Blue Acquisition Corp-A(BACC) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements. Presents Blue Acquisition Corp.'s unaudited condensed financial statements as of June 30, 2025, covering balance sheet, operations, shareholder deficit, and cash flows Unaudited Condensed Balance Sheet | ASSETS | | | :--- | :--- | | Cash | $ 1,235,432 | | Prepaid expenses - current | 82,032 | | Due from related party | 10,321 | | Total Current Assets | 1,327,785 | | Cash and marketable securities held in Trust Account | 201,571,137 | | Prepaid expenses – non-current | 71,507 | | Total Non-current Assets | 201,642,644 | | TOTAL ASSETS | $202,970,429 | | LIABILITIES, ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS' DEFICIT | | | Current Liabilities: | | | Accounts payable | $ 47,376 | | Accrued expenses | 8,503 | | Administrative services fee payable – related party | 2,333 | | Total Current Liabilities | 58,212 | | Deferred underwriter fee liability | 7,043,750 | | Total Non-current Liabilities | 7,043,750 | | TOTAL LIABILITIES | 7,101,962 | | Class A ordinary shares subject to possible redemption | 201,571,137 | | Shareholders' Deficit | | | Class A ordinary shares | 77 | | Class B ordinary shares | 707 | | Additional paid-in capital | — | | Accumulated deficit | (5,703,454) | | Total Shareholders' Deficit | (5,702,670) | | TOTAL LIABILITIES, ORDINARY SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS' DEFICIT | $202,970,429 | Unaudited Condensed Statement of Operations | Operating expenses: | Three Months Ended June 30, 2025 | Period From February 10, 2025 (Inception) Through June 30, 2025 | | :--- | :--- | :--- | | 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 | | Total operating expenses | 76,432 | 138,248 | | Loss from operations | (76,432) | (138,248) | | Other income: | | | | Dividend income on marketable securities held in Trust Account | 321,137 | 321,137 | | Interest income on operating account | 709 | 739 | | Other income | 321,846 | 321,876 | | Net income | $ 245,414 | $ 183,628 | | Weighted average shares outstanding of redeemable Class A ordinary shares | 3,096,154 | 1,998,227 | | Basic and diluted net income per share, redeemable Class A ordinary shares | $ 1.70 | $ 2.63 | | Weighted average shares outstanding of non-redeemable Class A and Class B ordinary shares | 6,610,815 | 6,415,464 | | 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 | | Class A ordinary shares | Class B ordinary shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders' Deficit | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance – February 10, 2025 (inception) | — | — | — | — | — | | Class B ordinary shares issued to Sponsor | — | 707 | 24,293 | | 25,000 | | Contribution for purchase of private placement units | — | — | 100,000 | — | 100,000 | | Net loss | — | — | — | (61,786) | (61,786) | | Balance as of March 31, 2025 | — | 707 | 124,293 | (61,786) | 63,214 | | Issuance of Class A ordinary shares in IPO | — | — | 4,361,306 | — | 4,361,306 | | Sale of private placement units | 59 | — | 5,822,441 | — | 5,822,500 | | Sale of representative shares | 18 | — | 1,749,982 | — | 1,750,000 | | Remeasurement of Class A ordinary shares to redemption value | — | — | (12,058,022) | (5,887,082) | (17,945,104) | | Net income | — | — | — | 245,414 | 245,414 | | Balance – June 30, 2025 | $ 77 | $ 707 | $ — | $ (5,703,454) | $ (5,702,670) | Unaudited Condensed Statement of Cash Flows | Cash Flows from Operating Activities: | | | :--- | :--- | | Net income | $ 183,628 | | Adjustments to reconcile net loss to net cash used in operating activities: | | | Formation, general and administrative expenses paid by Sponsor under promissory note – related party | 1,089 | | Dividend income on marketable securities held in Trust Account | (321,137) | | Changes in operating assets and liabilities: | | | Prepaid expenses | (128,539) | | Accounts payable | 47,376 | | Accrued expenses | 8,505 | | Administrative support fee – related party | 2,333 | | Net cash used in operating activities | (206,745) | | Cash Flows from Investing Activities: | | | Purchase of treasury securities in Trust Account | (201,250,000) | | Net cash used in investing activities | (201,250,000) | | Cash Flows from Financing Activities: | | | Proceeds from issuance of Class A ordinary shares | 201,250,000 | | Proceeds from sale of private placement units | 5,922,500 | | Payment of underwriting fees and reimbursements | (4,100,000) | | Payment of promissory note – related party | (193,236) | | Due from related party, net | (10,321) | | Excess cash contribution recorded under promissory note – related party | 167,147 | | Payment of offering costs | (343,913) | | Net cash provided by financing activities | 202,692,177 | | Net Change in Cash | 1,235,432 | | Cash – Beginning of period | — | | Cash – End of period | $ 1,235,432 | Notes to Unaudited Condensed Financial Statements Note 1 — Organization and Business Operations SPAC Blue Acquisition Corp. completed IPO and private placement, placing proceeds into a Trust Account for a Business Combination - Blue Acquisition Corp. was incorporated on February 10, 2025, as a special purpose acquisition company (SPAC) for the purpose of effecting a Business Combination[24] - On June 16, 2025, the Company consummated its Initial Public Offering (IPO) of 20,125,000 units at $10.00 per unit, generating gross proceeds of $201,250,000[26] - Simultaneously with the IPO, the Company sold 592,250 Private Placement Units at $10.00 per unit, generating gross proceeds of $5,922,500[27] - A total of $201,250,000 from the IPO and Private Placement proceeds was placed in a Trust Account, to be used for the Business Combination[31] - The Business Combination must have a fair market value equal to at least 80% of the net balance in the Trust Account[30] - As of June 30, 2025, the Company had $1,235,432 cash and working capital of $1,269,573[37] Note 2 — Significant Accounting Policies Outlines key accounting policies: U.S. GAAP, EGC status, estimates, Trust Account cash, credit risk, offering costs, fair value, and net income per share - The financial statements are presented in conformity with U.S. GAAP and SEC rules[42] - 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 no cash equivalents[47] - Assets held in the Trust Account amounted to $201,571,137 as of June 30, 2025, held in marketable securities[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] - Net income (loss) per ordinary share is calculated using the two-class method for redeemable and non-redeemable shares[57] Note 3 — Initial Public Offering Company completed IPO on June 16, 2025, selling 20,125,000 units at $10.00 each, including over-allotment option - The Company sold 20,125,000 Units in its IPO on June 16, 2025, at $10.00 per Unit[72] - The IPO included 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 Concurrently with IPO, 592,250 Private Placement Units sold at $10.00 per unit, totaling $5,922,500 - Simultaneously with the IPO, 592,250 Private Placement Units were sold at $10.00 per unit, generating $5,922,500[73] - The Private Placement Units were purchased by the Sponsor (391,000 units) and the underwriters (201,250 units)[73] - Proceeds from the Private Placement Units were added to the Trust Account[73] Note 5 — Segment Information Company operates as a single segment; CFO reviews cash, Trust Account securities, operating loss, and dividend income for performance assessment - The Company has determined it has only one reportable segment, with the Chief Financial Officer acting as the CODM[77] - Key metrics reviewed by the CODM include cash, cash and marketable securities held in Trust Account, operating loss, and dividend income on marketable securities held in Trust Account[78][79] Segment Information Metrics | Metric | June 30, 2025 | | :--- | :--- | | Cash | $ 1,235,432 | | Cash and marketable securities held in Trust Account | $201,571,137 | | Total assets | $202,970,429 | | Metric | For the Three Months Ended June 30, 2025 | For the Period from February 10, 2025 (Inception) through June 30, 2025 | | :--- | :--- | :--- | | Operating loss | $ (76,432) | $ (138,248) | | Dividend income on marketable securities held in Trust Account | $ 321,137 | $ 321,137 | Note 6 — Related Party Transactions Details related party transactions: founder shares, promissory note repayment, administrative services agreement, and potential Working Capital Loans - The Sponsor received 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 on June 16, 2025, with an overpayment of $10,321 recorded as a related party receivable[83] - The Company entered into an Administrative Services Agreement to pay Blue Holdings Management LLC $5,000 per month for office space and support, accruing $2,333 as of June 30, 2025[84] - The Sponsor or affiliates may provide Working Capital Loans, convertible into private placement units, but no such loans were outstanding as of June 30, 2025[85] Note 7 — Commitments and Contingencies Addresses commitments and contingencies: Business Combination risks, shareholder registration rights, and underwriting agreement details including fees - The Company's ability to complete a Business Combination may be adversely affected by factors like changes in laws, economic conditions, inflation, and geopolitical instability[86] - Holders of founder shares, Private Placement Units, and other specified securities are entitled to registration rights[88] - Underwriters received a cash underwriting discount of $4,025,000 and are entitled to a deferred underwriting discount of $7,043,750, payable upon completion of a Business Combination[90] - The Company issued 175,000 Representative Shares to the underwriters, subject to transfer restrictions and waiver of redemption/liquidation rights[91] Note 8 — Shareholder's Deficit Details authorized and outstanding share capital: preference, Class A, and Class B ordinary shares, conversion terms, and shareholder voting rights - The Company is authorized to issue 5,000,000 preference shares, with none issued or outstanding as of June 30, 2025[92] - 500,000,000 Class A ordinary shares are authorized; 767,250 were issued and outstanding (excluding 20,125,000 subject to redemption) as of June 30, 2025[93] - 50,000,000 Class B ordinary shares are authorized; 7,069,913 were issued and outstanding to the Sponsor as of June 30, 2025[94][95] - Class B ordinary shares automatically convert into 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 can vote on director appointments and changes in jurisdiction[98] Note 9 — Fair Value Measurements Describes fair value measurement of Trust Account marketable securities, valued at $201,571,137 as of June 30, 2025, classified as Level 1 - Marketable securities held in the Trust Account were valued at $201,571,137 as of June 30, 2025[100] - The fair value of these securities is classified within Level 1 of the fair value hierarchy, based on dividend and interest income and market fluctuations[101] Fair Value Hierarchy as of June 30, 2025 | As of June 30, 2025 | (Level 1) | (Level 2) | (Level 3) | | :--- | :--- | :--- | :--- | | Assets: | | | | | Treasury Trust Funds held in Trust Account | $201,571,137 | $ — | $ — | Note 10 — Subsequent Events Evaluated post-June 30, 2025 events, noting separate trading of Class A ordinary shares and Share Rights from Units, commencing August 4, 2025 - On July 31, 2025, the Company announced that, commencing on August 4, 2025, holders of Units may elect to separately trade the Class A ordinary shares and Share Rights[104] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Overview of financial condition and operations, detailing IPO/private placement proceeds, Trust Account allocation, liquidity, operating expenses, and net income - The Company is a blank check company formed to effect an initial Business Combination, using proceeds from its IPO and Private Placement[108] - As of June 30, 2025, the Company had $1,235,432 in cash and working capital of $1,269,573[110] - For the three months ended June 30, 2025, the Company reported net income of $245,414, primarily from dividend and interest income[120] - For the period from inception (February 10, 2025) through June 30, 2025, net income was $183,628[121] - A total of $201,250,000 from the IPO and Private Placement proceeds was placed in the Trust Account[118][125] - The Company expects primary liquidity requirements for the first twelve months of its Combination Period to include approximately $225,000 for business combination expenses, $200,000 for regulatory reporting, $85,000 for Nasdaq fees, $60,000 for administrative services, $400,000 for D&O insurance, and $180,000 for general working capital[130] Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk. As a smaller reporting company, Blue Acquisition Corp. is not required to provide market risk disclosures in this report - The Company is a smaller reporting company and is not required to provide market risk disclosures[142] Item 4. Controls and Procedures. Disclosure controls and procedures were ineffective as of June 30, 2025, due to a material weakness in internal controls, with a remediation plan underway - Disclosure controls and procedures were not effective as of June 30, 2025[143] - A material weakness exists in internal controls over financial reporting due to a lack of properly designed, implemented, and effectively operating controls[144] - Management plans to remediate this weakness by designing a formal control environment, accounting policies, procedures, and controls, and by utilizing third-party professionals for complex accounting applications[144] PART II – OTHER INFORMATION Item 1. Legal Proceedings. No material litigation is currently pending against Blue Acquisition Corp. or its officers and directors - No material litigation is currently pending against the Company, its officers, or directors[149] Item 1A. Risk Factors. Highlights key risks: internal control weakness, trade policy impact on Business Combination, extension risks, and potential IPO agreement amendments - The Company has identified a material weakness in its internal control over financial reporting, which could adversely affect investor confidence and financial reporting accuracy[151][152] - Changes in international trade policies, tariffs, and treaties may materially and 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 the amount held in the Trust Account and adversely affect the Company[157] - There is no assurance that the share price of the post-Business Combination company will be greater than the Redemption Price of Public Shares[158][159] - Certain agreements related to the Initial Public Offering 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. No unregistered equity sales occurred; IPO and Private Placement proceeds use remains consistent with IPO Registration Statement - No unregistered sales of equity securities occurred during the quarterly period[161] - There has been no material change in the planned use of proceeds from the Initial Public Offering and Private Placement[163] Item 3. Defaults Upon Senior Securities. The Company 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. No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers[167] Item 6. Exhibits. Lists filed or incorporated exhibits, including certifications from Principal Executive and Financial Officers, and Inline XBRL documents Exhibits List | Exhibit No. | Description | | :--- | :--- | | 31.1 | Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | | 31.2 | Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15(d)-14(a) under the Securities Exchange Act of 1934, as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | | 32.1 | Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | | 32.2 | Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | | 101.INS | Inline XBRL Instance Document* | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document* | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.* | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | | 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document* | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | | 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).* | SIGNATURES The report was signed on August 12, 2025, by Ketan Seth, CEO, and David Bauer, CFO, on behalf of Blue Acquisition Corp - The report was signed by Ketan Seth, Chief Executive Officer, and David Bauer, Chief Financial Officer, on August 12, 2025[172]