Blue Acquisition Corp Unit(BACCU) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements. This section presents the unaudited condensed financial statements of Blue Acquisition Corp. as of June 30, 2025, and for the periods ended June 30, 2025, along with accompanying notes. The financial statements reflect the company's status as a Special Purpose Acquisition Company (SPAC) focused on its formation, Initial Public Offering (IPO), and the management of funds in its Trust Account Unaudited Condensed Balance Sheet This statement presents the company's financial position, including assets, liabilities, and shareholders' deficit, as of June 30, 2025 | Indicator | Amount (USD) | | :------------------------------------------ | :------------- | | Assets: | | | Total Current Assets | $1,327,785 | | Cash and marketable securities held in Trust Account | $201,571,137 | | Total Non-current Assets | $201,642,644 | | TOTAL ASSETS | $202,970,429 | | Liabilities & Shareholders' Deficit: | | | Total Current Liabilities | $58,212 | | Deferred underwriter fee liability | $7,043,750 | | TOTAL LIABILITIES | $7,101,962 | | Class A ordinary shares subject to possible redemption | $201,571,137 | | Total Shareholders' Deficit | $(5,702,670) | Unaudited Condensed Statement of Operations This statement outlines the company's revenues, expenses, and net income for the three months and period ended June 30, 2025 | Indicator | Three Months Ended June 30, 2025 (USD) | Period From Inception Through June 30, 2025 (USD) | | :-------------------------------------------------- | :------------------------------------- | :------------------------------------------------ | | Total operating expenses | $76,432 | $138,248 | | Loss from operations | $(76,432) | $(138,248) | | Other income (dividend & interest) | $321,846 | $321,876 | | Net income | $245,414 | $183,628 | | Basic and diluted net income per share, redeemable Class A ordinary shares | $1.70 | $2.63 | | Basic and diluted net loss per share, non-redeemable Class A and Class B ordinary shares | $(0.76) | $(0.79) | Unaudited Condensed Statement of Changes in Shareholders' Deficit This statement details the changes in the company's shareholders' deficit from inception through June 30, 2025 | Item | Amount (USD) | | :------------------------------------------------- | :------------- | | Balance – February 10, 2025 (inception) | $0 | | Class B ordinary shares issued to Sponsor | $707 | | Contribution for purchase of private placement units | $100,000 | | Net loss (as of March 31, 2025) | $(61,786) | | Balance as of March 31, 2025 | $63,214 | | Issuance of Class A ordinary shares in IPO | $4,361,306 | | Sale of private placement units | $5,822,500 | | Sale of representative shares | $1,750,000 | | Remeasurement of Class A ordinary shares to redemption value | $(17,945,104) | | Net income (for three months ended June 30, 2025) | $245,414 | | Balance – June 30, 2025 | $(5,702,670) | Unaudited Condensed Statement of Cash Flows This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the period | Cash Flow Activity | Amount (USD) | | :-------------------------------------------------------------------------------- | :------------- | | Net cash used in operating activities | $(206,745) | | Net cash used in investing activities (Purchase of treasury securities in Trust Account) | $(201,250,000) | | Net cash provided by financing activities | $202,692,177 | | Net Change in Cash | $1,235,432 | | Cash – End of period | $1,235,432 | | Supplemental Non-Cash Activities: | | | Initial fair value of Class A ordinary shares subject to possible redemption | $183,626,033 | | Remeasurement of Class A ordinary shares subject to possible redemption | $17,945,104 | Notes to Unaudited Condensed Financial Statements These notes provide additional information and explanations supporting the unaudited condensed financial statements - Blue Acquisition Corp. was incorporated on February 10, 2025, as a Cayman Islands exempted company, operating as a special purpose acquisition company (SPAC) to effect a Business Combination[24] - The company consummated its Initial Public Offering (IPO) on June 16, 2025, selling 20,125,000 units at $10.00 per unit, generating gross proceeds of $201,250,000, including the full exercise of the over-allotment option[26] - Simultaneously with the IPO, the company completed a private placement of 592,250 units at $10.00 per unit, generating gross proceeds of $5,922,500[27] - Transaction costs for the IPO and private placement amounted to $13,262,661, including a $7,043,750 deferred underwriting fee[28] - An amount of $201,250,000 from the net proceeds was placed in a Trust Account, to be released upon the completion of a Business Combination, redemption of public shares, or certain amendments to the company's articles of association[31] Note 2 — Significant Accounting Policies This note outlines the key accounting principles and policies applied in preparing the financial statements - The company is an "emerging growth company" and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards[43][44] - As of June 30, 2025, the company had $1,235,432 in cash and $201,571,137 in marketable securities held in the Trust Account[47][48] - The fair value of Public Rights was $4,361,306, or $0.23 per Public Right, as of June 16, 2025, classified within shareholders' equity[54] - The company is an exempted Cayman Islands company and is not subject to income taxes in the Cayman Islands or the United States, resulting in a zero tax provision for the period[65] - Class A ordinary shares subject to possible redemption are presented at a redemption value of $201,571,137 as temporary equity as of June 30, 2025[66][67] Note 3 — Initial Public Offering This note details the terms and proceeds of the company's Initial Public Offering completed on June 16, 2025 - On June 16, 2025, the company sold 20,125,000 Units at $10.00 per Unit, including the full exercise of the underwriters' over-allotment option for 2,625,000 Units[72] - Each Unit consists of one Class A ordinary share and one Public Right, with ten Public Rights entitling the holder to one Class A ordinary share upon Business Combination[72] Note 4 — Private Placement This note describes the private placement of units conducted concurrently with the Initial Public Offering - Simultaneously with the IPO, 592,250 Private Placement Units were sold to the Sponsor and underwriters at $10.00 per unit, totaling $5,922,500[73] - The Private Placement Units are identical to Public Units, and a portion of the proceeds was added to the Trust Account[73] Note 5 — Segment Information This note clarifies that the company operates as a single reportable segment, with the CFO as the CODM - The company has one reportable segment, with the Chief Financial Officer identified as the Chief Operating Decision Maker (CODM)[77] - The CODM reviews operating loss, dividend income on marketable securities in the Trust Account, cash, and marketable securities in the Trust Account to assess performance and allocate resources[78][79] Note 6 — Related Party Transactions This note discloses transactions and agreements between the company and its related parties, including the Sponsor - The Sponsor was issued 7,069,913 Class B ordinary shares (founder shares) for a capital contribution of $25,000[80][94] - A promissory note of up to $300,000 from the Sponsor was repaid in full by June 16, 2025, resulting in a $10,321 related party receivable due to overpayment[83] - The company pays Blue Holdings Management LLC (Sponsor's affiliate) $5,000 per month for administrative services, with $2,333 accrued as of June 30, 2025[84] - No Working Capital Loans from related parties were outstanding as of June 30, 2025[85] Note 7 — Commitments and Contingencies This note outlines various risks, contractual obligations, and potential future liabilities of the company - The company's ability to complete a Business Combination faces risks from changes in laws, market downturns, inflation, interest rates, tariffs, supply chain disruptions, public health, and geopolitical instability[86] - Holders of founder shares, Private Placement Units, Working Capital Loans, and Representative Shares are entitled to registration rights[88] - The underwriters' over-allotment option for 2,625,000 units was fully exercised on June 16, 2025[89] - A deferred underwriting discount of $7,043,750 is payable to the underwriters upon completion of a Business Combination[90] - 175,000 Representative Shares were issued to the underwriters/designees, subject to transfer restrictions and waiver of redemption/liquidation rights[91] Note 8 — Shareholder's Deficit This note details the authorized and outstanding share capital, including Class A and Class B ordinary shares and share rights - The company is authorized to issue 5,000,000 preference shares (none outstanding), 500,000,000 Class A ordinary shares (767,250 outstanding excluding redeemable shares), and 50,000,000 Class B ordinary shares (7,069,913 outstanding)[92][93][94][95] - Class B ordinary shares automatically convert to Class A ordinary shares on a one-for-one basis upon Business Combination, subject to adjustment[97] - Prior to a Business Combination, only Class B ordinary shareholders vote on director appointments/removals and continuation in other jurisdictions[98] - Each Share Right entitles the holder to one-tenth (1/10) of one Class A ordinary share upon consummation of the initial Business Combination[99] Note 9 — Fair Value Measurements This note provides information on the fair value hierarchy applied to the company's marketable securities in the Trust Account - Marketable securities held in the Trust Account, valued at $201,571,137 as of June 30, 2025, are classified within Level 1 of the fair value hierarchy[100][101][102] Note 10 — Subsequent Events This note reports significant events that occurred after the balance sheet date but before the financial statements were issued - On July 31, 2025, the company announced that holders of Units may elect to separately trade Class A ordinary shares and Share Rights starting August 4, 2025[104] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This section provides an overview of Blue Acquisition Corp.'s financial condition and results of operations, emphasizing its status as a blank check company focused on identifying and completing an initial Business Combination. It details recent financial activities, liquidity, and capital resources, while also addressing contractual obligations and recent accounting pronouncements Overview This section provides a high-level summary of the company's nature as a blank check company and its objective to complete a Business Combination - Blue Acquisition Corp. is a blank check company incorporated on February 10, 2025, with the sole purpose of effecting an initial Business Combination[108] - The company has not yet selected a Business Combination target and intends to use proceeds from its IPO and Private Placement, along with potential additional securities or debt, for the combination[108] - Issuing additional securities for a Business Combination could dilute existing shareholders, subordinate rights, cause a change in control, or adversely affect market prices[109] - As of June 30, 2025, the company had $1,235,432 in cash and $1,269,573 in working capital[110] - Extending the Combination Period requires Public Shareholder approval and may lead to redemptions, reducing Trust Account funds and potentially affecting Nasdaq listing[111] Recent Developments This section highlights key financial and corporate events that occurred recently, including IPO and private placement details - The Sponsor deposited an aggregate of $249,950 into the company's bank account in April and May 2025, accounted for as a capital contribution for Private Placement Units[112] - In May 2025, a share capitalization resulted in an additional 1,009,988 Class B Ordinary Shares, bringing the total to 7,069,913 outstanding[113] - On June 16, 2025, the IPO of 20,125,000 Public Units was consummated, generating $201,250,000, including the full exercise of the over-allotment option[115] - 175,000 Representative Shares were issued to the underwriters/designees in connection with the IPO[116] - A private sale of 592,250 Private Placement Units for $5,922,500 was completed simultaneously with the IPO[117] - A total of $201,250,000 from the IPO and Private Placement proceeds was placed in a U.S.-based Trust Account[118] Results of Operations This section analyzes the company's financial performance, focusing on non-operating income and expenses as a SPAC - The company has not engaged in operations or generated operating revenues to date, with activities focused on organizational matters and the IPO[119] | Indicator | Three Months Ended June 30, 2025 (USD) | Period From Inception Through June 30, 2025 (USD) | | :-------------------------------------------------- | :------------------------------------- | :------------------------------------------------ | | Net income | $245,414 | $183,628 | | Dividend income on marketable securities held in Trust Account | $321,137 | $321,137 | | Interest income on operating account | $709 | $739 | | Formation, general and administrative expenses | $53,824 | $115,640 | | Legal and accounting expenses | $16,782 | $16,782 | | Administrative services fee – related party | $2,333 | $2,333 | | Insurance expense | $3,493 | $3,493 | Liquidity and Capital Resources This section discusses the company's sources and uses of cash, including funds in the Trust Account and estimated liquidity requirements - Prior to the IPO, liquidity was met through a $25,000 payment from the Sponsor for Founder Shares and $300,000 in loans from the Sponsor[122] - Following the IPO and Private Placement, $201,250,000 was placed in the Trust Account[125] - As of June 30, 2025, the company had $1,235,432 of cash held outside the Trust Account, intended for identifying and evaluating target businesses, due diligence, and transaction costs[127] - The Sponsor or affiliates may provide Working Capital Loans, up to $1,500,000 convertible into private placement units, but no such loans were outstanding as of June 30, 2025[129] Estimated Primary Liquidity Requirements (First 12 Months of Combination Period) | Expense Category | Estimated Amount (USD) | | :-------------------------------------------------------------------------------- | :--------------------- | | Legal, accounting, due diligence, travel for business combinations | ~$225,000 | | Legal and accounting fees for regulatory reporting | ~$200,000 | | Nasdaq and other regulatory fees | ~$85,000 | | Office space and administrative services | ~$60,000 | | Directors' and officers' liability insurance | ~$400,000 | | General working capital (miscellaneous expenses and reserves) | ~$180,000 | Off-Balance Sheet Arrangements This section confirms the absence of any off-balance sheet arrangements as of the reporting date - As of June 30, 2025, the company did not have any off-balance sheet arrangements[133] Contractual Obligations This section details the company's financial commitments, including deferred underwriting fees and administrative service agreements - The company has no long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities as of June 30, 2025[134] - A deferred underwriting fee of $7,043,750 is payable to the underwriters upon completion of a Business Combination[134] - The company has an agreement to pay $5,000 per month for administrative services to an affiliate of its Sponsor[135] - The IPO Promissory Note from the Sponsor, totaling $193,236, was repaid in full on June 16, 2025, resulting in a $10,321 related party receivable[136] Commitments and Contingencies This section outlines various obligations and potential future events that could impact the company's financial position - Holders of Founder Shares, Private Placement Units, Working Capital Loans, Representative Shares, and certain Class A Ordinary Shares are entitled to registration rights[138] Critical Accounting Estimates This section states that the company has not identified any critical accounting estimates for the reporting period - The company has not identified any critical accounting estimates as of June 30, 2025[139] Recent Accounting Pronouncements This section discusses the adoption and assessment of new accounting standards relevant to the company - The company adopted ASU 2023-07, "Segment reporting (Topic 280): Improvements to Reportable Segment Disclosures," on February 10, 2025 (inception)[140] - The company is currently assessing the impact of ASU 2023-09, "Improvements to Income Tax Disclosures," which is effective for fiscal years beginning after December 15, 2024[141] Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk. As a smaller reporting company, Blue Acquisition Corp. is exempt from providing specific quantitative and qualitative disclosures regarding market risk in this report - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures regarding market risk[142] Item 4. Controls and Procedures. This section addresses the effectiveness of Blue Acquisition Corp.'s disclosure controls and procedures, noting a material weakness in internal controls over financial reporting as of June 30, 2025, and outlining remediation plans Evaluation of Disclosure Controls and Procedures This section evaluates the effectiveness of the company's disclosure controls and procedures, identifying a material weakness and planned remediation - The Certifying Officers concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025[143] - A material weakness in internal controls over financial reporting was identified due to a lack of properly designed, implemented, and effectively operating controls[144] - Management plans to implement a remediation plan, including designing a formal control environment, accounting policies, procedures, and enhancing processes for complex accounting standards, potentially using third-party professionals[144] Changes in Internal Control over Financial Reporting This section confirms that no changes in internal control over financial reporting occurred during the period - No changes in internal control over financial reporting were applicable for the period[147] PART II – OTHER INFORMATION Item 1. Legal Proceedings. To the knowledge of management, there is no material litigation currently pending against Blue Acquisition Corp. or its officers and directors - No material litigation is currently pending against the company or its officers/directors[149] Item 1A. Risk Factors. As a smaller reporting company, Blue Acquisition Corp. highlights key risks, including a material weakness in internal control over financial reporting, potential adverse effects from changes in international trade policies, and risks associated with extending the Business Combination Period and the post-combination share price - A material weakness in internal controls over financial reporting was identified as of June 30, 2025, posing a risk to accurate and timely financial reporting[151][152] - Changes in international trade policies, tariffs, and treaties may adversely affect the search for a Business Combination target or the performance of a post-Business Combination company[153][155][156] - Seeking to extend the Combination Period could reduce funds in the Trust Account due to redemptions and potentially affect Nasdaq listing[157] - There is no assurance that the share price of the post-Business Combination company will be greater than the Redemption Price, which was approximately $10.02 per Public Share as of June 30, 2025[158][159] - Certain agreements related to the IPO may be amended or waived without shareholder approval, potentially benefiting Initial Shareholders, the Sponsor, officers, and/or directors[160] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. This section confirms no unregistered sales of equity securities during the quarter and states that the planned use of proceeds from the IPO and Private Placement remains materially unchanged Unregistered Sales of Equity Securities This section confirms that no unregistered equity securities were sold during the reporting quarter - There were no sales of unregistered securities during the quarterly period[161] Use of Proceeds This section affirms that the planned allocation of funds from the IPO and private placement remains consistent with prior disclosures - There has been no material change in the planned use of proceeds from the Initial Public Offering and Private Placement as described in the IPO Registration Statement[163] Purchases of Equity Securities by the Issuer and Affiliated Purchasers This section confirms no equity securities were purchased by the issuer or its affiliates - There were no purchases of equity securities by the issuer or affiliated purchasers[164] Item 3. Defaults Upon Senior Securities. Blue Acquisition Corp. reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[165] Item 4. Mine Safety Disclosures. This item is not applicable to Blue Acquisition Corp - Mine Safety Disclosures are not applicable to the company[166] Item 5. Other Information. This section confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter, and no additional information is provided Trading Arrangements This section confirms that no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers - None of the directors or officers adopted or terminated any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the quarter ended June 30, 2025[167] Additional Information This section indicates that no further information is provided beyond the specified disclosures - No additional information is provided in this section[168] Item 6. Exhibits. This section lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report on Form 10-Q, including certifications and XBRL documents - Exhibits include certifications from the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2) and Inline XBRL Instance Document and Taxonomy Extensions (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[169] SIGNATURES This section provides the official signatures of the company's executive officers, certifying the report - The report was signed on August 12, 2025, by Ketan Seth, Chief Executive Officer, and David Bauer, Chief Financial Officer[172]