Company: BACC
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001185185-25-001689
Chunk: 13

Company: Blue Acquisition Corp/Cayman
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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Class A ordinary shares and Public Rights, using the residual method by allocating Initial Public Offering proceeds first to assigned
value of the Public Rights and then to the Class A ordinary shares. Offering costs allocated to Public Shares were charged to temporary
equity, and offering costs allocated to Public Rights (as defined below) and Private Placement Units were charged to shareholders’
equity as the Public Rights and Private Placement Rights, after management’s evaluated that the Public Rights and Private Placement
Units should be accounted for under equity treatment.

Fair
Value of Financial Instruments

The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair
Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet, primarily due to its short-term
nature.

Fair
value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction
between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

●Level
1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

●Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices
for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

●Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Net
Income (Loss) Per Ordinary Share

The
Company has two classes of shares, non-redeemable Class A ordinary shares and Class B ordinary shares (the “non-redeemable shares”)
and redeemable Class A ordinary shares (the “redeemable shares”). Non-redeemable shares are the Class A ordinary shares underlying
the Private Placement Units sold in the private placement and do not have redemption rights to the amounts held in the Trust Account.
Class B ordinary shares are the founder shares which do not have redemption rights on the amounts held