BlueRiver Acquisition (BLUA) - 2024 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements The company reported Q2 2024 net income driven by warrant fair value changes, yet faces going concern doubts and delisting post-redemptions Condensed Consolidated Balance Sheets The balance sheet reflects decreased total assets due to trust account redemptions and increased liabilities from accrued expenses Condensed Consolidated Balance Sheet Summary | Financial Metric | June 30, 2024 (Unaudited) | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Total Current Assets | $59,427 | $39,582 | | Cash held in Trust Account | $17,449,581 | $20,179,711 | | Total Assets | $17,509,008 | $20,219,293 | | Liabilities & Equity | | | | Total Current Liabilities | $7,599,662 | $5,280,408 | | Total Liabilities | $7,875,144 | $5,851,390 | | Class A ordinary shares subject to possible redemption | $17,349,581 | $20,079,711 | | Total Shareholders' Deficit | ($7,715,717) | ($5,711,808) | - Total assets decreased primarily due to a reduction in cash held in the Trust Account, reflecting share redemptions[4][5] - Total liabilities increased, driven by higher accrued expenses and working capital loans from a related party[4][5] Unaudited Condensed Consolidated Statements of Operations The statement of operations shows a Q2 2024 net income primarily driven by a positive change in derivative warrant liabilities Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Income (loss) from operations | $313,152 | ($482,966) | ($2,142,638) | ($2,727,080) | | Income from cash and investments held in Trust Account | $200,899 | $179,734 | $414,672 | $1,585,936 | | Change in fair value of derivative warrant liabilities | $591,000 | $73,875 | $295,500 | ($98,500) | | Net income (loss) | $1,105,051 | ($224,017) | ($1,432,466) | ($1,238,844) | | Basic and diluted net income (loss) per share, Class A | $0.12 | ($0.02) | ($0.15) | ($0.09) | - The company reported net income for Q2 2024, a significant shift from a net loss in Q2 2023, primarily driven by a $591,000 positive change in the fair value of derivative warrant liabilities[7] Unaudited Condensed Consolidated Statements of Cash Flows Cash flow activities for H1 2024 were dominated by trust account withdrawals to fund ordinary share redemptions Cash Flow Summary for the Six Months Ended June 30 (Unaudited) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($391,084) | ($460,764) | | Net cash provided by investing activities | $3,144,802 | $271,939,156 | | Net cash used in financing activities | ($2,776,373) | ($271,394,156) | | Net change in cash | ($22,655) | $84,236 | - Investing and financing activities were dominated by cash withdrawn from the Trust Account ($3.3M) to fund the redemption of ordinary shares ($3.3M) during the first six months of 2024[9] Notes to Unaudited Condensed Consolidated Financial Statements Notes detail the company's blank check status, going concern doubts, merger termination, delisting, and recent share redemptions - The company is a blank check company formed to effect a business combination, with its combination period extended to August 2, 2025, following multiple shareholder votes and associated share redemptions[11][30][104] - Management has determined that the company's liquidity condition and mandatory liquidation requirement raise substantial doubt about its ability to continue as a going concern, with a working capital deficit of approximately $7.5 million as of June 30, 2024, and reliance on Sponsor loans[31][34] - On June 28, 2024, the previously announced Agreement and Plan of Merger with Spinal Stabilization Technologies, LLC (SST) was terminated with no termination fees due[98][142] - Subsequent to the quarter end, on July 15, 2024, the NYSE American filed a Form 25 to delist all of the company's securities, and the company has not applied to list its securities on over-the-counter markets[23][125][126] - On August 2, 2024, shareholders approved an extension for the business combination deadline to August 2, 2025, leading to the redemption of 1,475,947 Public Shares for approximately $16.4 million[30][128] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's blank check status, merger termination, Q2 2024 results, and significant going concern doubts amid redemptions and delisting - The company's proposed Business Combination with Spinal Stabilization Technologies, LLC (SST) was terminated on June 28, 2024, with no termination fees due by either party[142] - As of June 30, 2024, the company had approximately $17,000 in cash and a working capital deficit of approximately $7.5 million, relying on working capital loans from its Sponsor, of which $1,347,700 was outstanding[144][145] - Management has concluded that the company's liquidity condition and mandatory liquidation requirement raise substantial doubt about its ability to continue as a going concern[147] - The company has undergone multiple extensions of its combination period, with the latest extending the deadline to August 2, 2025, accompanied by significant shareholder redemptions that reduced cash held in the Trust Account[137][138][139] Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing quantitative and qualitative market risk disclosures - As a smaller reporting company, BlueRiver Acquisition Corp. is not required to provide quantitative and qualitative disclosures about market risk[170] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal controls - Based on an evaluation as of June 30, 2024, the company's chief executive officer and chief financial officer concluded that disclosure controls and procedures were effective[171] - No changes to the internal control over financial reporting occurred during the quarter that have materially affected or are likely to materially affect such controls[172] PART II. OTHER INFORMATION Legal Proceedings The company reported no legal proceedings during the period - There are no legal proceedings to report[174] Risk Factors The company highlights unchanged material risk factors, emphasizing economic downturn, capital market volatility, regulatory changes, and banking sector turmoil - The current economic downturn, characterized by inflation and higher interest rates, may adversely affect potential target businesses and make it more difficult to obtain financing for an initial business combination[175][176] - Proposed SEC rules regarding SPACs could increase the costs and time required to complete a business combination and may constrain the circumstances under which one could be completed[180] - The company's working capital was held at First Republic Bank, which became insolvent on May 1, 2023, highlighting turmoil in the banking sector despite assets being sold to JP Morgan Chase[182] Unregistered Sales of Equity Securities and Use of Proceeds This section details IPO proceeds, including $287.5 million in the Trust Account, and recent share redemptions totaling $3.3 million - Simultaneously with the IPO, the Sponsor purchased 800,000 Private Placement Units at $10.00 per unit, generating gross proceeds of approximately $8.0 million[184] Issuer Purchases of Equity Securities (February 2024) | Period | Total number of shares purchased | Average price paid per share | | :--- | :--- | :--- | | February 1 – February 29, 2024 | 305,218 | $10.81709768 | Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[189] Mine Safety Disclosures This item is not applicable to the company - Not applicable[189] Other Information The company reported no other material information - No directors or officers adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading plan during the fiscal quarter[190] Exhibits This section lists exhibits filed with the Form 10-Q, including corporate document amendments, officer certifications, and XBRL data - The report includes a list of exhibits filed, such as amendments to corporate documents, CEO/CFO certifications (Sections 302 and 906 of Sarbanes-Oxley), and interactive data files (XBRL)[191]