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 March 31, 2023

☐ 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 May 12, 2023, there were 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 MARCH 31, 2023

TABLE OF CONTENTS

			Page

Part I - FINANCIAL INFORMATION			1
	Item 1.	Interim Financial Statements.	1
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	21
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	26
	Item 4.	Controls and Procedures.	26
Part II - OTHER INFORMATION			27
	Item 1.	Legal Proceedings.	27
	Item 1A	Risk Factors.	27
	Item 2.	Unregistered Sales of Equity Securities.	28
	Item 3.	Default Upon Senior Securities.	28
	Item 4.	Mine Safety Disclosures.	28
	Item 5.	Other Information.	28
	Item 6.	Exhibits.	28
Part III - SIGNATURES			30

	March 31, 2023			December 31, 2022
	(Unaudited)
Assets
Current Assets:
Cash	$	363,113		$	627,628
Prepaid expenses and other assets		235,765			236,042
Total current assets		598,878			863,670
Non-current assets
Marketable securities held in trust account		198,456,897			196,226,283
Total assets	$	199,055,775		$	197,089,953
Liabilities and Shareholders’ Deficit
Current Liabilities:
Accounts payable and accrued expenses	$	590,339		$	576,727
Accounts Payable – Related Party		140,000			110,000
Total current liabilities		730,339			686,727
Accrued offering costs, non-current		806,823			806,823
Warrant liabilities		1,685,997			1,403,438
Deferred underwriting fee payable		6,641,250			6,641,250
Total liabilities		9,864,409			9,538,238
Commitments
Class A ordinary shares subject to possible redemption, 18,975,000 shares issued and outstanding at redemption value of $10.46 and $10.34 as of March 31, 2023 and December 31, 2022, respectively		198,456,897			196,226,283
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		474			474
Additional paid-in capital		—			—
Accumulated deficit		(9,266,005	)		(8,675,042	)
Total shareholders’ deficit		(9,265,531	)		(8,674,568	)
Total Liabilities and Shareholders’ Deficit	$	199,055,775		$	197,089,953

	For The Three Months Ended March 31,
	2023			2022
General and administrative expenses	$	308,404		$	373,737
Loss from operations		(308,404	)		(373,737	)

Other Income (expense):
Interest earned on marketable securities held in Trust Account		2,138,122			60,407
Unrealized gain or (loss) on marketable securities held in Trust Account		92,492			(106,693	)
Change in fair value of warrant liabilities		(282,559	)		6,456,397
Net income	$	1,639,651		$	6,036,374
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	$	0.07		$	0.25
Weighted average shares outstanding of Class B ordinary shares non-redeemable shares		4,743,750			4,743,750
Basic and diluted net income per ordinary share, Class B ordinary shares non-redeemable shares	$	0.07		$	0.25

	Class B Ordinary shares				Additional Paid in		Accumulated			Total Shareholders’
	Shares		Amount		Capital		Deficit			Deficit
Balance - December 31, 2022		4,743,750	$	474		—	$	(8,675,042	)	$	(8,674,568	)
Accretion of Class A ordinary shares to redemption value		—		—		—		(2,230,614	)		(2,230,614	)
Net Income		—		—		—		1,639,651			1,639,651
Balance – March 31, 2023		4,743,750	$	474	$	—	$	(9,266,005	)	$	(9,265,531	)

Class A ordinary shares subject to possible redemption as of December 31, 2021	$	193,545,000
Plus:
Adjust carrying value to initial redemption value		2,681,283
Class A ordinary shares subject to possible redemption as of December 31, 2022	$	196,226,283
Adjust carrying value to initial redemption value		2,230,614
Class A ordinary shares subject to possible redemption as of March 31, 2023	$	198,456,897

	For the Three Months ended March 31, 2023				For the Three Months ended March 31, 2022
	Class A		Class B		Class A		Class B
EPS
Numerator: Net Income
Allocation of net income	$	1,311,721	$	327,930	$	4,829,099	$	1,207,275
Denominator: Weighted Average share
Basic and diluted weighted average shares outstanding		18,975,000		4,743,750		18,975,000		4,743,750
Basic and diluted net income per ordinary share	$	0.07	$	0.07	$	0.25	$	0.25

	March 31, 2023		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	$	198,456,897	$	198,456,897	$	—	$	—
Liabilities:
Warrant liabilities – Public Warrants	$	854,824	$	—	$	854,824	$	—
Warrant liabilities – Private Placement Warrants	$	831,173	$	—	$	—	$	831,173

Input	March 31, 2023		December 31, 2022
Risk-free interest rate		—		—
Expected term (years)		5.20		5.20
Expected volatility		—		—
Exercise price	$	11.50	$	11.50
Fair value of Class A ordinary shares	$	10.43	$	10.28

Fair value as of December 31, 2022	$	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
Change in fair value		(184,500	)
Fair value as of September 30, 2022	$	1,014,750
Change in fair value		(322,875	)
Fair value as of December 31, 2022	$	691,875
Change in fair value		139,298
Fair value as of March 31, 2023	$	831,173

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)
10.11		Consulting Agreement, dated as of October 11, 2022, between the Registrant and Richard Leggett (4)

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)

Date: May 12, 2023	BLUE OCEAN ACQUISITION CORP

	By:	/s/ Richard Leggett
	Name:	Richard Leggett
	Title:	Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Matt Lasov
	Name:	Matt Lasov
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

SEC Form 10-Q filed by Blue Ocean Acquisition Corp