Company: BLUWU
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024010
Chunk: 67

Company: Blue Water Acquisition Corp. III
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 67
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, respectively.

    7 

Cash
Held in Trust Account

As
of June 30, 2025 and December 31, 2024, the assets held in Trust Account, amounting to $253,556,881
and $0, respectively, were held in cash in a demand deposit account.

Offering
Costs Associated with the Initial Public Offering

The
Company complies with the requirements of the ASC 340-10-S99 and SEC Staff Accounting Bulletin Topic 5A, “Expenses of Offering.”
Offering costs consist principally of professional and registration fees that are related to the Initial Public Offering. FASB ASC 470-20,
“Debt with Conversion and Other Options,” addresses the allocation of proceeds from the issuance of convertible debt into
its equity and debt components. The Company applies this guidance to allocate Initial Public Offering proceeds from the Units between
Class A ordinary shares and Warrants, using the residual method by allocating Initial Public Offering proceeds first to assigned value
of the Warrants and then to the Class A ordinary shares. Offering costs allocated to the Class A ordinary shares were charged to temporary
equity, and offering costs allocated to the Public Warrants and Private Placement Units were charged to shareholders’ deficit as
Public Warrants and Private Placement Warrants after management’s evaluation were accounted for under equity treatment.

Warrant
Instruments

The
Company accounts for the Public Warrants and Private Placement Warrants issued in connection with the Initial Public Offering and the
private placement in accordance with the guidance contained in FASB ASC Topic 815, “Derivatives and Hedging”. Accordingly,
the Company evaluated classified the warrant instruments under equity treatment at their relative fair values.

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,” approximate the carrying amounts represented in the balance sheet, primarily due to their 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. U.S. 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