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, 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 May 10, 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 MARCH 31, 2022

TABLE OF CONTENTS

	Page
Part I. Financial Information	3
Item 1. Interim Financial Statements	3
Condensed Balance Sheets	3
Unaudited Condensed Statement of Operations	4
Unaudited Condensed Statement Changes in Stockholders’ Deficit	5
Unaudited Condensed Statement of Cash Flows	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

	March 31, 2022			December 31, 2021
	(Unaudited)
Assets
Current Assets:
Cash	$	882,587		$	1,050,670
Prepaid expenses and other assets		322,207			285,020
Total current assets		1,204,794			1,335,690
Non-current assets
Other assets		171,667			236,041
Marketable securities held in trust account		193,503,647			193,549,933
Total assets	$	194,880,108		$	195,121,664

Liabilities and Shareholders’ Deficit
Current Liabilities:
Accounts payable and accrued expenses	$	309,424		$	139,852
Accrued offering costs		—			11,105
Accounts Payable – Related Party		20,000			—
Total current liabilities		329,424			150,957
Accrued offering costs, non-current		806,823			806,823
Warrant liabilities		6,173,228			12,629,625
Deferred underwriting fee payable		6,641,250			6,641,250
Total liabilities		13,950,725			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		193,545,000			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		(12,616,091	)		(18,652,465	)
Total shareholders’ deficit		(12,615,617	)		(18,651,991	)
Total Liabilities and Shareholders’ Deficit	$	194,880,108		$	195,121,664

General and administrative expenses	$	373,737
Loss from operations		(373,737	)

Other Income (expense):
Interest earned on marketable securities held in Trust Account		60,407
Unrealized loss on marketable securities held in Trust Account		(106,693	)
Change in fair value of warrant liabilities		6,456,397
Net income	$	6,036,374
Weighted average shares outstanding of Class A redeemable ordinary shares		18,975,000
Basic and diluted net income per ordinary share, Class A redeemable ordinary shares	$	0.25
Weighted average shares outstanding of Class B ordinary shares non-redeemable shares		4,743,750
Basic and diluted net income per ordinary share, Class B ordinary shares non-redeemable shares	$	0.25

	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	)

Cash Flow from Operating Activities:
Net income	$	6,036,374
Adjustments to reconcile net income to net cash used in operating activities:
Interest earned on marketable securities held in Trust Account		(60,407	)
Unrealized loss on marketable securities held in Trust Account		106,693
Change in fair value of warrant liabilities		(6,456,397	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(37,187	)
Other assets, non-current		64,375
Accounts payable and accrued expenses		169,571
Accounts Payable – Related Party		20,000
Net cash used in operating activities		(156,978	)

Cash flows from financing activities:
Payment of offering costs		(11,105	)
Net cash provided by financing activities		(11,105	)
Net change in cash		(168,083	)
Cash at the beginning of the period		1,050,670
Cash at the end of the period	$	882,587
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Deferred underwriting fee payable	$	6,641,250

	For the Three Months ended March 31, 2022
	Class A		Class B
Basic and diluted net income per share
Numerator:
Allocation of net income, as adjusted	$	4,829,099	$	1,207,275
Denominator:
Basic and diluted weighted average ordinary shares outstanding		18,975,000		4,743,750
Basic and diluted net income per ordinary share	$	0.25	$	0.25

	March 31, 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	$	193,503,647	$	193,503,647	$	—	$	—
Liabilities:
Warrant liabilities – Public Warrants	$	3,128,978	$	3,128,978	$	—	$	—
Warrant liabilities – Private Placement Warrants	$	3,044,250	$	—	$	—	$	3,044,250

	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	March 31, 2022			December 31, 2021
Risk-free interest rate		2.40	%		1.28	%
Expected term (years)		5.20			5.20
Expected volatility		4.88	%		12.40	%
Exercise price	$	11.50		$	11.50
Fair value of Class A ordinary shares	$	9.90		$	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

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 Chief Executive 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
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 Executive 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)

*	Filed herewith
**	Furnished herewith
(1)	Incorporated by reference to Registration Statement on Form S-1 filed with the Securities & Exchange Commission on November 9, 2021.
(2)	Incorporated by reference to Registration Statement on Form S-1 filed with the Securities & Exchange Commission on November 19, 2021.
(3)	Incorporated by reference to Current Report on Form 8-K filed with the Securities & Exchange Commission on December 8, 2021.

	blue ocean acquisition corp

Date: May 12, 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