Common Stock and Contingently Issuable Common Stock and Preferred Stock |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share Repurchase Program [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock and Contingently Issuable Common Stock and Preferred Stock | Note 6. Common Stock and Contingently Issuable Common Stock and Preferred Stock Common stock The Company has authorized 600 million shares of common stock with a par value of $0.0001 per share. The Company has only one class of common stock authorized and issued. Holders of the Company’s common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders and there are no cumulative voting rights. The Company’s common stock has no preemptive, redemption, conversion, or subscription rights. The Company has not previously paid cash dividends on its common stock. Any future dividend payments are subject to the discretion of the Company’s board of directors (the “Board” or “Board of Directors”). On May 5, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Northland Securities, Inc., as representative of the several underwriters named therein (the “Underwriters”), relating to the May 6, 2026 issuance and sale (the “Offering”) of 18,918,918 shares (the “Base Shares”) of the Company’s common stock to the public at a price of $1.85 per share. Pursuant to the Underwriting Agreement, the Company granted the Underwriters a 30-day option to purchase up to 2,837,837 additional shares of common stock (the “Option Shares” and, together with the Base Shares, the “Shares”) at the public offering price. The net proceeds to the Company from the Offering for the Base Shares were approximately $32.8 million after deducting underwriting discounts and offering expenses paid by the Company. The Option Shares expired, unexercised. The following table sets forth the changes in shares of the Company’s common stock from December 31, 2025 through June 30, 2026:
Stockholder Rights Plan On April 22, 2026, the Company entered into a Rights Agreement (the “Rights Agreement”) with Continental Stock Transfer & Trust Company, as rights agent, which had been previously approved by the Board. In connection with the adoption of the Rights Agreement, the Board declared a dividend of one preferred stock purchase right (each, a “Right”) for each share of the Company’s common stock, par value $0.0001 per share, outstanding at the close of business on May 6, 2026 (the “Record Date”). One Right will also attach to each share of common stock issued after the Record Date and prior to the Distribution Date (as defined in the Rights Agreement). Each Right, when exercisable, entitles the registered holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), at an exercise price of $11.00 per Right, subject to adjustment. The Company has reserved 6,000,000 shares of Series A Preferred Stock for issuance upon exercise of the Rights. The Rights are not presently exercisable and trade with, and are inseparable from, the common stock. No separate rights certificates have been issued. The Rights become exercisable only if a person or group acquires beneficial ownership (including certain synthetic or derivative ownership positions) of 10% or more of the Company’s outstanding common stock (an “Acquiring Person”). In that event, each Right (other than Rights held by the Acquiring Person, which become void) will entitle its holder to purchase, at the exercise price, shares of common stock having a market value of twice the exercise price. In addition, the Board may, at its option, exchange each outstanding Right (other than Rights held by the Acquiring Person) for one share of common stock. Persons who beneficially owned 10% or more of the outstanding common stock immediately prior to the first public announcement of the Rights Agreement are not deemed Acquiring Persons unless they acquire additional shares, subject to certain exceptions. The Board may redeem the Rights, in whole but not in part, at a price of $0.01 per Right at any time prior to the time the Rights become exercisable. The Rights will expire on April 21, 2027, unless earlier redeemed or exchanged by the Company. The Rights have no dilutive effect on earnings per share until they become exercisable, and because the Rights were determined to have only nominal value at the date of declaration, the declaration and distribution of the Rights had no impact on the Company’s condensed consolidated balance sheet or condensed consolidated statement of operations and comprehensive loss as of June 30, 2026 and for the three and six months ended June 30, 2026. Currently Outstanding Warrants to Purchase Common Stock Polar warrants On November 10, 2025, the Company issued 9,375,000 freestanding warrants (the “Polar warrants”), each Polar warrant exercisable for one whole share of the Company’s common stock, in connection with its issuance of common stock to Polar. The Company determined that the Polar warrants were considered to be freestanding instruments, did not exhibit any of the characteristics in ASC 480 that would require liability classification, however, were precluded from equity classification under ASC 815, because these warrants met the definition of a derivative instrument in that they were issued for no initial investment, have the derivative characteristics of an underlying (the value and settlement based on the Company’s common stock), notional (the number of shares deliverable), and mechanism for net settlement (cashless exercise) while at the same time did not qualify for a derivative scope exception of both being indexed to the Company’s own stock and not permitting or requiring net cash settlement in a manner outside the Company’s control. In this case, the Polar warrants permit the counterparty to require net cash settlement in specified circumstances. At initial recognition, the warrants were recorded at their estimated fair value calculated using the Black-Scholes-Merton (“Black-Scholes”) option pricing model. The liability associated with these warrants is subject to fair value remeasurement at each balance sheet date using the Black-Scholes option pricing model, with changes in fair value recorded as a change in the fair value of warrant liabilities in the condensed consolidated statements of operations and comprehensive loss. The warrants will continue to be remeasured until the earlier of the exercise during the warrant term or the automatic exercise on a cashless basis at the end of the warrant term of five years, or November 10, 2030. The Polar warrants are considered long-term liabilities, due to the warrants being out-of-the-money, although they are immediately exercisable. At the earlier of the date of the warrants being unexercised but in-the-money, or one year from the date of termination with automatic cashless exercise, the Company will reclassify the liability to a short-term liability until the warrants are exercised, whether by Polar or by means of cashless exercise, at which point they will become reclassified to equity. The Polar warrants had an initial exercise price of $5.00 per share. During the quarter ended June 30, 2026, the Company amended the outstanding Polar warrants to adjust the exercise price from $5.00 per share to $3.00 per share, recognizing the difference between the fair value of the warrants immediately prior to the amendment and immediately after the amendment as a financing charge in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026. BZAI warrants Upon the consummation of the Merger, the total of 29,648,250 warrants outstanding immediately prior to the Merger became warrants to purchase the Company’s common stock (the “BZAI warrants”). The Company determined that these warrants should be accounted for as equity rather than a liability at the inception date, and thus recognized the BZAI warrants in equity as an increase in additional paid-in-capital. Each BZAI warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustments for stock splits, stock dividends, reorganizations, recapitalizations and similar corporate actions. The warrants expire on January 13, 2030, unless earlier redeemed by the Company. If the Company calls the warrants for redemption, management will have the option to require all holders that wish to exercise warrants to do so on a cashless basis. Warrants issued to an advisor In connection with the Merger, the Company issued, to an advisor, warrants to purchase 50,000 shares of common stock at $11.50 per share (the “advisor warrants”), which expire after a term of five years, on February 10, 2030. The Company deemed these warrants to be equity rather than a liability at the inception date, and thus recognized the advisor warrants in equity as an increase in additional paid-in-capital. Earnout Shares In connection with the Merger, Legacy Blaize stockholders and employee equity award holders (including holders of stock options and RSUs) are entitled to receive up to 15,000,000 shares of common stock and Burkhan has the right to receive up to 2,600,000 shares of common stock (collectively, the “Earnout Shares”). Earnout Shares issued to eligible Legacy Blaize employee equity award holders (“Employee Earnout Shares”) are considered a compensatory award and are accounted for under ASC 718 — “Share-Based Compensation” (“ASC 718”). Further, these Employee Earnout Shares have been determined to be equity classified and accordingly, are not remeasured unless an employee departs from the Company, which is considered a modification of an equity-based award. Earnout Shares issued to Burkhan and Legacy Blaize stockholders that are not within the scope of ASC 718 (the “Other Earnout Shares”), were evaluated by management under ASC 480 — “Distinguishing Liabilities from Equity” (“ASC 480”), and ASC 815. The Company determined that the Other Earnout Shares are a derivative liability and remeasures the Other Earnout Shares at each reporting date, with changes in the fair value recorded in the condensed consolidated statements of operations. Legacy Blaize stockholders, Legacy Blaize employee equity award holders, and Burkhan are entitled to Earnout Shares in four tranches upon the occurrence of four separate events (each a “Triggering Event” and collectively, the “Triggering Events”), if they occur between the Merger date and January 13, 2030. The Triggering Event thresholds are described in the Company’s Annual Report on Form 10-K. Employee Earnout Shares During the three and six months ended June 30, 2026 and 2025, the Company recorded $4.1 million and $8.0 million, and $4.1 million and $7.6 million, respectively, in stock-based compensation expense related to the Employee Earnout Shares. As of June 30, 2026, there was $57.7 million of total unrecognized compensation cost related to the Employee Earnout Shares. Other Earnout Shares The fair value of the derivative liability associated with the Other Earnout Shares is described in Note 4 — “Fair Value Measurements and Derivative Instruments”.
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