Blaize Holdings, Inc. annual report, FY2023

Business context and reporting period

This is BurTech Acquisition Corp.’s Form 10-K for the fiscal year ended December 31, 2023, filed May 7, 2024. Although the request identifies Blaize Holdings, Inc., the filing is for BurTech, a blank-check company; Blaize, Inc. is the proposed merger target. This filing does not provide Blaize’s operating financial statements or results.

BurTech signed a merger agreement with Blaize on December 22, 2023. If completed, the combined company is to be renamed Blaize Holdings, Inc. The transaction remained subject to approvals and other closing conditions as of the filing.

Financial results and position

Net income fell about 20% year over year, despite higher trust interest, as operating costs increased substantially. Earnings came from trust-account interest, not business operations; operating margins are not meaningful for this pre-combination SPAC.

At December 31, 2023, total assets were $72.594 million, including $71.432 million in trust investments (of which $24.539 million was designated for redemptions) and $843,313 in restricted cash. The balance sheet reported $41.441 million in liabilities, including $24.539 million payable to redeeming shareholders, $10.063 million in deferred underwriting commissions, $2.523 million in excise tax payable, and an $810,345 related-party convertible note. Stockholders’ deficit was $15.839 million. No long-term debt or off-balance-sheet arrangements were reported.

Material changes and transaction developments

• Stockholders redeemed approximately $252.3 million of shares during 2023: $227.8 million in March and $24.5 million in December. Trust investments fell from $295.803 million at year-end 2022 to $71.432 million at year-end 2023.
• In December, the company extended its combination deadline to December 15, 2024, through monthly extensions funded by deposits into the trust. The Sponsor made four $130,370 extension deposits between January and April 2024, extending the deadline through May 15, 2024.
• An April 22, 2024 merger-agreement amendment raised the stated base purchase price from $700 million to $767 million and incorporated Blaize financing arrangements. The amended transaction also provides a Sponsor backstop if trust cash after redemptions is below $30 million, subject to the agreement’s terms.
• The original agreement required at least $125 million of specified available cash, subject to deductions and conditions. The filing also describes a Blaize note financing of up to $125 million and states that its funding condition—at least $70 million funded by April 24, 2024—was satisfied. Confirm the actual funding and how the amended cash conditions apply at closing.
• Other April 2024 terms include the Sponsor’s conditional forfeiture of 2 million shares at closing and EF Hutton’s agreement to accept $1.5 million at closing in full satisfaction of the deferred underwriting commission.

Outlook, risks, and unusual items

• Management reported substantial doubt about BurTech’s ability to continue as a going concern, citing insufficient working capital and the approaching mandatory liquidation deadline. Completion of the Blaize transaction, required approvals, closing conditions, and additional financing were not assured. The financial statements contain no going-concern adjustments.
• The company had no operating revenues and expected to require additional funding for working capital. The Sponsor and insiders were not obligated to provide loans.
• Management identified material weaknesses in controls over Trust Account withdrawals and accounting for redeemable Class A shares. Disclosure controls were deemed ineffective at year-end; remediation was ongoing. The filing says $318,888 was improperly withdrawn from the Trust Account for operating expenses; BurTech recorded amounts due from the Sponsor and payable to the Trust, and the Sponsor committed to reimburse the Trust.
• A $2.523 million excise-tax liability was recorded for 2023 redemptions. The filing warns that additional redemptions could create tax costs and reduce cash available for a transaction.
• The auditor gave an unqualified opinion on the financial statements but included a going-concern explanatory paragraph. The auditor did not opine on internal-control effectiveness.
• Nasdaq’s minimum-holder compliance issue was reported as resolved on April 26, 2024. The filing also discusses risks involving possible investment-company status, financial-institution liquidity, redemptions, transaction execution, dilution, and liquidation; warrants would expire worthless if no business combination is completed.

Important facts for investors to verify

1. Confirm the identity and scope of the filing: it is BurTech’s SPAC 10-K, not Blaize’s operating-company annual report.
2. Review Blaize’s audited financial statements and the definitive merger materials; they are not included here.
3. Verify actual trust cash after redemptions, the amount and terms of financing funded, and satisfaction of all amended minimum-cash and backstop conditions.
4. Check the current transaction status, shareholder and regulatory approvals, Nasdaq listing conditions, and the applicable combination deadline.
5. Assess dilution from redemptions, warrants, financing securities, earnout shares, equity plans, and Sponsor-related arrangements.
6. Track repayment of the $318,888 Trust Account withdrawal, remediation of internal-control weaknesses, and treatment of excise taxes and transaction expenses.