Company: BLUWU
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024010
Chunk: 71

Company: Blue Water Acquisition Corp. III
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 71
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 and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC
Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than
not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the
Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as
income tax expense. As of June 30, 2025, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. The
Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from
its position.

The
Company is considered to be a Cayman Islands exempted company with no connection to any other taxable jurisdiction and is presently not
subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax
provision was zero for the period presented.

Class
A Ordinary Shares Subject to Possible Redemption

The
Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s
liquidation, or if there is a shareholder vote or tender offer in connection with the Company’s initial Business Combination. In
accordance with ASC 480-10-S99, the Company classifies Public Shares subject to possible redemption outside of permanent equity as the
redemption provisions are not solely within the control of the Company. The Company recognizes changes in redemption value immediately
as they occur and will adjust the carrying value of redeemable shares to equal the redemption value at the end of each reporting period.
Immediately upon the closing of the Initial Public Offering, the Company recognized the accretion from initial book value to redemption
value. The change in the carrying value of redeemable shares will result in charges against additional paid-in capital (to the extent
available) and accumulated deficit. Accordingly, as of June 30, 2025, Class A ordinary shares subject to possible redemption are presented
at redemption value as temporary equity, outside of the shareholders’ deficit section of the Company’s balance sheet. As
of June 30, 2025, the Class A ordinary shares subject to