Blue Water Acquisition Corp. III 8-K

What Happened

• Blue Water Acquisition Corp. III (BLUW) announced on January 26, 2026 that it issued a $500,000 convertible unsecured promissory note (the "Working Capital Note") to its sponsor, Yorkville BW Acquisition Sponsor, LLC, to provide additional working capital ahead of an initial business combination (merger/acquisition).
• The note accrues no interest and is payable on the earlier of (a) the closing of the Company’s initial business combination or (b) the date the Company’s winding up is effective. At the sponsor’s option upon consummation of the initial business combination, all or part of the principal may convert into units at $10.00 per unit (rounded down to the nearest whole unit), identical to the private placement units issued in the IPO. The full note is filed as Exhibit 10.1 to the 8-K.

Key Details

• Issuer: Blue Water Acquisition Corp. III; Lender/Sponsor: Yorkville BW Acquisition Sponsor, LLC.
• Principal amount: $500,000 issued January 26, 2026.
• Interest: 0% (principal does not accrue interest).
• Conversion: Sponsor may convert principal upon closing of initial business combination at $10.00 per unit (rounded down), into units identical to IPO private placement units.
• SEC items: Reported under Item 1.01 (material agreement); Item 2.03 (creation of direct financial obligation); Item 3.02 (unregistered sale of equity securities).

Why It Matters

• This provides immediate non-dilutive working capital for the company to pursue and complete an initial business combination, but it also creates a financial obligation of $500,000 on the Company’s balance sheet.
• If the sponsor elects to convert the note at closing, conversion at $10 per unit will issue additional units and dilute existing public shareholders; the filing discloses the conversion mechanism but not the exact number of potential units (depends on conversion elected).
• For retail investors, this is a short-term funding move typical for SPACs that reduces near-term cash risk but may affect post-combination capitalization and ownership if conversion occurs.