BurTech Acquisition (BRKH) - 2025 Q2 - Quarterly Report

FORM 10-Q Filing Information Registrant Information Identifies Blaize Holdings, Inc. as the registrant, detailing incorporation state, executive offices, and listed securities - Registrant: Blaize Holdings, Inc., incorporated in Delaware, with principal executive offices in El Dorado Hills, CA[2] Securities Registered on The Nasdaq Stock Market | Title of each class | Trading symbols | Name of each exchange on which registered | | :------------------ | :-------------- | :---------------------------------------- | | Common stock, par value $0.0001 per share | BZAI | The Nasdaq Stock Market | | Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per share | BZAIW | The Nasdaq Stock Market | Securities and Filer Status Confirms SEC filing compliance and identifies filer status as Non-accelerated, Smaller reporting, and Emerging growth company - The Registrant has filed all required reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to such filing requirements for the past 90 days[3] Filer Status Classification | Filer Status | | | :---------------------- | :--- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | - As of August 6, 2025, the registrant had 102,620,190 shares of common stock, $0.0001 par value per share, outstanding[4] CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Forward-Looking Statements Disclosure Advises on forward-looking statements, cautions on material differences due to risks, and disclaims obligation to update - Forward-looking statements relate to future events or performance, including business strategy, future revenues, market growth, capital requirements, product introductions, expansion plans, and funding adequacy[8] - Actual outcomes may differ materially from expectations due to known and unknown risks, trends, uncertainties, and factors beyond the company's control, including changes in business conditions, market, financial, political, and legal conditions, and risks related to the Business Combination[9][10] - The company undertakes no obligation to update or revise any forward-looking statements, except as required under applicable securities laws[10][11] PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) Presents unaudited condensed consolidated financial statements, including balance sheets, operations, equity, cash flows, and detailed financial notes Condensed Consolidated Balance Sheets Total assets decreased from $80.5 million to $53.8 million, while total liabilities significantly decreased from $191.0 million to $58.6 million due to conversions Condensed Consolidated Balance Sheets (Amounts in thousands) | (Amounts in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :--------------------- | :------------------ | :---------------------- | | Cash and cash equivalents | $28,588 | $50,237 | | Total current assets | $47,413 | $73,690 | | Total assets | $53,828 | $80,516 | | Total current liabilities | $39,612 | $188,143 | | Total liabilities | $58,638 | $190,979 | | Total stockholders' deficit | $(4,810) | $(110,463) | - A significant decrease in total liabilities is observed, primarily due to the conversion of warrant liabilities ($14.7 million to $0) and convertible notes ($148.6 million to $0) into common stock[15] Condensed Consolidated Statements of Operations Total revenue substantially increased, but operating and other expenses also rose significantly, resulting in a higher net loss driven by fair value changes and merger costs Condensed Consolidated Statements of Operations (Amounts in thousands) | (Amounts in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $1,982 | $223 | $2,989 | $772 | | Total operating expenses | $23,865 | $11,358 | $62,893 | $20,044 | | Loss from operations | $(21,883) | $(11,135) | $(59,904) | $(19,272) | | Total other expense, net | $(7,667) | $(887) | $(117,245) | $(9,331) | | Net loss | $(29,589) | $(12,153) | $(177,350) | $(28,896) | | Net loss per share - basic and diluted | $(0.28) | $(0.89) | $(1.80) | $(2.12) | - Net loss significantly increased for the six months ended June 30, 2025, to $177.4 million, primarily due to a $165.7 million change in fair value of convertible notes and $60.3 million change in fair value of warrant liabilities, partially offset by a $109.3 million income from change in fair value of earnout share liabilities[17] Condensed Consolidated Statements of Stockholders' Equity (Deficit) Accumulated deficit significantly reduced from $(110.5) million to $(4.8) million, primarily due to convertible notes and warrant conversions into common stock Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Amounts in thousands) | (Amounts in thousands) | As of December 31, 2024 | As of June 30, 2025 | | :--------------------- | :---------------------- | :------------------ | | Common stock | $5 | $10 | | Additional paid-in capital | $318,783 | $610,335 | | Accumulated deficit | $(429,251) | $(606,601) | | Total stockholders' deficit | $(110,463) | $(4,810) | - The conversion of convertible notes added $314.3 million to additional paid-in capital, and net exercise of warrants added $75.1 million, significantly impacting the equity structure[19] - The company recorded a net loss of $(177.4) million for the six months ended June 30, 2025, which increased the accumulated deficit[19] Condensed Consolidated Statements of Cash Flows Net cash, cash equivalents, and restricted cash decreased by $21.6 million, a shift from a $84.2 million increase, due to higher operating cash use and lower financing cash Condensed Consolidated Statements of Cash Flows (Amounts in thousands) | (Amounts in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(32,373) | $(21,626) | | Net cash used in investing activities | $(681) | $(81) | | Net cash provided by financing activities | $11,428 | $105,858 | | Net change in cash, cash equivalents and restricted cash | $(21,626) | $84,151 | | Cash, cash equivalents and restricted cash at end of period | $28,862 | $87,364 | - Cash used in operating activities increased to $32.4 million in 2025 from $21.6 million in 2024, driven by a higher net loss[24] - Net cash provided by financing activities decreased significantly from $105.9 million in 2024 (primarily from convertible notes) to $11.4 million in 2025 (primarily from Merger and PIPE financing, net of transaction costs)[24] Notes to the Condensed Consolidated Financial Statements Provides detailed explanations of financial statements, covering organization, accounting policies, merger impact, revenue, fair value, and other critical aspects Note 1. Organization and Description of Business Blaize develops AI edge computing solutions, completed a reverse recapitalization merger, and faces substantial doubt about its ability to continue as a going concern - Blaize specializes in AI edge computing hardware and software, focusing on smart vision and AI applications for automotive, retail, security, and industrial markets[26] - The company consummated a reverse recapitalization merger with BurTech Acquisition Corp. on January 13, 2025, with Blaize, Inc. treated as the acquirer for financial reporting purposes[29][31] - Blaize is an emerging growth company and has elected to use the extended transition period for complying with new or revised accounting standards[33][34] - The company's liquidity condition raises substantial doubt about its ability to continue as a going concern, having incurred recurring losses and negative cash flows, with a net loss of $177.4 million for the six months ended June 30, 2025[36][38] Note 2. Summary of Significant Accounting Policies Details significant accounting policies, including going concern basis, revenue recognition, warrant classification, and single segment reporting - The financial statements are prepared on a going concern basis, but management has determined that the company's liquidity condition raises substantial doubt about its ability to continue as a going concern[35][38] - Revenue is recognized under ASC 606, with hardware revenue recognized at a point in time upon shipment, and licensing/engineering services revenue recognized over time[61][66][69] - The company accounts for warrants as either equity-classified or liability-classified based on specific terms and authoritative guidance, with changes in fair value of liability-classified warrants recorded in earnings[59][60] - The company operates in one reporting segment, with the CEO reviewing consolidated financial information for decision-making[88] Note 3. Merger and Reverse Recapitalization Details the January 13, 2025 merger and reverse recapitalization, covering conversions of preferred stock, notes, warrants, PIPE issuance, and earnout shares - The Merger was consummated on January 13, 2025, and accounted for as a reverse recapitalization, with Legacy Blaize treated as the accounting acquirer[29][31][94] - All outstanding convertible notes, redeemable convertible preferred stock, and warrants were converted into common stock immediately prior to the merger closing[96] - Legacy Blaize shareholders and equity award holders are entitled to receive up to 15,000,000 Earnout Shares in four tranches, contingent on common stock price reaching specified thresholds ($12.50, $15.00, $17.50, $20.00) within a five-year earnout period[53][104][109] Common Stock Outstanding Immediately After Merger | Category | Shares | | :------------------------------------------ | :------------- | | BurTech Class A common stock, outstanding prior to the Merger | 10,816,995 | | PIPE shares | 1,529,500 | | Legacy Blaize shares | 87,314,968 | | Common Stock immediately after the Merger | 98,818,874 | Note 4. Revenue Disaggregates revenue by region and recognition method, showing significant increase to $3.0 million, with North America and Asia Pacific as key contributors Total Revenue by Geographical Region (Amounts in thousands) | Region | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------- | :------------------------------- | :----------------------------- | | North America | $1,974 (100%) | $1,974 (66%) | | Asia Pacific | $6 (0%) | $966 (32%) | | Others | $2 (0%) | $49 (2%) | | Total revenue | $1,982 | $2,989 | Revenue by Recognition Method (Amounts in thousands) | Method | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------- | :------------------------------- | :----------------------------- | | Revenue recognized at a point in time | $1,982 | $2,989 | | Revenue recognized over time | $0 | $0 | | Total revenue | $1,982 | $2,989 | - For the six months ended June 30, 2025, total revenue increased by 287% to $2,989 thousand compared to $772 thousand in the prior year, primarily driven by hardware and software sales[221] Note 5. Fair Value Measurements Details fair value measurements of financial assets and liabilities, categorized into Level 1 and Level 3, showing significant post-merger changes Financial Assets and Liabilities Measured at Fair Value (Amounts in thousands) | Category | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------- | :------------------ | :---------------------- | | Assets: | | | | Mutual funds (Level 1) | $23,310 | $5,067 | | U.S. Government money market funds (Level 1) | $40 | $9,247 | | U.S. Government treasury securities (Level 1) | $0 | $30,580 | | Liabilities: | | | | Unissued common stock liability (Level 1) | $2,340 | $0 | | Earnout share liabilities (Level 3) | $16,764 | $0 | | 2023 convertible notes (Level 3) | $0 | $132,687 | | Pay-to-Play convertible notes (Level 3) | $0 | $15,942 | | Warrant liabilities (Level 3) | $0 | $14,711 | - Upon the consummation of the Merger, all outstanding convertible notes and warrant liabilities were converted into shares of common stock, resulting in their fair value decreasing to zero as of June 30, 2025[113][115] - Earnout share liabilities, classified as Level 3, were issued with an initial value of $126.0 million and had a fair value of $16.8 million as of June 30, 2025, reflecting a change in estimated fair value of $(109.3) million for the six months ended June 30, 2025[113] Note 6. Inventories Inventories, comprising raw materials, work in process, and finished goods, decreased slightly from $8.6 million to $8.2 million Inventories (Amounts in thousands) | Category | As of June 30, 2025 | As of December 31, 2024 | | :--------------- | :------------------ | :---------------------- | | Raw materials | $7,270 | $7,410 | | Work in progress | $776 | $1,064 | | Finished goods | $188 | $87 | | Total inventories | $8,234 | $8,561 | Note 7. Income Taxes Recorded income tax provisions of $39 thousand and $0.2 million with effective rates of (0.1)%, influenced by valuation allowance, and evaluating OBBBA impact Provision for Income Taxes (Amounts in thousands) | Period | Provision for Income Taxes | Effective Tax Rate | | :----------------------------- | :------------------------- | :----------------- | | Three Months Ended June 30, 2025 | $39 | (0.1)% | | Six Months Ended June 30, 2025 | $201 | (0.1)% | | Three Months Ended June 30, 2024 | $131 | (1.1)% | | Six Months Ended June 30, 2024 | $293 | (1.0)% | - The effective income tax rates are primarily influenced by the valuation allowance, which is driven by deferred tax assets from capitalized research and experimental expenditures and net operating losses[118] - The company is evaluating the impact of the One Big Beautiful Bill Act (OBBBA), signed on July 4, 2025, which makes permanent key elements of the Tax Cuts and Jobs Act[119] Note 8. Convertible Notes and Demand Notes Details convertible notes (P2P and 2023) fully converted into common stock upon merger, and outstanding Working Capital Loan and Related Party Advances - Both P2P Notes and 2023 Convertible Notes were fully converted into common stock upon the consummation of the Merger on January 13, 2025[121][125][132] - The company had an outstanding Working Capital Loan of $1.5 million and Advances from Related Party of $2.9 million as of June 30, 2025[133][134] - The 2023 Convertible Notes included $110.7 million in additional proceeds received during 2024, with a significant portion from a third-party group of investors (RT Parties)[127][129] Note 9. Warrants Describes warrant liabilities, including Legacy Blaize Warrants converted to common stock, post-merger equity-classified warrants, and new advisor warrants - Legacy Blaize Warrant Liabilities, previously classified as liabilities, were converted into common stock upon the Merger[136][140] - Post-Merger, BurTech's 28,750,000 public warrants and 898,250 private warrants became equity-classified warrants of Blaize, each exercisable at $11.50 per share[141][142] - In February 2025, the company issued 50,000 common stock warrants to advisors as compensation, fair valued at $3.34 per share using the Black-Scholes model[144][145] Note 10. Leases Operating lease obligations for facilities expire between 2026-2029, with total lease costs of $0.4 million for the six months ended June 30, 2025 - The company's operating leases for facilities expire between fiscal years 2026 and 2029[146] Total Lease Costs (Amounts in thousands) | Period | 2025 | 2024 | | :----------------------------- | :--- | :--- | | Three Months Ended June 30, | $211 | $150 | | Six Months Ended June 30, | $416 | $364 | - As of June 30, 2025, the weighted average remaining lease term for operating leases was 3.0 years, and the weighted average discount rate was 10.0%[150] Note 11. Redeemable Convertible Preferred Stock Prior to the Merger Prior to the Merger, various series of redeemable convertible preferred stock were classified as mezzanine equity and subsequently converted into common stock - Prior to the Merger, the company had multiple series of 'Shadow Preferred' stock, classified as mezzanine equity due to redemption options[152][55] - All redeemable convertible preferred stock outstanding at the time of the Merger was converted into shares of common stock[153][56] Note 12. Common Stock As of June 30, 2025, 600 million common shares authorized, 98.9 million issued and outstanding, with additional shares reserved for issuance Common Stock Authorized and Outstanding | Metric | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------- | :------------------ | :---------------------- | | Shares authorized | 600,000,000 | 136,562,809 | | Shares issued and outstanding | 98,881,933 | 48,376,052 | Common Stock Reserved for Issuance | Category | As of June 30, 2025 | | :-------------------------------- | :------------------ | | Public warrants | 28,750,000 | | Private warrants | 898,250 | | Common stock warrants | 50,000 | | Earnout shares | 17,600,000 | | Incentive stock options and restricted stock units | 39,959,756 | | Equity awards available for future issuance | 25,199,024 | | Total common stock reserved for issuance | 113,226,261 | Note 13. Stock-Based Compensation Stock-based compensation expense significantly increased to $18.6 million, driven by RSU vesting and grants under the new 2025 Incentive Award Plan Stock-Based Compensation Expense (Amounts in thousands) | Period | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | :----------------------------- | | Research and development | $3,196 | $9,171 | | Selling, general and administrative | $4,370 | $9,435 | | Total | $7,566 | $18,606 | - The 2025 Incentive Award Plan was adopted in January 2025, replacing the historical 2011 plan, with approximately 30.5 million shares authorized for issuance[158] - Upon the Merger, $3.9 million in stock-based compensation expense was recognized for the vesting of outstanding RSUs[168] - As of June 30, 2025, there was $16.2 million of unrecognized compensation cost for stock options (expected over 2.1 years) and $22.2 million for RSUs (expected over 3.0 years)[166][169] Note 14. Commitments and Contingencies Had $2.0 million in inventory purchase commitments and recorded $4.95 million in estimated liabilities for a Jefferies lawsuit seeking $4.5 million in merger fees - As of June 30, 2025, the company had $2.0 million in outstanding purchase orders and contractual obligations for inventory[172] - The company has recorded estimated liabilities of $4.95 million as of June 30, 2025, related to a lawsuit filed by Jefferies for advisory fees and expense reimbursement in connection with the Merger[176] - The company entered into various advisor agreements in late 2024 and April 2024, with compensation in restricted stock units or common stock, some subject to lock-up provisions and performance-based adjustments[177][178][179] Note 15. Related Party Transactions and Balances Entered a Sales Partner Referral Agreement with Burkhan LLC, targeting $56.5 million in product purchases from BST, and recognized $1.6 million in related party revenue - On June 30, 2025, Blaize entered into a Sales Partner Referral Agreement with Burkhan LLC, an affiliate, for promoting products and referring customers[180] - Under the Referral Agreement, BST, an affiliate of Burkhan, will purchase up to $56.5 million of products through 2026[181] Related Party Revenue and Accounts Receivable (Amounts in thousands) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | As of June 30, 2025 | | :-------------------------------- | :------------------------------- | :----------------------------- | :------------------ | | Revenue from affiliate of Burkhan | $1,600 | $1,600 | N/A | | Accounts receivable from affiliate of Burkhan | N/A | N/A | $1,800 | - Convertible notes and warrants held by related party investors were converted into common stock upon the Merger[184][185][186] Note 16. Segment Reporting Operates as a single reportable segment, with the CEO reviewing consolidated financial results including revenue, costs, net loss, and Adjusted EBITDA - The company operates as a single reportable segment, with financial performance evaluated on a consolidated basis[189] Net Loss Components (Amounts in thousands) | Category | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | :----------------------------- | | Revenue | $1,982 | $2,989 | | Cost of revenue | $(804) | $(1,131) | | Employee costs | $(15,242) | $(34,323) | | Technology costs | $(1,276) | $(3,693) | | Depreciation and amortization | $(456) | $(647) | | Interest income/(expense), net | $314 | $713 | | Fair value changes and financing charges | $(7,557) | $(117,087) | | Other segment items | $(6,550) | $(24,171) | | Net loss | $(29,589) | $(177,350) | Adjusted EBITDA Reconciliation (Amounts in thousands) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | :----------------------------- | | Net loss | $(29,589) | $(177,350) | | EBITDA | $(29,408) | $(177,215) | | Stock-based compensation | $7,566 | $18,606 | | Fair value changes and financing charges | $7,557 | $117,087 | | Adjusted EBITDA | $(12,933) | $(28,313) | Note 17. Net Loss Per Share Basic and diluted net loss per share was $(1.80), with 98.4 million weighted average shares outstanding, excluding anti-dilutive securities Net Loss Per Share (Amounts in thousands, except share and per share amounts) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------------------- | :------------------------------- | :----------------------------- | | Net loss | $(29,589) | $(177,350) | | Weighted average number of shares outstanding, basic and diluted | 104,588,373 | 98,374,632 | | Net loss per share, basic and diluted | $(0.28) | $(1.80) | - Potentially dilutive securities, totaling 66.8 million shares for the six months ended June 30, 2025, were excluded from diluted EPS calculation due to their anti-dilutive effect[194] - Net loss per share calculations for periods prior to the Merger were retrospectively adjusted to reflect the reverse recapitalization[193] Note 18. Employee Benefit Plan Provides 401(k) and pension plans for US and UK employees, with $0.3 million in contributions, and a long-term defined benefits plan for Indian employees - The company contributed $0.3 million to employee benefit plans (401(k) in US, pension scheme in UK) for the six months ended June 30, 2025[195] - A long-term defined benefits plan is provided for employees in India, with the liability determined by actuarial valuation[196] Note 19. Subsequent Events Subsequent events include receiving $0.5 million from escrow, a $50 million Committed Equity Facility, and a Strategic Partnership targeting $120 million in Asia Pacific revenue - On July 10, 2025, the company received $0.5 million in funds previously held in escrow[197] - On July 14, 2025, Blaize entered into a Common Stock Purchase Agreement with B. Riley Principal Capital II, LLC, providing the right to sell up to $50 million of common stock[198] - On July 16, 2025, a Strategic Cooperation Agreement with Starshine Computing Power Technology Limited was signed, targeting a minimum of $120 million in revenue over the first 18 months in the Asia Pacific region[199] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion of financial condition and results, covering AI edge computing, strategic developments, key metrics, revenue/expense analysis, non-GAAP measures, liquidity, and going concern Overview Blaize provides purpose-built, transformative AI-enabled edge computing solutions, integrating software and silicon for optimized AI processing - Blaize provides AI-enabled edge computing solutions, combining software and silicon for optimized AI processing at the network's edge and in data centers[201] - The company's solutions deliver real-time insights with low power consumption, high efficiency, minimal size, and low cost, targeting automotive, retail, security, and industrial markets[201][202] Recent Developments Includes a strategic partnership targeting $120 million in Asia Pacific revenue, a $50 million Committed Equity Facility, and a Sales Partner Referral Agreement with $56.5 million in product purchases - Strategic partnership with Starshine Computing Power Technology Limited (Hong Kong) to develop business opportunities in the Asia Pacific region, with a minimum revenue target of $120 million over the first 18 months[204] - Entered into a Common Stock Purchase Agreement with B. Riley Principal Capital II, LLC, providing the right to sell up to $50 million of newly issued common stock for strategic initiatives[205] - Signed a Sales Partner Referral Agreement with Burkhan LLC, an affiliate, which includes an initial customer, BST, committing to purchase up to $56.5 million of products through 2026[206][209] Key Business Metrics Tracks Proof of Concept (POCs), Partners, and Design Wins, with 49 POCs, 36 Partners, and 25 Design Wins as of June 30, 2025 - As of June 30, 2025, Blaize had 49 Proof of Concept (POCs) initiated or in progress with potential customers or partners[211] - The company has a total of 36 Partners (independent software/hardware vendors) integrating Blaize products and services into their offerings[212] - Blaize has achieved 25 Design Wins, indicating that a Partner or customer has selected Blaize's products/services for incorporation into their own products[213] Components of Results of Operations Defines components of operations: Revenue (services, hardware, software), Cost of Revenue, R&D, SG&A, Depreciation, and Transaction Costs - Revenue is derived from engineering services, hardware sales, and software licensing agreements[216] - Cost of revenue includes semiconductor, board, and device costs, as well as direct labor for engineering services[214] - Research and development expenses cover personnel, third-party foundry costs, computer-aided tools, software licenses, and IP licenses[215] - Selling, general and administrative expenses include personnel costs for finance, HR, IT, legal, professional fees, advertising, and other corporate expenses[217] Results of Operations Experienced significant revenue growth, but substantial increases in operating and other expenses led to a higher net loss, primarily from fair value changes Revenue Growth (Amounts in thousands) | Period | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30, | $1,982 | $223 | $1,759 | 789% | | Six Months Ended June 30, | $2,989 | $772 | $2,217 | 287% | - Revenue increase for the three months was driven by $1.4 million in hardware sales and $0.6 million in software revenue, partially offset by a $0.2 million decrease in engineering services[221] Operating Expenses (Amounts in thousands) | Expense Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Cost of revenue | $1,131 | $563 | $568 | 101% | | Research and development | $22,731 | $9,966 | $12,765 | 128% | | Selling, general and administrative | $26,349 | $8,992 | $17,357 | 193% | | Transaction costs | $12,035 | $86 | $11,949 | 13,894% | | Total operating expenses | $62,893 | $20,044 | $42,849 | 214% | - Total other expense, net, increased by $107.9 million (1,157%) for the six months ended June 30, 2025, primarily due to changes in fair value of convertible notes ($165.7 million expense) and warrant liabilities ($60.3 million expense), partially offset by income from earnout share liabilities ($109.3 million)[231][232] Non-GAAP Measures Management uses non-GAAP measures like EBITDA and Adjusted EBITDA to assess performance, with Adjusted EBITDA at $(28.3) million for the six months ended June 30, 2025 - Management uses EBITDA and Adjusted EBITDA to evaluate operating profitability and performance, excluding depreciation, amortization, and certain non-cash or irregular items[237] Adjusted EBITDA (Amounts in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net loss | $(177,350) | $(28,896) | $(148,454) | 514% | | EBITDA | $(177,215) | $(28,570) | $(148,645) | 520% | | Stock-based compensation | $18,606 | $683 | $17,923 | 2,624% | | Fair value changes and financing charges | $117,087 | $9,642 | $107,445 | 1,114% | | Adjusted EBITDA | $(28,313) | $(18,087) | $(10,226) | 57% | Liquidity and Capital Resources Faces substantial doubt about going concern due to recurring losses and negative cash flows, with $28.6 million cash and $606.6 million accumulated deficit, planning to raise capital - The company's liquidity condition raises substantial doubt about its ability to continue as a going concern through one year from the issuance date of the financial statements[245] Cash and Accumulated Deficit (Amounts in thousands) | Metric | As of June 30, 2025 | | :--------------------- | :------------------ | | Cash and cash equivalents | $28,600 | | Accumulated deficit | $(606,600) | - Net cash used in operating activities increased to $32.4 million for the six months ended June 30, 2025, from $21.6 million in the prior year[247] - Net cash provided by financing activities decreased significantly from $105.9 million in 2024 to $11.4 million in 2025, despite proceeds from the Merger and PIPE financing[249] Critical Accounting Policies and Estimates Preparation of financial statements requires significant management estimates, assumptions, and judgments, continuously evaluated, with potential for differing actual results - The preparation of condensed consolidated financial statements requires management to make estimates, assumptions, and judgments that affect reported amounts of assets, liabilities, revenues, and expenses[256] - Management evaluates estimates and assumptions on an ongoing basis, and actual results could differ significantly from these estimates[256] Recent Accounting Pronouncements Evaluating impact of ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation), effective 2025 and 2027, with no impact from ASU 2022-03 - The company adopted ASU 2022-03, Fair Value Measurement, on January 1, 2025, with no impact on the condensed consolidated financial statements[89] - Blaize is evaluating the impact of ASU 2023-09, Income Taxes (effective December 31, 2025), and ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (effective January 1, 2027)[90][92] Item 3. Quantitative and Qualitative Disclosures About Market Risk Exposed to market risks, primarily foreign currency exchange rate and credit risk, managed through contract negotiations and customer credit evaluations Foreign Currency Exchange Rate Risk Exposed to foreign currency exchange rate risk, primarily Indian rupee and British pound, mitigated by contract negotiations, with immaterial gains/losses - Blaize is exposed to foreign currency exchange rate risk, predominantly in the Indian rupee and British pound, due to international operations[262] - The company's strategy to manage foreign currency risk includes negotiating customer contracts to receive payment in the same currency used for expenses or incorporating exchange rate fluctuation provisions[261] - Foreign exchange transaction gains and losses were not material for the three and six months ended June 30, 2025 and 2024[263] Credit Risk Faces credit risk from customer nonpayment, managed by credit evaluations, with two customers (one related party) accounting for 58% and 30% of accounts receivable - The company manages accounts receivable credit risk through ongoing credit evaluation of its customers' financial conditions and maintains an allowance for credit losses[265] - As of June 30, 2025, two customers, one a related party, accounted for approximately 58% and 30% of accounts receivable, indicating significant customer concentration[266] Significant Customers by Revenue Contribution | Customer | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--------- | :------------------------------- | :----------------------------- | | Customer C | 82% | 54% | | Customer D | 15% | 10% | | Customer E | * | 32% | Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective, and previously identified material weaknesses in internal control over financial reporting have been remediated Evaluation of Disclosure Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate information reporting - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[268] - Prior to the Merger, BurTech Acquisition Corp. identified material weaknesses related to accrual of penalties and interest on excise tax payable and withdrawal of funds from the Trust Account[268][271] Remediation of Previously Identified Material Weaknesses Successfully remediated previously identified material weaknesses in internal control over financial reporting through personnel hires, new policies, enhanced processes, and system adoption - Remediation actions included hiring additional accounting and finance employees, implementing Blaize's accounting policies and internal control procedures, enhancing financial close processes, and implementing new systems and tools[269][271] - As of June 30, 2025, management concluded that the material weaknesses identified in BurTech's internal control over financial reporting have been remediated[269] Changes in Internal Control over Financial Reporting No other material changes in internal control over financial reporting occurred during the six months ended June 30, 2025, beyond remediation efforts - No other material changes in internal control over financial reporting occurred during the six months ended June 30, 2025, beyond the described remediation efforts[270] PART II. OTHER INFORMATION Item 1. Legal Proceedings Involved in a lawsuit with Jefferies LLC seeking $4.5 million in merger-related fees, with $4.95 million recorded as estimated liabilities, and no other material legal proceedings - Jefferies commenced a lawsuit against the company on April 7, 2025, seeking $4.5 million in fees and $500,000 in expense reimbursement related to the Merger[176] - The company has recorded estimated liabilities of $4.95 million as of June 30, 2025, for the Jefferies lawsuit and intends to vigorously defend it[176] - Except for the Jefferies lawsuit, the company is not currently a party to any litigation or legal proceedings that management believes would have a material adverse effect on its business[273] Item 1A. Risk Factors Updates risk factors, emphasizing dependence on key personnel, reliance on third-party manufacturers, macroeconomic conditions, and customer concentration Risks Related to our Business and Industry Key risks include personnel retention, reliance on third-party manufacturers, adverse macroeconomic conditions (inflation, tariffs), and significant customer concentration - The company's success is highly dependent on its ability to attract and retain key personnel, especially in senior management and skilled technical roles, with macroeconomic conditions like labor shortages and wage inflation posing risks[275] - As a fabless company, Blaize relies on third-party manufacturers (e.g., Samsung Foundry, Plexus) for semiconductor production, exposing it to risks of supply disruption, quality issues, and increased costs[280][281] - Macroeconomic conditions, including persistent inflation, high interest rates, and tariffs on imports from China, could increase costs, reduce demand, and adversely impact the company's financial performance[277][279][282] - A significant portion of the company's revenue and accounts receivable is concentrated among a small number of customers, creating a material adverse effect if these customers reduce purchases or fail to pay[283] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Issued 9,306 shares of common stock in a private placement on May 8, 2025, with no other unregistered sales, use of proceeds, or issuer repurchases - On May 8, 2025, the company issued 9,306 shares of common stock to Roth Capital Partners, LLC in a private placement[284] - There were no proceeds from previously registered offerings and no issuer repurchases of equity securities during the period[286][287] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported during the period - No defaults upon senior securities were reported[288] Item 4. Mine Safety Disclosures This item is not applicable to the registrant - Mine Safety Disclosures are not applicable to the registrant[289] Item 5. Other Information No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements for company securities during the quarter - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[290] Item 6. Exhibits Lists all exhibits filed with the Quarterly Report, including organizational documents, various agreements, and certifications - The exhibits include the Third Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Registration Rights Agreements, Form of Indemnification Agreement, Form of PIPE Subscription Agreement, Stockholder Lock-Up Agreement, Noteholder Lock-Up Agreement, Secured Promissory Note and Pledge Agreement, Letter Agreement, Amended and Restated Non-Employee Director Compensation Program, Form of Stock Option Grant Agreement, Common Stock Purchase Agreement, Sales Partner Referral Agreement, and various certifications[292] SIGNATURES The Quarterly Report was duly signed by the Chief Executive Officer and Chief Financial Officer on August 14, 2025 - The Quarterly Report was signed by Dinakar Munagala, Chief Executive Officer, and Harminder Sehmi, Chief Financial Officer, on August 14, 2025[296]