UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the quarterly period ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from to

Commission File Number: 001-41112

Blue Ocean Acquisition Corp

(Exact name of registrant as specified in its charter)

Cayman Islands		98-1593951
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2 Wisconsin Circle, 7th Floor Chevy Chase, MD 20815		20815
(Address of principal executive offices)		(Zip Code)

(240) 235-5049

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class:	Trading Symbol(s)	Name of Each Exchange on Which Registered:
Units, each consisting of one Class A ordinary share and one-half of one redeemable warrant to purchase one Class A ordinary share	BOCNU	The NASDAQ Stock Market LLC

Class A ordinary share, par value $0.0001 per share	BOCN	The NASDAQ Stock Market LLC

Redeemable warrants, each exercisable for one Class A ordinary share at an exercise price of $11.50 per share, subject to adjustment	BOCNW	The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☑ No ☐

As of August 15, 2022, there were 18,975,000 Units, 18,975,000 Class A ordinary shares and 4,743,750 Class B ordinary shares of the registrant issued and outstanding.

BLUE OCEAN ACQUISITION CORP.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2022

TABLE OF CONTENTS

	Page
Part I. Financial Information	3
Item 1. Interim Financial Statements	3
Condensed Balance Sheets as of June 30, 2022 (Unaudited) and December 31, 2021 (Audited)	3
Unaudited Condensed Statements of Operations for the Three and Six Months Ended June 30, 2022 and for the period from March 26, 2021 (Inception) through June 30, 2021	4
Unaudited Condensed Statements Changes in Stockholders’ Deficit for the Three and Six Months Ended June 30, 2022 and for the period from March 26, 2021 (Inception) through June 30, 2021	5
Unaudited Condensed Statements of Cash Flows for the Six Months Ended June 30, 2022 and for the period from March 26, 2021 (Inception) through June 30, 2022	6
Notes to Unaudited Condensed Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk	29
Item 4. Controls and Procedures	29
Part II. Other Information	30
Item 1. Legal Proceedings	30
Item 1A. Risk Factors	30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3. Defaults Upon Senior Securities	30
Item 4. Mine Safety Disclosures	30
Item 5. Other Information	30
Item 6. Exhibits	31
Part III. Signatures	33

	June 30, 2022			December 31, 2021
	(Unaudited)
Assets
Current Assets:
Cash	$	747,994		$	1,050,670
Prepaid expenses and other assets		299,894			285,020
Total current assets		1,047,888			1,335,690
Non-current assets
Other assets		107,292			236,041
Marketable securities held in trust account		193,653,315			193,549,933
Total assets	$	194,808,495		$	195,121,664

Liabilities and Shareholders’ Deficit
Current Liabilities:
Accounts payable and accrued expenses, current	$	19,116		$	139,852
Accrued offering costs		—			11,105
Accounts Payable – Related Party		50,000			—
Total current liabilities		69,116			150,957
Accrued offering costs, non-current		806,823			806,823
Accrued expenses, non-current		357,336			—
Warrant liabilities		2,331,109			12,629,625
Deferred underwriting fee payable		6,641,250			6,641,250
Total liabilities		10,205,634			20,228,655

Commitments
Class A ordinary shares subject to possible redemption, 18,975,000 shares issued and outstanding at redemption value at $10.20 per share		193,653,315			193,545,000

Shareholders’ Deficit:
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none outstanding		—			—
Class A ordinary shares, $0.0001 Par Value; 200,000,000 shares authorized; no shares issued or outstanding (excluding 18,975,000 shares subject to possible redemption)		—			—
Class B ordinary shares, $0.0001 Par Value; 20,000,000 shares authorized; 4,743,750 shares issued and outstanding⁽¹⁾		474			474
Additional paid-in capital		—			—
Accumulated deficit		(9,050,928	)		(18,652,465	)
Total shareholders’ deficit		(9,050,454	)		(18,651,991	)
Total Liabilities and Shareholders’ Deficit	$	194,808,495		$	195,121,664

	Three Months Ended June 30, 2022			Six Months Ended June 30, 2022			For the period from March 26, 2021 (Inception) through June 30, 2021
General and administrative expenses	$	318,309		$	692,046		$	11,142
Loss from operations		(318,309	)		(692,046	)		(11,142	)

Other Income (expense):
Interest earned on marketable securities held in Trust Account		108,518			168,925			—
Unrealized gain or (loss) on marketable securities held in Trust Account		41,150			(65,543	)		—
Change in fair value of warrant liabilities		3,842,119			10,298,516			—
Net income(loss)	$	3,673,478		$	9,709,852		$	(11,142	)
Weighted average shares outstanding of Class A redeemable ordinary shares		18,975,000			18,975,000			—
Basic and diluted net income per ordinary share, Class A redeemable ordinary shares	$	0.15		$	0.41		$	0.00
Weighted average shares outstanding of Class B ordinary shares non-redeemable shares		4,743,750			4,743,750			3,750,000
Basic and diluted net income per ordinary share, Class B ordinary shares non-redeemable shares	$	0.15		$	0.41		$	0.00

	Class B Ordinary shares				Additional Paid in		Accumulated			Total Shareholders’
	Shares		Amount		Capital		Deficit			Deficit
Balance – December 31, 2021		4,743,750	$	474	$	—	$	(18,652,465	)	$	(18,651,991	)
Net Income		—		—		—		6,036,374			6,036,374
Balance – March 31, 2022		4,743,750	$	474	$	—	$	(12,616,091	)	$	(12,615,617	)
Accretion of Class A ordinary shares to redemption value		—		—		—		(108,315	)		(108,315	)
Net Income		—		—		—		3,673,478			3,673,478
Balance – June 30, 2022		4,743,750	$	474	$	—	$	(9,050,928	)	$	(9,050,454	)

	Six Months Ended June 30, 2022			For the Period from March 26, 2021 (Inception) through June 30, 2021
Cash Flow from Operating Activities:
Net income (loss)	$	9,709,852		$	(11,142	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(168,925	)		—
Unrealized loss on marketable securities held in Trust Account		65,543			—
Change in fair value of warrant liabilities		(10,298,516	)		—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(14,874	)		—
Other assets, non-current		128,750			—
Deferred offering costs		—			(233,463	)
Accounts payable and accrued expenses, current		(120,737	)		223,463
Accrued expenses, non-current		357,336			—
Accounts Payable – Related Party		50,000			—
Net cash used in operating activities		(291,571	)		(21,142	)

Cash flows from financing activities:
Proceeds from sale of Class B ordinary shares		—			25,000
Proceeds from promissory note payable		—			35,000
Payment of offering costs		(11,105	)		—
Net cash provided by financing activities		(11,105	)		60,000
Net change in cash		(302,676	)		38,858
Cash at the beginning of the period		1,050,670			—
Cash at the end of the period	$	747,994		$	38,858
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Deferred underwriting fee payable	$	6,641,250		$	—

	For the three months ended June 30, 2022				For the six months ended June 30, 2021				For the period from March 26, 2021 (Inception) through June 30, 2021
	Class A		Class B		Class A		Class B		Class A		Class B
Basic and diluted net income (loss) per ordinary share
Numerator:
Allocation of net income (loss), as adjusted	$	2,938,783	$	734,696	$	7,767,882	$	1,941,970	$	—	$	(11,142	)
Denominator:
Basic and diluted weighted average shares outstanding		18,975,000		4,743,750		18,975,000		4,743,750		—		3,750,000
Basic and diluted net income (loss) per ordinary share	$	0.15	$	0.15	$	0.41	$	0.41	$	0.00	$	0.00

	June 30, 2022		Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)

Assets:
Marketable securities held in Trust Account	$	193,653,314	$	193,653,314	$	—	$	—
Liabilities:
Warrant liabilities – Public Warrants	$	1,131,859	$	1,131,859	$	—	$	—
Warrant liabilities – Private Placement Warrants	$	1,199,250	$	—	$	—	$	1,199,250

	December 31, 2021		Quoted Prices In Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)

Assets:
Marketable securities held in Trust Account	$	193,549,933	$	193,549,933	$	—	$	—
Liabilities:
Warrant liabilities – Public Warrants	$	6,356,625	$	—	$	—	$	6,356,625
Warrant liabilities – Private Placement Warrants	$	6,273,000	$	—	$	—	$	6,273,000

Input	June 30, 2022			December 31, 2021
Risk-free interest rate		2.99	%		1.28	%
Expected term (years)		5.20			5.20
Expected volatility		0.66	%		12.40	%
Exercise price	$	11.50		$	11.50
Fair value of Class A ordinary shares	$	9.95		$	9.60


Fair value as of December 31, 2021	$	12,629,625
Transfer of Public Warrants to Level 1 measurement		(6,356,625	)
Change in fair value		(3,228,750	)
Fair value as of March 31, 2022	$	3,044,250
Change in fair value		(1,845,000	)
Fair value as of June 30, 2022	$	1,199,250

EXHIBIT INDEX
Exhibit		Description
3.4		Amended and Restated Memorandum and Articles of Association (3)
4.1		Specimen Unit Certificate (2)
4.2		Specimen Ordinary Share Certificate (2)
4.3		Specimen Warrant Certificate (2)
4.4		Warrant Agreement, dated December 2, 2021, among the Registrant and Continental Stock Transfer & Trust Company, as warrant agent (3)
10.1		Letter Agreement dated December 2, 2021, among the Registrant, Blue Ocean Sponsor LLC, Apollo SPAC Fund I, L.P., and the Registrant’s officers and directors (3)
10.3		Investment Management Trust Agreement dated December 2, 2021, between the Registrant and Continental Stock Transfer & Trust Company, as trustee (3)
10.4		Registration Rights Agreement, dated December 2, 2021, among the Registrant, Blue Ocean Sponsor LLC and certain other security holders named therein (3)
10.6		Private Placement Warrants Purchase Agreement, dated December 2, 2021, between the Registrant and Blue Ocean Sponsor LLC (3)
10.7		Form of Indemnity Agreement, dated December 2, 2021, between the Company and each officer and/or director (3)
10.8		Securities Subscription Agreement, dated as of April 6, 2021, between the Registrant and Blue Ocean Sponsor LLC (1)
10.9		Securities Subscription Agreement, dated as of October 28, 2021, by and among the Registrant, Blue Ocean Sponsor LLC and Apollo SPAC Fund I, L.P. (1)
10.10		Administrative Support Agreement, dated December 2, 2021, between the Registrant and Blue Ocean Sponsor LLC (3)

No.		Description of Exhibit
31.1*		Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Chief 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 Chief 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*		XBRL Instance Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

	blue ocean acquisition corp

Date: August 15, 2022	By:	/s/ Paul Bascobert
	Name: Title:	Paul Bascobert Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Ankur Manglik
	Name:	Ankur Manglik
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Blue Ocean Acquisition Corp