References in this report (this "Quarterly Report") to "we," "us" or the
"Company" refer to BurTech Acquisition Corp. References to our "management" or
our "management team" refer to our officers and directors, and references to the
"Sponsor" refer to BurTech LP, LLC The following discussion and analysis of the
Company's financial condition and results of operations should be read in
conjunction with the unaudited condensed financial statements and the notes
thereto contained elsewhere in this Quarterly Report. Certain information
contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "forward-looking statements" that are not
historical facts and involve risks and uncertainties that could cause actual
results to differ materially from those expected and projected. All statements,
other than statements of historical fact included in this Quarterly Report
including, without limitation, statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" regarding the
Company's financial position, business strategy and the plans and objectives of
management for future operations, are forward-looking statements. Words such as
"expect," "believe," "anticipate," "intend," "estimate," "seek" and variations
and similar words and expressions are intended to identify such forward-looking
statements. Such forward-looking statements relate to future events or future
performance, but reflect management's current beliefs, based on information
currently available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and results
discussed in the forward-looking statements. For information identifying
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements, please refer to the Risk
Factors section of the Company's final prospectus for its Initial Public
Offering (as defined below) filed with the U.S. Securities and Exchange
Commission (the "SEC"). The Company's filings with the SEC can be accessed on
the EDGAR section of the SEC's website at www.sec.gov. Except as expressly
required by applicable securities law, the Company disclaims any intention or
obligation to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise.
Overview
We are a blank check company incorporated in Delaware on March 2, 2021, for the
purpose of effecting a merger, capital stock exchange, asset acquisition, stock
purchase, reorganization or similar business combination with one or more
businesses. We are an emerging growth company and, as such, we are subject to
all of the risks associated with emerging growth companies.
On December 15, 2021, we completed the IPO of 28,750,000 units, including
3,750,000 units from the full exercise of the overallotment option by the
underwriters, at $10.00 per unit (the "Units"). Each Unit consists of one Class
A common stock and one redeemable warrant (the "Public Warrants"). Each whole
warrant entitles the holder to purchase one Class A common stock at a price of
$11.50 per share. Simultaneously with the consummation of the IPO, we
consummated the private placement of 898,250 units (the "Private Placement
Units") to our sponsor, including 93,750 units from the full exercise of the
overallotment option by the underwriters, at a price of $10.00 per units,
generate an aggregate of $8,982,500 proceeds.
We will have only 15 months from the closing of the IPO (the "Combination
Period") to complete the initial Business Combination. If we are unable to
complete the initial business combination within the Combination Period (and the
stockholders have not approved an amendment to our charter extending this time
period), we will: (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the public shares, at a per-share price, payable in cash,
equal to the aggregate amount then on deposit in the Trust Account including
interest earned on the funds held in the Trust Account and not previously
released to us to pay its taxes (less up to $100,000 of interest to pay
dissolution expenses), divided by the number of then outstanding public shares,
which redemption will completely extinguish public stockholders' rights as
stockholders (including the right to receive further liquidating distributions,
if any), subject to applicable law, and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining stockholders
and our board of directors, dissolve and liquidate, subject in the case of
clauses (ii) and (iii) above to our obligations under Delaware law to provide
for claims of creditors and the requirements of other applicable law. There will
be no redemption rights or liquidating distributions with respect to the
warrants, which will expire worthless if we fail to complete the initial
business combination within the Combination Period.
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Results of Operations
Our entire activity since inception up to March 31, 2022 was in preparation for
our initial public offering. We will not generate any operating revenues until
the closing and completion of our initial business combination, at the earliest.
For the three months ended March 31, 2022, we had a net loss of $96,922, which
consisted of $126,308 in formation and operating costs offset by $27 in interest
income from the operating bank account and interest income of $29,386 from
marketable securities held in our Trust Account.
Liquidity and Capital Resources
As of March 31, 2022 and December 31, 2021, the Company had approximately
$927,449 and $1,539,548 in its operating bank account, respectively, and working
capital of approximately $959,828 and $1,166,024, respectively.
Prior to the IPO, our liquidity needs up had been satisfied through a payment
from our sponsor of $25,000 for the Founder Shares to cover certain offering
costs and the loan under an unsecured promissory note from the Sponsor of
$144,746. The Company's sponsor has agreed to provide financial support
including Working Capital Loans up to $1,500,000 to enable the Company to
continue its operations and meet its potential obligations over a period of one
year from the issuance of these financial statements. As of March 31, 2022,
there were no amounts outstanding under any Working Capital Loans.
Transaction costs associated with our IPO totaled $16,919,619, consisting of
$2,875,000 of underwriting fees, $10,062,500 of deferred underwriting fees,
$3,456,652 fair value of the Class A common stock issued to the underwriters and
$525,467 of other offering costs.
The Sponsors agreed to loan the Company up to $300,000 to be used for a portion
of the expenses of the IPO. These loans are non- interest bearing, unsecured and
due on demand. As of March 31, 2022 and December 31, 2021, the Company had total
of borrowings of $88,746 and $144,746 under the promissory note, respectively.
As of the Initial Public Offering date, December 15, 2021, the Company no longer
has the ability to utilize the Promissory note.
We intend to use substantially all of the funds held in the Trust Account,
including any amounts representing interest earned on the Trust Account (less
income taxes payable), to complete our Business Combination. To the extent that
our capital stock or debt is used, in whole or in part, as consideration to
complete our Business Combination, the remaining proceeds held in the Trust
Account will be used as working capital to finance the operations of the target
business or businesses, make other acquisitions and pursue our growth
strategies.
Based on the foregoing, management believes that the Company has sufficient
working capital, borrowing capacity and support from its Sponsor to meet its
needs over a period of one year from the issuance of these financial statements.
Over this time period, the Company will be using these funds for paying existing
accounts payable, identifying and evaluating prospective initial Business
Combination candidates, performing due diligence on prospective target
businesses, paying for travel expenditures, selecting the target business to
merge with or acquire, and structuring, negotiating and consummating the
Business Combination.
Critical Accounting Policies
The preparation of the unaudited condensed financial statements in conformity
with U.S. GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the unaudited condensed financial
statements and the reported amounts of expenses during the reporting period.
Actual results could differ from those estimates. We have identified the
following as our critical accounting policies:
Common Stock Subject to Possible Redemption
We account for our common stock subject to possible redemption in accordance
with the guidance in ASC Topic 480 "Distinguishing Liabilities from Equity."
Common stock subject to mandatory redemption (if any) is classified as a
liability instrument and measured at fair value. Conditionally redeemable common
stock (including common stock that feature redemption rights that are either
within the control of the holder or subject to redemption upon the occurrence of
uncertain events not solely within our control) are classified as
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temporary equity. At all other times, common stock is classified as
stockholders' equity. Our Class A common stock feature certain redemption rights
that are considered to be outside of our control and subject to the occurrence
of uncertain future events. Accordingly, as of March 31, 2022, 28,750,000 Class
A common stock subject to possible redemption are presented at redemption value
as temporary equity, outside of the stockholders' equity section of our balance
sheet.
We recognize changes in redemption value immediately as they occur and adjusts
the carrying value of redeemable common stock to equal the redemption value at
the end of each reporting period. Increases or decreases in the carrying amount
of redeemable common stock are affected by charges against additional paid in
capital and accumulated deficit.
Net Loss Per Common Stock
We have two classes of shares, which are referred to as Class A common stock and
Class B common stock. Earnings and losses are shared pro rata between the two
classes of shares. The 29,648,250 potential common stocks for outstanding
warrants to purchase our shares were excluded from diluted earnings per share
for the three months ended March 31, 2022 because the warrants are contingently
exercisable, and the contingencies have not yet been met and its inclusion would
be anti-dilutive. As a result, diluted net loss per common stock is the same as
basic net loss per common stock for the periods.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities, which would be considered
off-balance sheet arrangements as of March 31, 2022 and December 31, 2021. We do
not participate in transactions that create relationships with unconsolidated
entities or financial partnerships, often referred to as variable interest
entities, which would have been established for the purpose of facilitating
off-balance sheet arrangements. We have not entered into any off-balance sheet
financing arrangements, established any special purpose entities, guaranteed any
debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay an
affiliate of our financial advisor a monthly fee of $10,000 for office space,
utilities and administrative support. Upon completion of our Business
Combination or the Company's liquidation, we will cease paying these monthly
fees.
Recent Accounting Pronouncements
In August 2020, the FASB issued Accounting Standards Update ("ASU") No. 2020-06,
Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for
Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"),
which simplifies accounting for convertible instruments by removing major
separation models required under current U.S. GAAP. The ASU also removes certain
settlement conditions that are required for equity-linked contracts to qualify
for the derivative scope exception, and it simplifies the diluted earnings per
share calculation in certain areas. We are currently evaluating the impact of
the ASU on its financial position, results of operations or cash flows.
Our management does not believe that any other recently issued, but not yet
effective, accounting standards if currently adopted would have a material
effect on the accompanying financial statement.
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