BZAI

Business Context and Reporting Period

This 10-Q filing covers the quarterly period ended June 30, 2024, for BurTech Acquisition Corp. (to be renamed Blaize Holdings, Inc. upon closing of its business combination). The Company is a blank check company (SPAC) incorporated in Delaware, currently in the process of consummating a merger with Blaize, Inc., an enviro-tech company. The Company has not commenced operations and generates no operating revenue; its activities are limited to organizational efforts and the search for a business combination.

Key Financial Metrics

Material Changes vs. Prior Period

• Net Loss vs. Net Income: The Company reported a net loss of $600,213 for the three months ended June 30, 2024, compared to a net income of $98,772 for the same period in 2023. This shift is primarily due to a decrease in interest income earned on the Trust Account (from $823,682 to $625,916) and the recognition of a $356,847 loss from the change in fair value of the Backstop Subscription Agreement derivative liability.
• Trust Account Reduction: Significant redemptions occurred in late 2023 and early 2024. Approximately $24.5 million was withdrawn from the Trust Account in January 2024 to pay shareholders who redeemed shares during the December 2023 special meeting. Consequently, the Trust Account balance decreased from $71.4 million (Dec 31, 2023) to $48.9 million (June 30, 2024).
• Derivative Liability: A new derivative liability of $356,847 was recorded as of June 30, 2024, related to the Backstop Subscription Agreement entered into in April 2024. This liability did not exist in the prior year.
• Excise Tax Liability: The Company recorded a $2,523,150 excise tax liability related to share redemptions in 2023, which remains outstanding as of June 30, 2024.

Outlook, Risks, and Management Commentary

• Business Combination Status: The Company is pursuing a merger with Blaize, Inc. The Merger Agreement was amended in April 2024 to increase the Base Purchase Price to $767 million. A Backstop Subscription Agreement was signed with the Sponsor to ensure a minimum of $30 million in cash at closing.
• Liquidity and Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern for at least one year from the filing date. The Company has minimal unrestricted cash ($26,944) and relies on advances from the Sponsor ($1,059,551) and a convertible promissory note ($1,500,000) to fund operations. Additional financing may be required to complete the business combination.
• Extension of Deadline: The Company has extended its liquidation deadline to December 15, 2024, with the ability to extend further in one-month increments by depositing funds into the Trust Account. The Sponsor has been making monthly deposits to extend the deadline through August 15, 2024.
• Internal Controls: The Company disclosed that its disclosure controls and procedures were not effective as of June 30, 2024. Material weaknesses were identified regarding the withdrawal of funds from the Trust Account and the accounting for common stock subject to redemption.
• Regulatory Risks: The Company received a Nasdaq notification regarding a delay in filing its 10-Q but has since submitted a plan to regain compliance. There is also a risk regarding the payment of the $2.5 million excise tax liability, which is due by October 31, 2024.

Investor Verification Checklist

• Going Concern Status: Verify the Company's ability to secure additional working capital to fund operations until the merger closes, given the substantial doubt expressed by management.
• Merger Closing Conditions: Monitor the status of the Form S-4 registration statement and shareholder approvals required to close the Blaize merger.
• Excise Tax Payment: Confirm how the Company intends to fund the $2,523,150 excise tax liability due in October 2024, as failure to pay may result in penalties.
• Internal Control Remediation: Review subsequent filings to determine if the material weaknesses in internal controls over financial reporting have been remediated.
• Redemption Activity: Assess the potential for further share redemptions prior to the merger, which could impact the cash available for the transaction.