Burtech Acquisition Corp.(BRKHU) - 2025 Q4 - Annual Report

Revenue and Sales - Total revenue for the year ended December 31, 2025, increased to $38.6 million, up from $1.6 million in 2024, primarily driven by hardware sales [262]. - Revenue from China accounted for $35.2 million, representing 91.1% of total revenue for 2025, while revenue from the United States was $3.3 million [263]. - A strategic partnership with Starshine Computing Power Technology Limited aims to generate a minimum of $120 million in revenue over 18 months, with an initial purchase order of $10.4 million received [254]. Expenses - Cost of revenue increased by $31.9 million to $32.4 million in 2025, compared to $0.6 million in 2024, mainly due to hardware purchases from third-party vendors [274]. - Research and development (R&D) expenses rose by $17.4 million, or 69.5%, to $42.5 million in 2025, driven by higher stock-based compensation and acquisition of third-party intellectual property [275]. - Selling, general and administrative (SG&A) expenses increased by $31.3 million, or 140.7%, to $53.5 million in 2025, largely due to stock-based compensation expenses [277]. Financial Performance - The net loss for the year ended December 31, 2025, was $206.9 million, an increase of 238.1% compared to a net loss of $61.2 million in 2024 [284]. - EBITDA for 2025 was $(207.2) million, reflecting a decrease of 228.1% from $(63.2) million in 2024 [284]. - Adjusted EBITDA for 2025 was $(50.5) million, which is an 18.2% decline from $(42.7) million in 2024 [284]. - Total other expense, net, for the year ended December 31, 2025, was $(102.8) million, compared to $(14.5) million in 2024, reflecting significant changes in fair value of convertible notes and warrants [278]. Cash Flow and Financing - Cash used in operating activities increased to $73.8 million in 2025 from $53.5 million in 2024, primarily due to a $145.7 million increase in net loss [298]. - Net cash provided by financing activities in 2025 was $70.1 million, including $33.2 million from the Committed Equity Facility [300]. - The company completed a private placement resulting in gross proceeds of approximately $30 million from the sale of 9,375,000 shares at $3.20 per share [255]. - The company issued a total of 8,493,674 shares under the Committed Equity Facility for net proceeds of $33.2 million during 2025 [292]. - As of December 31, 2025, the company had cash and cash equivalents of $45.8 million and approximately $16.6 million available to draw on the Committed Equity Facility [304]. Going Concern and Compliance - The company raised substantial doubt about its ability to continue as a going concern due to ongoing cash requirements exceeding available financing [286]. - The company is classified as an emerging growth company (EGC) under the JOBS Act, allowing it to delay compliance with new accounting standards until it no longer qualifies as an EGC or opts out of the transition period [305]. - The company has elected to utilize smaller reporting company (SRC) status, as its annual revenues are less than $100 million and public float is below $700 million [308]. - The company is currently a non-accelerated filer, which means it is not required to provide an auditor's attestation report on internal controls over financial reporting [309]. - The company’s total annual gross revenue must reach at least $1.235 billion or have a public float of at least $700 million to lose EGC status [307]. Accounting and Valuation - Revenue recognition follows ASC 606, requiring significant estimates and assumptions regarding contracts with customers and performance obligations [317]. - The company’s customer base is highly concentrated, which increases the uncertainty in estimating expected credit losses on trade receivables [322]. - The net realizable value (NRV) of inventory is determined using the first-in, first-out method, and management regularly reviews inventory against forecasted demand [325]. - The company evaluates complex financial instruments to determine their classification as liabilities or equity, which involves significant judgment [329]. - The fair value of financial instruments, including earnout shares and stock options, is determined using models such as Monte Carlo simulation and Black-Scholes [333]. - The company is not required to provide quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company [340]. Business Development - The company initiated 25 proof-of-concept projects with potential customers as of December 31, 2025 [257]. - The company confirmed 20 design wins with partners or customers as of December 31, 2025 [259].