shares sold as part of the Units in the Initial Public Offering were issued with other freestanding instruments
(i.e., Public Rights) and as such, the initial carrying value of Public Shares classified as temporary equity are the allocated proceeds
determined in accordance with ASC 470-20. The Company recognizes changes in redemption value immediately as it occurs and will adjust
the carrying value of redeemable shares to equal the redemption value at the end of each reporting period. Immediately upon the closing
of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption amount value. The change in
the carrying value of redeemable shares will result in charges against additional paid-in capital and accumulated deficit. Accordingly,
at December 31, 2023, Class A common stock subject to possible redemption is presented at redemption value as temporary equity,
outside of the stockholders’ deficit section of the Company’s balance sheet.
At December 31, 2023, the Class A common
stock subject to redemption reflected in the balance sheet are reconciled in the following table:
Gross proceeds | |
$ | 69,000,000 | |
Less: | |
| | |
Proceeds allocated to Public Rights | |
| (745,200 | ) |
Class A common stock issuance costs | |
| (3,882,029 | ) |
Plus: | |
| | |
Remeasurement of carrying value to redemption value | |
| 7,852,179 | |
Class A Common Stock subject to possible redemption, December 31, 2023 | |
$ | 72,224,950 | |
Income Taxes
The Company accounts for income taxes under ASC 740, “Income
Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences
between the financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax
loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than
not that all or a portion of deferred tax assets will not be realized.
ASC 740 also clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process
for financial statement recognition and measurement of a tax position 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. ASC 740 also provides
guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
The Company recognizes accrued interest and penalties
related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest
and penalties as of December 31, 2023 and 2022. 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 has identified the United States
as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception.
These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and
compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax
benefits will materially change over the next twelve months.
Net Income (Loss) Per Share of Common Stock
The Company complies with accounting and disclosure
requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per share of common stock is computed by dividing
net income (loss) by the weighted average number of shares of common stock outstanding for the period. Subsequent remeasurement of the
redeemable Class A common stock is excluded from income (loss) per share of common stock as the redemption value approximates fair
value. Net income (loss) per share of common stock is computed by dividing the pro rata net income between the shares of Class A
common stock and the shares of Class B common stock by the weighted average number of shares of common stock outstanding for each
of the periods. The calculation of diluted income (loss) per share does not consider the effect of the rights issued in connection with
the IPO, as well as rights issuable upon the exercise of the conversion option on outstanding working capital loans, since the exercise
of the rights is contingent upon the occurrence of future events and the inclusion of such rights would be anti-dilutive. The rights
are exercisable for 729,450 shares of Class A common stock in the aggregate.
The following table reflects the calculation
of basic and diluted net income (loss) per share of common stock (in dollars, except share amounts):
| |
For the Year December 31, | |
| |
2023 | | |
2022 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Basic net income (loss) per common share | |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| |
Allocation of net income (loss) | |
$ | 1,347,254 | | |
$ | — | | |
$ | (1,746 | ) | |
$ | (2,274 | ) |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic weighted average common shares outstanding | |
| 7,165,376 | | |
| 1 | | |
| 406,849 | | |
| 530,137 | |
Basic net income (loss) per common share | |
$ | 0.19 | | |
$ | — | | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
| |
For the Year December 31, | |
| |
2023 | | |
2022 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Diluted net income (loss) per common share | |
| | |
| | |
| | |
| |
Numerator: | |
| | |
| | |
| | |
| |
Allocation of net income (loss) | |
$ | 1,347,254 | | |
$ | — | | |
$ | (1,746 | ) | |
$ | (2,274 | ) |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Diluted weighted average common shares outstanding | |
| 7,220,855 | | |
| 1 | | |
| 406,849 | | |
| 530,137 | |
Diluted net income (loss) per common share | |
$ | 0.19 | | |
$ | — | | |
$ | (0.00 | ) | |
$ | (0.00 | ) |
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal
Deposit Insurance Corporation coverage limit of $250,000. The Company has not experienced losses on this account.
Fair Value of Financial Instruments
The fair value of the Company’s assets
and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying
amounts represented in the accompanying balance sheet, primarily due to their short-term nature.
Derivative Financial Instruments
The Company evaluates its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with FASB ASC
Topic 815, “Derivatives and Hedging”. Derivative instruments are initially recorded at fair value on the grant date and re-valued
at each reporting date, with changes in the fair value reported in the statement of operations. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement
or conversion of the instruments could be required within 12 months of the balance sheet date.
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
Stock-Based Compensation
The Company adopted ASC Topic 718, Compensation—Stock
Compensation, guidance to account for its stock-based compensation. It defines a fair value-based method of accounting for an employee
stock option or similar equity instrument. The Company recognizes all forms of share-based payments, including stock option grants, warrants
and restricted stock grants, at their fair value on the grant date, which are based on the estimated number of awards that are ultimately
expected to vest. Share-based payments, excluding restricted stock, are valued using a Black-Scholes option pricing model. Grants of
share-based payment awards issued to non-employees for services rendered have been recorded at the fair value of the share-based payment,
which is the more readily determinable value. The grants are amortized on a straight-line basis over the requisite service periods, which
is generally the vesting period. If an award is granted, but vesting does not occur, any previously recognized compensation cost is reversed
in the period related to the termination of service. Stock-based compensation expenses are included in costs and operating expenses depending
on the nature of the services provided in the statement of operations.
Recent Accounting Standards
In June 2016, the FASB issued Accounting
Standards Update (“ASU”) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement
of Credit Losses on Financial Instruments (“ASU 2016-13”). This update requires financial assets measured at amortized
cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant
information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect
the collectability of the reported amount. Since June 2016, the FASB issued clarifying updates to the new standard including changing
the effective date for smaller reporting companies. The guidance is effective for fiscal years beginning after December 15,
2022, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-13 on January 1,
2023. The adoption of ASU 2016-13 did not have a material impact on the financial statements.
In December 2023, the FASB issued ASU 2023-09,
Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information
within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective
for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption
of ASU 2023-09 will have a material impact on its financial statements and disclosures.
Management does not believe that any recently
issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial
statements.
NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, the
Company sold 6,900,000 Units, which includes the full exercise by the underwriters of their over-allotment option in the amount of 900,000
Units, at a purchase price of $10.00 per Unit. Each Unit consists of one share of the Company’s Class A common stock and one
right to receive one-tenth (1/10) of a share of Class A common stock.
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial
Public Offering, the Sponsor purchased an aggregate of 394,500 Placement Units at a price of $10.00 per Placement Unit, for an aggregate
purchase price of $3,945,000 in a private placement. A portion of the proceeds from the Placement Units was added to the proceeds from
the Initial Public Offering held in the Trust Account so that the Trust Account holds $10.20 per unit sold. If the Company does not complete
a Business Combination within the Combination Period, the proceeds from the sale of the Placement Units will be used to fund the redemption
of the Public Shares (subject to the requirements of applicable law) and the Placement Units will expire worthless.
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On May 17, 2022, the Sponsor purchased 1,940,625
shares (the “Founder Shares”) of the Company’s Class B common stock for an aggregate price of $25,000. On September 23,
2022, the Company and the Sponsor entered into a share exchange agreement pursuant to which the Sponsor exchanged 1,940,624 Founder Shares
for 1,940,624 shares of Class A common stock. As a result of the share exchange, the Founder Shares consisted of 1,940,624 shares
of Class A common stock and 1 share of Class B common stock. On January 20, 2023, the Sponsor forfeited for no consideration
and the Company canceled 215,625 of such Founder Shares, resulting in 1,724,999 Founder Shares remaining outstanding of Class A common
stock and 1 share of Class B common stock. The 1 share of Class B common stock will automatically be canceled at the time of
the initial Business Combination. The holder of the 1 share of Class B common stock will have the right to elect all of the directors
prior to the initial Business Combination and the holders of the shares of Class A common stock will not be entitled to vote on the
election of directors during such time.
On March 28, 2023, the Chief Financial Officer
of the Company and three directors (the “subscribers”) entered into subscription agreements with the Sponsor for an interest
in the Sponsor company for their own investment purposes. The interest is backed by the Class A common stock owned by the Company
as of March 28, 2023, the date of issuance. As such, the subscribers will participate in the profits or losses of the Sponsor company
though date of liquidation. The subscription into interests of the Class A common stock founder shares to the Company’s management
and directors is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”). Under ASC
718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The 47,500 Class A
common stock which support the subscription interests of management and the directors has a fair value of $207,087 or $4.36 per share,
which has been recorded as stock-based compensation. The fair value was determined using a Monte Carlo Model with a volatility of 7.2%,
risk-free rate of 3.97% and a stock price of $9.89 as of the valuation date of March 28, 2023. These interests are not subject to
performance conditions and as such stock-based compensation of $207,087 was recorded on the statement of operations.
On November 10, 2023, the Company reimbursed its officers an aggregate
amount of $3,545 for the out-of-pocket expenses paid by officers in connection with meeting a prospective target.
The Sponsor has agreed, subject to certain limited
exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier to occur of: (1) one year after the
completion of a Business Combination or (B) subsequent to a Business Combination, (x) if the last reported sale price of the
Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least 180 days after a Business Combination,
or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results
in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Promissory Note — Related Party
On May 17, 2022, the Company issued an unsecured
promissory note to the Sponsor (the “Promissory Note”) as amended on January 20, 2023 and as further amended as of March 31,
2023, pursuant to which the Company may borrow up to an aggregate principal amount of $400,000 (as amended). The Promissory Note is
non-interest bearing and is payable on the earlier of (i) the close of the Company’s initial business combination or (ii) September 30,
2024. On November 21, 2023, the Promissory Note was further amended to permit the Company to pay certain expenses of the Sponsor which
would reduce the principal balance of the Promissory Note by the same amount. As of December 31, 2023 and 2022, there was $321,585 and
$225,000, respectively, outstanding under the Promissory Note.
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, the terms of such Working Capital
Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either
be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such
Working Capital Loans may be convertible into units of the post-Business Combination entity at a price of $10.00 per unit. The units
would be identical to the Placement Units (see Note 4). As of December 31, 2023 and 2022, there was no amount outstanding under
the Working Capital Loan.
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 6. COMMITMENTS AND CONTINGENCIES
Registration and Stockholder’s Rights
Pursuant to a registration rights agreement entered
into on March 28, 2023, the holders of the Founder Shares, Placement Units and any unit that may be issued upon conversion of the
Working Capital Loans (and any underlying shares of Class A common stock) are entitled to registration rights pursuant to a registration
rights agreement requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion
to shares of our Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding
short form registration demands, that the Company register such securities. In addition, the holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to
require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration
rights agreement will provide that the Company will not be required to effect or permit any registration or cause any registration statement
to become effective until termination of the applicable lock-up period. The registration rights agreement does not contain liquidated
damages or other cash settlement provisions resulting from delays in registering the Company’s securities. The Company will bear
the expenses incurred in connection with the filing of any such registration statements.
Underwriting Agreement
The Company granted the underwriter a 45-day
option to purchase up to 900,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting
discounts and commissions. On March 31, 2023, simultaneously with the closing of the Initial Public Offering, the underwriters elected
to fully exercise the over-allotment option to purchase an additional 900,000 Units at a price of $10.00 per Unit.
The underwriters were also entitled to a cash
underwriting discount of $0.15 per Unit, or $1,035,000 in the aggregate, which was paid upon the closing of the Initial Public Offering.
In addition, the underwriters are entitled to a deferred fee of $0.30 per Unit, or $2,070,000 in the aggregate. The deferred fee will
become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business
Combination, subject to the terms of the underwriting agreement.
Advisory Agreement
Pursuant to the advisory agreement entered into in September 2022 with
LifeSci Capital LLC (“LifeSci”), further amended in March 2023, upon the consummation of the initial business combination,
the Company agreed to pay LifeSci equal to one and one half (1.5%) percent of the total consideration paid in connection with the initial
business combination in the form of equity interests in the entity that survives any such business combination in exchange for the provision
by the underwriters of certain services relating to the initial business combination.
For the purposes of this section, “total
consideration” means the total market value of, without duplication, all cash, securities, or other property paid or transferred
at the closing of such transaction by the target’s stockholders or to be paid or transferred in the future to the target’s
stockholders with respect to such transaction (other than payments of interest or dividends and any contingent or earnout consideration
based upon future performance of the combined companies, however characterized), including, without limitation, to the extent applicable,
any net value paid in respect of (i) the assets of the target and (ii) the capital stock of the target (and the spread value of any “in
the money” securities convertible into options, warrants or other rights to acquire such capital stock), after giving effect to
the assumption, retirement or defeasance, directly or indirectly (by operation of law or otherwise), of any long-term liabilities of the
target or repayment of indebtedness, including, without limitation, indebtedness secured by the assets of the target, capital leases or
preferred stock obligations; provided, that for the avoidance of doubt, any funds in the trust account (as may be applicable in the case
of a Transaction) or financing proceeds raised in connection with the closing of the transaction (including by way of an offering, the
compensation to underwriters for which is provided for below), in either case, that are not paid to the target’s stockholders as
consideration in the transaction will not be included as part of the Total Consideration.
For purposes of this section, the market value
of any publicly traded common stock, whether already outstanding or newly-issued, will be equal to the greater of: (i) the value of such
common stock issued to the target upon the closing of a transaction at a price equal to $10.00 per share; and (ii) the dollar volume-weighted
average price (VWAP) for such security on the principal securities exchange or securities market on which such security is then traded
during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through
its “HP” function (set to weighted average) for the first five (5) trading days following the consummation of the transaction.
Additionally, the Company agreed to reimburse the underwriters for
all out-of-pocket documented costs and expenses (including fees and expenses of counsel) incurred by the underwriters in connection with
provision of such services, up to $50,000 in the aggregate, and, upon the consummation of the initial business combination, to reimburse
the underwriters for any such expenses incurred in excess of $50,000.
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
NOTE 7. STOCKHOLDER’S (DEFICIT) EQUITY
Preferred Stock — The
Company is authorized to issue 1,000,000 shares of $0.0001 par value preferred stock. At December 31, 2023 and 2022, there were no shares
of preferred stock issued and outstanding.
Class A Common Stock —
The Company is authorized to issue up to 100,000,000 shares of Class A, $0.0001 par value common stock. Holders of the Company’s
common stock are entitled to one vote for each share. At December 31, 2023 and 2022, there were 2,119,499 and 1,724,999 shares of Class A
common stock issued and outstanding, excluding 6,900,000 and 0 shares of Class A common stock subject to possible redemption, respectively.
Class B Common Stock —
The Company is authorized to issue up to 5,000,000 shares of Class B, $0.0001 par value common stock. Holders of the Company’s
common stock are entitled to one vote for each share. At December 31, 2023 and 2022, there was 1 share of Class B common stock issued
and outstanding.
The holder of our 1 share of Class B common
stock will have the right to elect all of our directors prior to our initial business combination and the holders of our shares of Class A
common stock will not be entitled to vote on the election of directors during such time. Holders of Class A common stock and Class B
common stock will vote together as a single class on other matters submitted to a vote of stockholders, except as required by law. However,
with respect to amending our charter to increase or decrease the aggregate number of authorized shares, holders of our Class A common
stock and holders of our Class B common stock will vote as a separate class.
Rights — Except
in cases where the Company is not the surviving company in a Business Combination, each holder of a Public Right will automatically receive
one-tenth (1/10) of one share of common stock upon consummation of a Business Combination, even if the holder of a Public Right converted
all shares held by him, her or it in connection with a Business Combination or an amendment to the Company’s Amended and Restated
Certificate of Incorporation with respect to its probusiness combination activities. In the event that the Company will not be the surviving
company upon completion of a Business Combination, each holder of a Public Right will be required to affirmatively convert his, her or
its rights in order to receive the one-tenth (1/10) of a share underlying each Public Right upon consummation of the Business Combination.
The Company will not issue fractional shares
in connection with an exchange of Public Rights. Fractional shares will either be rounded down to the nearest whole share or otherwise
addressed in accordance with the applicable provisions of the Delaware General Corporation Law. As a result, the holders of the Public
Rights must hold rights in multiples of 10 in order to receive shares for all of the holders’ rights upon closing of a Business
Combination.
NOTE 8. INCOME TAXES
The Company’s net deferred tax assets and liabilities are as
follows:
| |
December 31, | | |
December 31, | |
| |
2023 | | |
2022 | |
Deferred tax liability | |
| | |
| |
Startup Costs | |
$ | 82,679 | | |
$ | 672 | |
Unrealized gain - Trust | |
| (210,152 | ) | |
| — | |
Total deferred tax (liability) asset | |
| (127,473 | ) | |
| 672 | |
Valuation allowance | |
| (82,679 | ) | |
| (672 | ) |
Deferred tax liability, net of allowance | |
$ | (210,152 | ) | |
$ | — | |
The income tax provisions for the years
ended December 31, 2023 and 2022 consists of the following:
| |
December 31, | | |
December 31, | |
| |
2023 | | |
2022 | |
Federal | |
| | |
| |
Current | |
$ | 306,834 | | |
$ | — | |
Deferred | |
| 128,145 | | |
| (672 | ) |
State | |
| | | |
| | |
Current | |
| — | | |
| — | |
Deferred | |
| — | | |
| — | |
Change in valuation allowance | |
| 82,007 | | |
| 672 | |
Income tax provision | |
$ | 516,986 | | |
$ | — | |
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
As of December 31, 2023 and 2022, the Company had no 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, 2023 and 2022, 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 of 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 years ended December 31, 2023 and 2022, the change in the valuation allowance were $82,007 and
$672, respectively.
A reconciliation of the federal income
tax rate to the Company’s effective tax rate is as follows:
|
|
December 31, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
Statutory federal income tax rate |
|
|
21.0 |
% |
|
|
21.0 |
% |
Fair value of compensation expense |
|
|
2.3 |
% |
|
|
0.0 |
% |
Change in valuation allowance |
|
|
4.4 |
% |
|
|
(16.7 |
)% |
Income tax provision |
|
|
27.7 |
% |
|
|
4.3 |
% |
The Company’s effective tax
rates for the periods presented differ from the expected (statutory) rates due to stock-based compensation expense and the valuation
allowance on the deferred tax assets related to organization expenses.
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.
NOTE 9. FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for
its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets
and liabilities that are-measured and reported at fair value at least annually.
The fair value of the Company’s financial
assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale
of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the
measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of
observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions
about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and
liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level
1: |
Quoted
prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions
for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
|
|
Level
2: |
Observable
inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities
and quoted prices for identical assets or liabilities in markets that are not active. |
|
|
Level
3: |
Unobservable
inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
TRAILBLAZER MERGER CORPORATION I
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2023
At December 31, 2023, assets held in the Trust
Account were comprised of $152 in cash and $72,994,711 in U.S. Treasury securities. During the year ended December 31, 2023, the Company
did not withdraw any interest income from the Trust Account.
The following table presents information about
the Company’s assets that are measured at fair value on a recurring basis at December 31, 2023 and indicates the fair value hierarchy
of the valuation inputs the Company utilized to determine such fair value.
Description
| |
Level | | |
December 31, 2023 | | |
December 31, 2022 | |
Assets: | |
| | |
| | |
| |
Marketable securities held in Trust Account | |
| 1 | | |
$ | 72,994,711 | | |
$ | — | |
The following table presents information about
the Company’s equity instruments that are measured at fair value at March 31, 2023, and indicates the fair value hierarchy of the
valuation inputs the Company utilized to determine such fair value.
| |
Level | | |
March 31, 2023 | |
Equity: | |
| | | |
| | |
Fair Value of Public Rights for common stock subject to redemption allocation | |
| 3 | | |
$ | 745,200 | |
The rights were valued based on market comparables.
The following criteria was utilized to select comparable Special Purpose Acquisition Companies who were pre-business combination and
included rights as part of their units that were publicly trading with significant time remaining to complete their initial business
combination:
Criteria | |
Low | | |
High | |
IPO Proceeds (in millions of dollars) | |
| 50 | | |
| 240 | |
Warrant Coverage | |
| — | | |
| 1.0 | |
Rights Coverage (per unit) | |
| 0.05 | | |
| 0.20 | |
Remaining Months to Complete | |
| — | | |
| 13 | |
The appraiser utilized the median market price
of 0.108 as the fair value of the Rights included in the IPO offering.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events
and transactions that occurred after the balance sheet date through the date that the financial statements were issued. Based upon this
review, except as set forth below, the Company did not identify any subsequent events that would have required adjustment or disclosure
in the financial statements.
On February 29, 2024, the board of
directors approved the exercise by the Company of the automatic extension of the time the Company has to complete a business combination
by an additional three months. Pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation and the
trust agreement entered into between the Company and Continental Stock Transfer & Trust Company in connection with the Initial Public
Offering, in order for the time available for the Company to consummate a Business Combination to be extended, the Sponsor or its affiliates
or designees, upon five days’ advance notice prior to the applicable deadline, must deposit into the trust account $690,000 in full,
(or $0.10 per share) for each extension, on or prior to the date of the applicable deadline.
Extension
Pursuant to the terms of the Company’s
amended and restated certificate of incorporation and the trust agreement entered into between the Company and Continental Stock Transfer
& Trust Company, if the Company anticipates that it may not be able to consummate its initial business combination within 12 months
from the closing of the initial public offering, it may, by resolution of its board of directors and if requested by its Sponsor, extend
the period of time it will have to consummate an initial business combination up to two times, each by an additional three months (for
a total of up to 18 months from the closing of the initial public offering). The Company must deposit $690,000 into the trust account
for each extension.
On March 28, 2024, the Sponsor deposited
$ 690,000 (the “Extension Payment”) into the Company’s trust account in order to extend the date by which the Company
has to consummate a business combination from March 31, 2024 to June 30, 2024.
The Extension Payment was loaned as a draw down pursuant to an unsecured
promissory note the Company issued to the Sponsor on May 17, 2022, pursuant to the Company was able borrow up to an aggregate principal
amount of $300,000 (the “Note”). On January 20, 2023, the maximum amount available under the Note was amended and increased
to $400,000. As of March 31, 2023, both the Company and the Sponsor mutually agreed to extend the maturity date of the original Note.
The Note is non-interest bearing and payable on the earlier of (i) the close of the Company’s initial business combination or (ii)
September 30, 2024. On March 27, 2024, the maximum amount available under the Note was, again, amended and increased to $1,090,000.
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compsci:item
Pursuant to our amended and
restated certificate of incorporation, our authorized capital stock will consist of 100,000,000 shares of Class A common stock, $0.0001
par value, 5,000,000 shares of Class B common stock, $0.0001 par value, and 1,000,000 shares of undesignated preferred stock, $0.0001
par value. .
Each unit has an offering price
of $10.00 and consists of one share of Class A common stock and one right to receive one-tenth (1/10) of a share of Class A common stock.
Each right entitles the holder
thereof to receive one-tenth (1/10) of one Class A common stock upon consummation of our initial business combination We will not
issue fractional shares upon exchange of rights. A fractional interest in a share will either be rounded down to the nearest whole number
of the number of shares to be issued to holder and, upon conversion, may pay in cash the fair value of fractions of a share as of the
time when those entitled to receive such fractions are determined. Accordingly, unless you hold a multiple of ten units, your rights may
expire worthless..
Prior to the consummation of
our initial business combination, only holders of our Class B common stock will have the right to vote on the election of directors.
Holders of the Class A common stock will not be entitled to vote on the election of directors during such time. These provisions
of our amended and restated certificate of incorporation may only be amended if approved by at least 90% of our common stock voting at
a stockholder meeting. With respect to other matters submitted to a vote of our stockholders, including any vote in connection with our
initial business combination, except as required by applicable law or stock exchange rule, holders of our Class A common stock and
holders of our Class B common stock will vote together as a single class, with each share entitling the holder to one vote. However,
with respect to amending our charter to increase or decrease the aggregate number of authorized shares, holders of our Class A common
stock and holders of our Class B common stock will vote as a separate class. Unless specified in our amended and restated certificate
of incorporation or bylaws, or as required by applicable provisions of the Delaware General Corporation Law (the “DGCL”) or
applicable stock exchange rules, the affirmative vote of a majority of our shares of common stock that are voted is required to approve
any such matter voted on by our stockholders. Our board of directors will be divided into three classes, each of which will generally
serve for a term of only one class of directors being elected in each year. There is no cumulative voting with respect to the election
of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the
directors. Our stockholders are entitled to receive ratable dividends when, as and if declared by the board of directors out of funds
legally available therefor.
Because our amended and restated
certificate of incorporation will authorize the issuance of up to 100,000,000 shares of Class A common stock, if we were to enter
into an initial business combination, we may (depending on the terms of such an initial business combination) be required to increase
the number of shares of Class A common stock which we are authorized to issue at the same time as our stockholders vote on the initial
business combination to the extent we seek stockholder approval in connection with our initial business combination.
In accordance with Nasdaq corporate
governance requirements, we are not required to hold an annual meeting until no later than one year after our first fiscal year end following
our listing on Nasdaq. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for
the purposes of electing directors in accordance with our bylaws, unless such election is made by written consent in lieu of such a meeting.
We may not hold an annual meeting of stockholders to elect new directors prior to the consummation of our initial business combination,
and thus we may not be in compliance with Section 211(b) of the DGCL, which requires an annual meeting. Therefore, if our stockholders
want us to hold an annual meeting prior to the consummation of our initial business combination, they may attempt to force us to hold
one by submitting an application to the Delaware Court of Chancery in accordance with Section 211(c) of the DGCL.
We will provide our stockholders
with the opportunity to redeem all or a portion of their public shares upon the completion of our initial business combination at a per-share
price, payable in cash, equal to the aggregate amount then on deposit in the trust account as of two business days prior to the consummation
of our initial business combination including interest earned on the funds held in the trust account and not previously released to us
to pay our taxes, divided by the number of then outstanding public share. The amount in the trust account is initially anticipated to
be approximately $10.20 per public share. The per-share amount we will distribute to investors who properly redeem their shares will not
be reduced by the deferred underwriting commissions we will pay to the underwriters. Our sponsor, officers and directors have entered
into a letter agreement with us, pursuant to which they have agreed to waive their redemption rights with respect to any founder shares,
any placement shares and any public shares held by them in connection with (i) the completion of our initial business combination or (ii)
a stockholder vote to approve an amendment to our amended and restated certificate of incorporation (A) to modify the substance or timing
of our obligation to allow redemption in connection with our initial business combination or to redeem 100% of our public shares if we
do not complete our initial business combination within twelve (12) months from the closing of the offering (or up to 18 months, if we
extend the time to complete an initial business combination as described in the prospectus) or (B) with respect to any other provision
relating to stockholders’ rights or pre-initial business combination activity.
In the event of a liquidation,
dissolution or winding up of the company after an initial business combination, our stockholders are entitled to share ratably in all
assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock,
if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking
fund provisions applicable to the common stock, except that we will provide our stockholders with the opportunity to redeem their public
shares for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, upon the completion of
our initial business combination.
The founder shares are identical
to the shares of Class A common stock included in the units being sold in the offering, and holders of founder shares have the
same stockholder rights as public stockholders, except that (i) the founder shares are subject to certain transfer restrictions,
as described in more detail below, (ii) our sponsor, officers and directors have entered into a letter agreement with us, pursuant
to which they have agreed (A) to waive their redemption rights with respect to any founder shares, any placement shares and any public
shares held by them in connection with the completion of our initial business combination, (B) to waive their redemption rights with
respect to their founder shares, placement shares and any public shares in connection with a stockholder vote to approve an amendment
to our amended and restated certificate of incorporation (x) to modify the substance or timing of our obligation to allow redemption
in connection with our initial business combination or to redeem 100% of our public shares if we do not complete our initial business
combination within twelve (12) months from the closing of the offering (or up to 18 months, if we extend the time to complete a business
combination as described in the prospectus), or (y) with respect to any other provision relating to stockholders’ rights or
pre-initial business combination activity and (C) to waive their rights to liquidating distributions from the trust account with
respect to any founder shares and placement shares held by them if we fail to complete our initial business combination within twelve
(12) months from the closing of the offering (or up to 18 months, if we extend the time to complete a business combination as described
in the prospectus), although they will be entitled to liquidating distributions from the trust account with respect to any public shares
they hold if we fail to complete our initial business combination within such time period, and (iii) are entitled to registration
rights. If we submit our initial business combination to our public stockholders for a vote, our sponsor, officers and directors have
agreed pursuant to the letter agreement to vote any founder shares held by them and any public shares purchased during or after the offering
(including in open market and privately negotiated transactions) in favor of our initial business combination.
With certain limited exceptions,
the founder shares are not transferable, assignable or salable (except to our officers and directors and other persons or entities affiliated
with our sponsor, each of whom will be subject to the same transfer restrictions) until the earlier of (A) one year after the completion
of our initial business combination or (B) subsequent to our initial business combination, (x) if the last sale price of our
Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations
and the like) for any 20 trading days within any 30-trading day period commencing at least six months after our initial business
combination, or (y) the date on which we complete a liquidation, merger, capital stock exchange, reorganization or other similar
transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or
other property.
Our amended and restated certificate
of incorporation provides that shares of preferred stock may be issued from time to time in one or more series. Our board of directors
will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other
special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. Our board of directors
will be able to, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting
power and other rights of the holders of the common stock and could have anti-takeover effects. The ability of our board of directors
to issue preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of
us or the removal of existing management. We have no preferred stock outstanding at the date hereof. Although we do not currently intend
to issue any shares of preferred stock, we cannot assure you that we will not do so in the future. No shares of preferred stock are being
issued or registered in the offering.
The placement units (including
the placement shares and the placement rights included in the placement units, and the shares of common stock underlying the placement
rights) will not be transferable, assignable or saleable until 30 days after the completion of our initial business combination (except
that, among other limited exceptions as described under the section of the prospectus entitled “Principal Stockholders — Restrictions
on Transfers of Founder Shares and Placement Units” transfers, assignments and sales may be made to our officers and directors and
other persons or entities affiliated with or related to our sponsor, each of whom will be subject to the same transfer restrictions) so
long as they are held by our sponsor or its permitted transferees. Otherwise, the placement units have terms and provisions that are identical
to those of the units being sold in the offering, including as to exercise price, exercisability and exercise period. Each of the units
that may be issued upon conversion of working capital loans shall be identical to the placement units.
In order to fund working capital
deficiencies or finance transaction costs in connection with an intended initial business combination, our sponsor or an affiliate of
our sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required. Up to $1,500,000
of such loans may be convertible into units, at a price of $10.00 per unit at the option of the lender. The units would be identical to
the placement units.
Each holder of a right will
receive one-tenth (1/10) of one share of Class A common stock upon consummation of our initial business combination, even if the
holder of such right redeemed all shares of common stock held by it in connection with the initial business combination. No additional
consideration will be required to be paid by a holder of rights in order to receive its additional shares upon consummation of an initial
business combination, as the consideration related thereto has been included in the unit purchase price paid for by investors in the offering.
If we enter into a definitive agreement for a business combination in which we will not be the surviving entity, the definitive agreement
will provide for the holders of rights to receive the same per share consideration the holders of the Class A common stock will receive
in the transaction on an as-converted into common stock basis, and each holder of a right will be required to affirmatively convert his,
her or its rights in order to receive the 1/10 of a share underlying each right (without paying any additional consideration) upon consummation
of the business combination. More specifically, the right holder will be required to indicate its election to convert the rights into
underlying shares as well as to return the original rights certificates to us.
If we are unable to complete
an initial business combination within the required time period and we liquidate the funds held in the trust account, holders of rights
will not receive any such funds with respect to their rights, nor will they receive any distribution from our assets held outside of the
trust account with respect to such rights, and the rights will expire worthless.
As soon as practicable upon
the consummation of our initial business combination, we will direct registered holders of the rights to return their rights to our rights
agent. Upon receipt of the rights, the rights agent will issue to the registered holder of such rights the number of full shares of Class A
common stock to which it is entitled. We will notify registered holders of the rights to deliver their rights to the rights agent promptly
upon consummation of such business combination and have been informed by the rights agent that the process of exchanging their rights
for common stock should take no more than a matter of days. The foregoing exchange of rights is solely ministerial in nature and is not
intended to provide us with any means of avoiding our obligation to issue the shares underlying the rights upon consummation of our initial
business combination. Other than confirming that the rights delivered by a registered holder are valid, we will have no ability to avoid
delivery of the shares underlying the rights. Nevertheless, there are no contractual penalties for failure to deliver securities to the
holders of the rights upon consummation of an initial business combination. Additionally, in no event will we be required to net cash
settle the rights. Accordingly, you might not receive the Class A common stock underlying the rights.
The shares of Class A
common stock issuable upon conversion of the rights will be freely tradable (except to the extent held by affiliates of ours). We will
not issue fractional shares in connection with an exchange of rights. Fractional shares will be rounded down to the nearest whole share.
As a result, you must hold rights in multiples of 10 in order to receive shares for all of your rights upon closing of a business combination.
We have agreed that, subject
to applicable law, any action, proceeding or claim against us arising out of or relating in any way to the rights agreement will be brought
and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and we
irrevocably submit to such jurisdiction, which jurisdiction will be the exclusive forum for any such action, proceeding or claim. This
provision does not apply to claims under the Exchange Act or any claim for which the federal district courts of the United States of America
are the sole and exclusive forum.
We have not paid any cash dividends on our common
stock to date and do not intend to pay cash dividends prior to the completion of an initial business combination. The payment of cash
dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions
subsequent to completion of an initial business combination. The payment of any cash dividends subsequent to an initial business combination
will be within the discretion of our board of directors at such time. Further, if we incur any indebtedness, our ability to declare dividends
may be limited by restrictive covenants we may agree to in connection therewith.
WHEREAS, Payee made a loan to Maker in the original
principal amount of three hundred thousand dollars ($300,000.00) which amount was subsequently increased four hundred thousand dollars
($400,000.00) as evidenced by the Amendment to Promissory Note dated as of January 20, 2023; and
WHEREAS, Maker has certain payment obligations in
order to extend its life as a special purpose acquisition company in the aggregate amount of Six Hundred Ninety Thousand Dollars ($690,000)
(the “Extension Payment”) and Maker and Payee now desire to amend the provisions of the Note to increase the Principal
Amount by the Extension Payment as set forth herein.
NOW, THEREFORE, in consideration of the covenants
set forth herein, and other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged, Maker
and Payee hereby agree as follows:
1. Modifications to
the Note. The Note is hereby amended as follows:
“Trailblazer
Merger Corporation I, a Delaware corporation (the “Maker”), promises to pay to the order of Trailblazer Sponsor Group, LLC or
its registered assigns or successors in interest (the “Payee”) the principal sum of One Million Ninety Thousand Dollars ($1,090,000.00)
in lawful money of the United States of America, on the terms and conditions described below. All payments on this Note shall be made
by check or wire transfer of immediately available funds or as otherwise determined by the Maker to such account as the Payee may from
time to time designate by written notice in accordance with the provisions of this Note.”
None.
In connection with the Annual Report of Trailblazer
Merger Corporation I (the “Company”) on Form 10-K for the year ended December 31, 2023 as filed with the Securities and
Exchange Commission (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
The foregoing certification is being furnished solely pursuant to 18
U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.