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BurTech Acquisition (BRKH) - 2024 Q2 - Quarterly Report
BRKHBurTech Acquisition (BRKH)2024-08-13 21:23

IPO and Stockholder Actions - The Company completed its IPO on December 15, 2021, raising approximately 287.5millionfromthesaleof28,750,000unitsat287.5 million from the sale of 28,750,000 units at 10.00 per unit[128]. - Following a stockholder vote on March 10, 2023, approximately 227.8millionwasredeemed,resultingin6,630,703sharesofClassAcommonstockoutstanding[129].−OnDecember11,2023,stockholdersredeemed2,285,040shares,leadingtoapproximately227.8 million was redeemed, resulting in 6,630,703 shares of Class A common stock outstanding[129]. - On December 11, 2023, stockholders redeemed 2,285,040 shares, leading to approximately 24.5 million being removed from the trust account[129]. - The Company has approximately 68.0millionremaininginitstrustaccountafterredemptions[129].MergerAgreementandBusinessCombination−TheCompanyenteredintoaMergerAgreementonDecember22,2023,tomergewithBlaize,Inc.,withBlaizebecomingawhollyownedsubsidiary[134].−TheMergerAgreementincludesprovisionsfortheissuanceofupto6,833,333sharesofClassAcommonstocktoBlaizeforaggregategrossproceedsof68.0 million remaining in its trust account after redemptions[129]. Merger Agreement and Business Combination - The Company entered into a Merger Agreement on December 22, 2023, to merge with Blaize, Inc., with Blaize becoming a wholly owned subsidiary[134]. - The Merger Agreement includes provisions for the issuance of up to 6,833,333 shares of Class A common stock to Blaize for aggregate gross proceeds of 25.0 million[135]. - An earnout of up to 16.3 million shares of New Blaize common stock may be issued based on stock price performance over a five-year period[138]. - The closing of the Merger is subject to customary conditions, including shareholder approval and regulatory clearances[140]. - The Company will be renamed "Blaize Holdings, Inc." following the completion of the Merger[134]. - The Merger Agreement includes a provision for the Company to prepare and file a registration statement on Form S-4 to obtain shareholder approval for the Business Combination[145]. - The Merger Agreement allows for the termination by either party if requisite shareholder approvals are not obtained by December 31, 2024[147]. - The Company has agreed to not engage in discussions regarding other Business Combination Proposals during the period leading up to the Closing[148]. - The Company will enter into lock-up agreements restricting the transfer of common stock for 180 days post-Closing[156]. Financial Performance and Position - For the three months ended June 30, 2024, the company reported a net loss of 600,213,withoperatingcostsandfranchisetaxesamountingto600,213, with operating costs and franchise taxes amounting to 748,339[164]. - For the six months ended June 30, 2024, the net loss was 610,846,offsetbyinterestfrominvestmentsheldintheTrustAccountof610,846, offset by interest from investments held in the Trust Account of 1,253,990[165]. - As of June 30, 2024, the company had 48,885,820ininvestmentsheldintrustand48,885,820 in investments held in trust and 26,944 in its restricted cash account[166]. - The company has 1,500,000outstandingunderaConvertiblePromissoryNoteand1,500,000 outstanding under a Convertible Promissory Note and 1,059,551 in advances from the sponsor as of June 30, 2024[166]. - The company is less than 7 months from mandatory liquidation, raising substantial doubt about its ability to continue as a going concern[168]. - The company has no off-balance sheet financing arrangements as of June 30, 2024[169]. - The company does not have any long-term debt or capital lease obligations, only a monthly fee of 10,000foradministrativesupport[170].InternalControlsandTaxImplications−Thecompanyhasidentifiedmaterialweaknessesinitsinternalcontroloverfinancialreporting,whichmayaffectitsabilitytoreportfinancialresultsaccurately[186].−Thecompanymaybesubjecttoa110,000 for administrative support[170]. Internal Controls and Tax Implications - The company has identified material weaknesses in its internal control over financial reporting, which may affect its ability to report financial results accurately[186]. - The company may be subject to a 1% excise tax on stock repurchases after December 31, 2023, as per the Inflation Reduction Act of 2022[191]. - The company may be subject to an excise tax on redemptions or repurchases occurring after December 31, 2023, depending on various factors including fair market value and business combination structure[192]. - The excise tax implications could reduce the cash available for completing business combinations, impacting the company's ability to finalize such transactions[192]. - Recent interim guidance from the IRS indicates that the excise tax should not apply in the event of the company's liquidation, subject to certain exceptions[192]. Operational Status - The Company has not engaged in any operations or generated any revenues to date, with activities focused on organizational tasks and preparing for the Initial Public Offering[163]. - The Trust Amount must be at least 30,000,000; if it falls below this threshold, the Sponsor will purchase shares to cover the difference at a price of $10.00 per share[161]. - The Backstop Subscription Agreement is classified as a liability and will be recorded at fair value, subject to re-measurement until exercised[162]. - The Company incurs expenses related to being a public entity, including legal and financial reporting costs[163].