Blaize Holdings, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Unless otherwise indicated, references to “we”, “us”, “our”, “Blaize” or the “Company” in this Management’s Discussion and Analysis of Financial Condition and Results of Operations are to Blaize Holdings, Inc. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes thereto, included in Part 1. Item 1. of this Quarterly Report, risk factors, included in Part 2. Item 1A. of this Quarterly Report, and the information included in our Current Report on Form 8-K/A, as filed with the SEC on April 15, 2025. Overview Blaize is a provider of purpose-built, transformative artificial intelligence (AI)-enabled edge computing solutions that unite software and silicon to optimize AI from the edge to the core. Blaize provides a full-stack programmable processor architecture suite and low-code/no-code software platform that enables AI processing solutions for high-performance computing at the network’s edge and in the data center. Blaize solutions deliver real-time insights and decision-making capabilities at low power consumption, high efficiency, minimal size and low cost. Our mission is to enable enterprises to harness the power of AI at the edge, delivering real-time insights and decision- making capabilities with compelling speed and efficiency. With our innovative hardware and software solutions, we believe we are at the forefront of transforming industries and unlocking new possibilities in an increasingly connected and data-driven world. Our portfolio includes highly efficient programmable AI processors in a broad range of form factors, deployable across several verticals, including enterprise, commercial, industrial, defense and automotive. Blaize’s accelerated AI computing platforms enable applications such as computer vision, advanced video analytics and AI inference. The use of industry standards ensures rapid integration into existing workflows and systems by our customers. Our unique and rich set of software tools empower non-expert practitioners to deploy existing and novel AI applications on our hardware, with ease and speed, without the need to learn or use source code. All of this is combined into integrated AI solutions which are designed to deliver real- time insights and decision-making capabilities with substantial speed and efficiency. We believe we are well positioned to empower organizations to process and analyze data in real time at the edge of the network, thereby enabling them to make informed decisions, unlock new business opportunities, and gain a competitive advantage in the rapidly evolving AI landscape. With a strong focus on innovation, performance, and partnership, we believe we will help to drive the future of AI accelerated computing at the edge. Recent Developments The Merger and Reverse Recapitalization On January 13, 2025 (the “Closing Date”), we consummated the transactions (the “Merger”) contemplated by the Agreement and Plan of Merger dated December 22, 2023 (as amended on April 22, 2024, October 24, 2024 and November 21, 2024) with BurTech Acquisition Corp (“BurTech”), BurTech Merger Sub, Inc (“Merger Sub”), Blaize, Inc. (“Legacy Blaize”), and solely for the limited purposes of the transaction, Burkhan Capital LLC (“Burkhan”), a Delaware limited liability company and affiliate of BurTech, On the Closing Date, Merger Sub merged with and into Legacy Blaize, with Legacy Blaize surviving the Business Combination as a wholly owned subsidiary of the Company. The Merger is accounted for as a reverse recapitalization, with BurTech being treated as the acquired company and Legacy Blaize was treated as the acquirer for financial reporting purposes. This accounting treatment is equivalent to Legacy Blaize issuing stock for the net assets of BurTech, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Merger are those of Legacy Blaize. For periods prior to the Merger, the reported share and per share amounts have been retroactively converted (“Retroactive Conversion”) by applying the Exchange Ratio. Legacy Blaize shareholders were issued 87,314,968 shares of common stock. Legacy Blaize Redeemable Convertible Preferred Stock, Convertible Promissory Notes and Warrants Immediately prior to the closing of the Merger, all outstanding convertible notes, inclusive of accrued and unpaid interest, each of the issued and outstanding shares of redeemable convertible preferred stock, and all outstanding warrants of Legacy Blaize were automatically converted into shares of Company common stock. Upon the consummation of the Merger, (i) each outstanding stock option to purchase Legacy Blaize common stock was converted into a stock option of the Company, upon substantially the same terms and conditions as in effect with respect to the corresponding Legacy Blaize option, and the right to receive a number of earnout shares. Additionally, each Legacy Blaize restricted stock unit (“RSU”) was converted into an RSU of the Company, upon substantially the same terms and conditions as in effect with respect to the corresponding Legacy Blaize RSU, and the right to receive a number of earnout shares. Other Arrangements entered into at time of Merger or assumed upon the consummation of the Merger: Public and Private Placement Warrants Upon the consummation of the Merger, BurTech's 28,750,000 public warrants and 898,250 private warrants, both outstanding immediately prior to the consummation of the Merger, became warrants of the Company. 30 Table of Contents Shareholder Note Receivable Upon the consummation of the Merger, BurTech LP, LLC (“BurTech LP”) issued a secured promissory note and pledge agreement (the “Shareholder Note”) to BurTech in the principal amount of $8,753,744 in exchange for 750,000 shares of Company common stock. The principal of the Shareholder Note will decrease when BurTech LP pays for transaction costs that the Company assumed from BurTech in the Merger. The Shareholder Note bears interest at 7.0%, compounding annually on December 31 of each year and is secured by 2,000,000 shares of the Company’s common stock owned by BurTech LP. Lock-up Agreement On the Closing Date, in connection with the consummation of the Business Combination and as contemplated by the Merger Agreement, we entered into lock-up agreements (the “Lock-up Agreements”) with (i) certain of Blaize’s directors and officers, (ii) certain stockholders of Blaize and (iii) Burkhan, in each case, restricting the transfer of Company common stock and any shares of Company common stock issuable upon the exercise or settlement, as applicable, of stock options or restricted stock units held immediately after the Merger. The restrictions under the Lock-up Agreements began at Closing and end on the earlier of (x) the date that is 180 days after the Closing Date, (y) the last reported sale price of Blaize common stock reaching $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing and (z) the liquidation of Blaize. Non-Redemption Agreement On December 31, 2024 and through January 13, 2025, BurTech, BurTech LP and Legacy Blaize entered into agreements (each, a “Non-Redemption Agreement” and collectively, the “Non-Redemption Agreements”) with one or more unaffiliated stockholders of BurTech (each, an “Investor”) who agreed not to redeem (or validly rescind any redemption requests on) their shares of BurTech Class A common stock, par value $0.0001 per share of the Company (“Non-Redeemed Shares”). On the Closing Date, such Class A common stock shares were exchanged for shares of the Company's common stock and placed into an escrow account. In exchange for the foregoing commitments not to redeem the Non-Redeemed Shares, the Company and BurTech LP have agreed to guarantee that each Investor receives a return of $1.50 per Non-Redeemed Share whether Investor (i) sells the Non-Redeemed Shares in the open market or (ii) exercises its option to require the Company to repurchase the Non-Redeemed Shares in accordance with the Non-Redemption Agreement. Entering into the Non-Redemption Agreement is expected to increase the amount of funds that remain in the Company’s trust account following the Merger. PIPE Subscription Agreements From December 31, 2024 and through January 13, 2025, BurTech and certain other subscribers (collectively, the “Subscribers”) entered into subscription agreements under which BurTech agreed to issue and sell to the Subscribers, immediately before the Closing Date, 1,529,500 shares of BurTech's Class A common stock, par value $0.0001 per share (“PIPE Shares”) at a purchase price of $10.00 per share for an aggregate purchase price of $15,295,000, in a private placement. Such PIPE shares that were outstanding immediately prior to the Merger became shares of Company common stock. Earnout Arrangement Legacy Blaize shareholders and outstanding equity award holders (including stock options and RSUs) are entitled to Earnout Shares in four tranches upon the occurrence of four separate Triggering Events (defined below) during the Earnout Period, which commences on January 13, 2025 and ends on January 13, 2030. The Triggering Events are driven by whether our closing share price on 20 trading days out of 30 consecutive trading days equals or exceeds defined per share thresholds in each tranche as follows: • If our common stock price is greater than or equal to $12.50 per share, 3,750,000 Earnout Shares will be issued; and • If our common stock price is greater than or equal to $15.00 per share, an additional 3,750,000 Earnout Shares will be issued; and • If our common stock price is greater than or equal to $17.50 per share, an additional 3,750,000 Earnout Shares will be issued; and • If our common stock price is greater than or equal to $20.00 per share, an additional 3,750,000 Earnout Shares will be issued Employees entitled to receive Earnout Shares with respect to options and RSUs, must provide service through the date the target is achieved and if an employee departs, the Earnout Shares are reallocated to the remaining pool of recipients who received the right to the Earnout Shares on the Closing Date. Additionally, Burkhan has the right to receive up to an aggregate amount of 2,600,000 shares of Blaize Class A Common Stock, 650,000 following the occurrence of each of the Triggering Events stated above (the “Burkhan Earnout Shares”). Key Business Metrics Pipeline We have identified a potential $458 million of future business opportunities that could significantly accelerate growth through near-term customer implementations. Although Blaize is under no contractual arrangement(s) with respect to such pipeline and there is no assurance of a future contractual arrangement, the pipeline contains target accounts and opportunities that have been identified and verified as potential customers for Blaize products and services. We classify certain key metrics related to our pipeline into the following categories: proof of concept stage, partners and design wins. 31 Table of Contents Proof of Concept Stage A proof-of-concept stage (“POC”) represents that a proposal for a proof of concept has either been initiated or is in progress with a potential customer or partner. We utilize POCs to demonstrate the Blaize technology’s significant value proposition along with its tailored use scenarios and satisfaction of customer and/or partner requirements. As of March 31, 2025, a total of 40 POCs have been initiated or are in progress with a potential customer. Partners A partner (“Partner”) consists of either an independent software vendor or independent hardware vendor with whom Blaize is working to integrate Blaize products and services into the vendor’s offerings for their customers. Such vendors may include OEMs, original design manufacturers, system integrators or hardware resellers or distributors, among others. As of March 31, 2025, Blaize has a total of 34 Partners. Design Wins A design win (“Design Win”) represents that a Partner or a customer has selected Blaize’s products and/or services to be incorporated into a product that it intends to produce or consume, as applicable, and has confirmed that Blaize’s offerings integrate into such product accordingly. As of March 31, 2025, a total of 21 Design Wins have been confirmed with a Partner or customer. Components of Results of Operations Revenue We currently derive revenue through a combination of: • Engineering services revenue, this involves providing customized design services to our customers, tailored to their specific requirements. • Hardware revenue — this encompasses the sale of our semiconductor products through various supply agreements. Cost of Revenue (exclusive of depreciation and amortization) Cost of revenue (exclusive of depreciation and amortization) is primarily comprised of the cost of semiconductors purchased from subcontractors, including wafer fabrication, assembly, testing and packaging, board and device costs as well as indirect costs such as inventory carrying costs and inventory valuation reserves. In addition, cost of revenue (exclusive of depreciation and amortization) also includes direct labor costs associated with the servicing of our engineering services revenue contracts. Research and Development Research and development expense primarily consists of personnel costs for our research and development activities. Research and development expense also includes costs associated with the design and development of our application-specific integrated circuit and intellectual property (IP) solutions, such as third-party foundry costs, third party computer-aided tools and software licenses, third party IP licenses, reference design development, and allocated costs, such as facilities and information technology costs. Selling, General and Administrative Selling, general and administrative expense primarily consists of personnel-related expenses for our finance human resources, information technology, and legal organizations. These expenses also include non- personnel costs, such as legal, audit, accounting services, advertising expenses, other professional fees as well as certain tax, corporate software licenses, and insurance-related expenses. Depreciation and Amortization Depreciation and amortization expense consists of depreciation and amortization on long-lived assets such as computer equipment, capitalized software licenses, furniture and fixtures, leasehold improvements, office equipment and vehicles. Transaction Costs Transaction costs primarily consist of direct incremental legal, consulting and banking fees primarily related to the Merger. 32 Table of Contents Results of Operations The following tables set forth Blaize’s condensed consolidated statements of operations data for the three months ended March 31, 2025 and 2024, respectively, as well as changes between periods. The period-to-period comparison of financial results is not necessarily indicative of future results. Revenue Three Months Ended March 31, Change (Amounts in thousands, except for percentages) 2025 2024 $ % Total revenue $ 1,007 $ 549 $ 458 83 % Revenue increased 83% to $1.0 million for the three months ended March 31, 2025 compared to approximately $0.5 million for the three months ended March 31, 2024. The increase was primarily due to sales of hardware product of $1.0 million, partially offset by a decrease of $0.5 million due to the end of our multi-year license and development contract with a strategic investor and the completion of a contract during the year ended December 31, 2024. The following table sets forth Blaize’s revenue by customer geographical location: Three Months Ended March 31, 2025 Three Months Ended March 31, 2024 (Amounts in thousands, except for percentages) Amount % of Revenue Amount % of Revenue Asia Pacific $ 960 95 % $ 333 61 % United States — — % 215 39 % Others 47 5 % 1 0 % Total revenue $ 1,007 100 % $ 549 100 % Costs and Expenses Three Months Ended March 31, Change (Amounts in thousands, except for percentages) 2025 2024 $ % Cost of revenue (exclusive of depreciation and amortization) $ 327 $ 306 $ 21 7 % Research and development 13,118 4,094 9,024 220 % Selling, general and administrative 13,357 3,988 9,369 235 % Depreciation and amortization 191 253 (62 ) -25 % Transaction costs 12,035 45 11,990 26,644 % Total operating expenses $ 39,028 $ 8,686 $ 30,342 349 % Cost of revenue (exclusive of depreciation and amortization) Cost of revenue (excluding depreciation and amortization) for the three months ended March 31, 2025 reflects an increase of $21,000, or 7%, compared to the three months ended March 31, 2024. This increase was primarily driven by $0.3 million related to hardware sales during the three months ended March 31, 2025, which was partially offset by a decrease of $0.2 million related to inventory carrying costs with an outside supplier. Cost of revenue for the three months ended March 31, 2025 also included a $0.6 million benefit relating to the sale of inventory whose carrying amount had been written down to below original cost in a prior period. Research and development Research and development expense for the three months ended March 31, 2025 increased $9.0 million or 220% compared to the three months ended March 31, 2024. The increase was driven by an increase in personnel costs of $6.9 million as a result of market-based salary adjustments made in the year ended December 31, 2024 which were implemented after the three months ended March 31, 2024 as well as additional stock-based compensation connected to the consummation of the Merger and an increase of $1.8 million in spending associated with our new chip development. We expect research and development to continue to increase to support the development of our next generation product portfolio in future years. Selling, general and administrative Selling, general and administrative expense for the three months ended March 31, 2025 increased $9.4 million or 235% compared to the three months ended March 31, 2024. The increase was primarily due to a $6.3 million increase in employee related costs associated with the hiring of new Company executives, market-based salary adjustments (as previously described), additional stock-based compensation connected to the consummation of the Merger and the building of our internal sales team. We also incurred additional costs such as a $1.4 million increase in professional services costs incurred in support of the requirements of being a public company and a $1.7 million increase in marketing and other sundry costs relating to activities focused on our sales pipeline. Depreciation and amortization Depreciation and amortization expense for the three months ended March 31, 2025 decreased $62,000 or 25% compared to the three months ended March 31, 2024. The decrease was primarily due to a decrease in depreciation costs for computer equipment and server and network equipment that were fully depreciated in the comparative period. Transaction costs 33 Table of Contents Transaction costs increased by $12.0 million as a direct result of the Merger. Total other expense, net Three Months Ended March 31, Change (Amounts in thousands, except for percentages) 2025 2024 $ % Loss on foreign exchange transactions $ (29 ) $ (49 ) $ 20 (41 )% Change in fair value of convertible notes (165,703 ) (4,651 ) (161,052 ) 3,463 % Change in fair value of warrant liabilities (60,345 ) (3,515 ) (56,830 ) 1,617 % Change in fair value of earnout share liabilities 116,518 — 116,518 100 % Other, net (19 ) (229 ) 210 (92 )% Total other expense, net $ (109,578 ) $ (8,444 ) $ (101,134 ) 1,198 % Total other expense, net Total other expense, net for the three months ended March 31, 2025 reflects an increase of $101.1 million, or 1,198%, compared to the three months ended March 31, 2024. Total other expense, net for the three months ended March 31, 2025 was primarily comprised of the total net change in fair value of our convertible notes and warrant liabilities of $226.0 million and the change in our earnout liabilities of $116.5 million. Total other expense, net for the three months ended March 31, 2024 was primarily comprised of the total net change in fair value of our convertible notes and warrant liabilities of $8.2 million. Income tax expense Three Months Ended March 31, Change (Amounts in thousands, except for percentages) 2025 2024 $ % Provision for income taxes $ 162 $ 162 $ — — % The provision for income taxes amounted to approximately $0.2 million for the three months ended March 31, 2025 and 2024, respectively, and our effective tax rate was approximately (0.1)% and (1.4)%, respectively. The effective income tax rate was primarily driven by the valuation allowance which is driven by the deferred tax assets arising from capitalized research and experimental expenditures and the net operating losses. Net loss Net loss was approximately $147.8 million for the three months ended March 31, 2025 compared to a net loss of approximately $16.7 million for the three months ended March 31, 2024. The increase in net loss for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was primarily attributable to the $226.0 million change in fair value of convertible notes and warrant liabilities and the increase in loss from operations of $29.9 million, partially offset by the $116.5 million change in the fair value of earnout liabilities. Liquidity and Capital Resources Blaize’s condensed consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations for the foreseeable future. Our condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. Since inception of Blaize and through March 31, 2025, we have funded our operations primarily with cash flows from contributions from founders or other investors and other financing activities. We have incurred recurring losses and negative cash flows since our inception, including a net loss of $147.8 million and $16.7 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, we had cash and cash equivalents of approximately $45.0 million, and an accumulated deficit of $577.0 million. Our ability to continue to meet our obligations, to achieve our business objectives and continue as a going concern is dependent upon several factors, including our revenue growth rate, the timing and extent of spending to support further sales and marketing initiatives as well as our research and development efforts. In order to finance these opportunities, we will need to raise additional financing. While there can be no assurances, we intend to raise such capital through issuances of additional debt financing and public or private equity offerings or other means. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, results of operations and financial condition would be materially and adversely affected. As a result of the above, in connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, we have determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through a year from the date that our unaudited condensed consolidated financial statements were available to be issued. 34 Table of Contents Cash flows for the three months ended March 31, 2025 and 2024 The following table summarizes our cash flows from operating, investing and financing activities: Three Months Ended March 31, (Amounts in thousands) 2025 2024 Net cash used in operating activities $ (15,944 ) $ (7,363 ) Net cash used in investing activities (661 ) (177 ) Net cash provided by financing activities 11,343 11,372 Change in cash, cash equivalents and restricted cash $ (5,262 ) $ 3,832 Cash flows used in operating activities Net cash used in operating activities was $15.9 million during the three months ended March 31, 2025, compared to $7.4 million for the three months ended March 31, 2024. The increase in cash used in operating activities was primarily due to an increase of $131.0 million in net loss and a decrease of $116.5 million in the fair value of our earnout share liabilities, partially offset by an increase of $217.9 million in the fair value of our convertible notes and warrant liabilities, an increase of $10.7 million in stock-based compensation, and a decrease of $8.5 million in prepaid expenses and other current assets. Cash flows used in investing activities For the three months ended March 31, 2025 and 2024, we used $ 0.7 million and $0.2 million of cash to purchase property and equipment, respectively. The increase of $0.5 million during the three months ended March 31, 2025 was primarily due to the licensing of software. Cash flows provided by financing activities For the three months ended March 31, 2025, net cash provided by financing activities was $11.3 million, which primarily consisted of $15.9 million of proceeds from the Merger and PIPE financing, partially offset by the $4.5 million payment of deferred offering costs. This compares to net cash provided by financing activities for the three months ended March 31, 2024 of $11.4 million, which primarily consisted of $11.5 million in proceeds from the issuance of secured convertible notes under the 2023 Note Purchase Agreement. Material Cash Requirements As of March 31, 2025 and December 31, 2024, we had outstanding purchase orders and contractual obligations totaling $0.3 million and $0.2 million, respectively, to procure inventory. The majority of our outstanding inventory purchase orders and preauthorized commitments to procure strategic components based on our expected demand are placed with our primary third-party contract manufacturer and a semiconductor supplier. We have an obligation to purchase inventories that have been purchased by the contract manufacturer when components have not been consumed within a period defined in the terms of our agreement. While we expect such purchased components to be used in future production of our finished goods, these components are considered in our reserve estimate for excess and obsolete inventory. Furthermore, we accrue for losses on commitments for the future purchase on non-cancelable and non- returnable components from this contract manufacturer at the time that circumstances, such as changes in demand, indicated that the value of the components many not be recoverable, the loss is probable and management has the ability to reasonably estimate the amount of the loss. As of March 31, 2025 and December 31, 2024, the liability balance of our accrued loss on accrued purchase commitments equaled $0.6 million. Off Balance Sheet Arrangements As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with Blaize is a party, under which it has any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets. Currently we do not engage in off-balance sheet financing arrangements. Emerging Growth Company and Smaller Reporting Company Status Blaize is an emerging growth company (“EGC”) as defined in the JOBS Act. The JOBS Act permits companies with EGC status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they apply to private companies. We have elected to use this extended transition period to enable it to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates. 35 Table of Contents In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an EGC, we intend to rely on such exemptions, it is not required to, among other things: (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd- Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the consolidated financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation. Blaize will remain an EGC under the JOBS Act until the earliest of (i) the last day of its first fiscal year following the fifth anniversary of the closing of BurTech’s initial public offering, (ii) the last date of our fiscal year in which it has total annual gross revenue of at least $1.235 billion, (iii) the date on which it is deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (iv) the date on which it have issued more than $1.0 billion in non- convertible debt securities during the previous three-years. Critical Accounting Policies and Estimates Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The preparation of these condensed consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenue and expenses during the applicable periods. We evaluate our estimates, assumptions and judgments on an ongoing basis. Our estimates, assumptions and judgments are based on historical experience and various other factors that we believe to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our condensed consolidated financial statements, which, in turn, could change the results from those reported. See Note 2 to our condensed consolidated financial statements included in this Form 10-Q for a description of the significant accounting policies that we use to prepare our condensed consolidated financial statements. Recent Accounting Pronouncements We have considered recently issued accounting pronouncements and are currently evaluating the impact the adoption of such pronouncements will have on our condensed consolidated financial statements.