BHAV Acquisition Corp 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. References in this report to “we,” “us,” “our” or the “Company” refer to BHAV Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to BHAV Partners LLC. Certain additional capitalized terms used below are defined elsewhere in this report. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Overview We are a blank check company incorporated as a Cayman Islands exempted company and incorporated on September 29, 2025, for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses, which we refer to throughout this report as the “Business Combination.” While we may pursue an initial Business Combination opportunity in any business, industry or geographic location, we intend to capitalize on the ability of its management team and board advisors to identify, acquire and operate a business or businesses that can benefit from their established relationships, and sector management and operating experience. In particular, we currently intend to focus on opportunities that capitalize on the experience and ability of its management team and the individuals that may be appointed as members of our advisory board from time to time (the “board advisors”) to identify, acquire and operate a business in the advanced and industrial robotics, electric-vehicles (“EVs”), drones and unmanned-aerial-systems (“UAS”) or financial technology (“fintech”) industry. We have not selected any Business Combination target, and we have not, nor has anyone on our behalf, initiated any substantive discussions, directly or indirectly, with any Business Combination target. We intend to effectuate our initial Business Combination using cash from the proceeds of our Initial Public Offering and the private placement of private placement units, our shares, debt or a combination of cash, shares and debt. We will have up to 15 months from the closing of the Initial Public Offering to consummate an initial Business Combination. We may also hold a shareholder vote at any time to amend our Articles to modify the amount of time we will have to consummate an initial Business Combination (as well as to modify the substance or timing of our obligation to allow redemption in connection with an initial Business Combination or to redeem 100% of our Public Shares issued in the Initial Public Offering if we have not consummated an initial Business Combination within the time periods described herein or with respect to any other material provisions relating to the rights of holders of Class A ordinary shares or pre-initial Business Combination activity). Following the closing of the Initial Public Offering, an amount of $100,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Units was placed in the Trust Account. The funds in the Trust Account will be invested or held only in either (i) U.S. government treasury bills with a maturity of 185 days or less, or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invest only in direct U.S. government treasury obligations, (ii) as uninvested cash, or (iii) an interest bearing bank demand deposit account or other accounts at a bank. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (which interest shall be net of permitted withdrawals and up to $100,000 of interest to pay dissolution expenses, provided that all withdrawals may only be made from interest and not from the principal held in the Trust Account), to complete our initial Business Combination. Except with respect to permitted withdrawals and/or pay dissolution expenses, the proceeds from the Initial Public Offering and Private Placement Units held in the Trust Account will not be released until the earliest of (a) the completion of our initial Business Combination; (b) the redemption of any of the public shares in connection with any vote on a proposed Business Combination in accordance with the provisions of our Articles; (c) the repurchase of shares by means of a tender offer pursuant to the Articles; (d) the redemption of any of our public shares in connection with a shareholder vote to amend the Articles (i) to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or redeem 100% of its public shares if we do not consummate our initial Business Combination by June 20, 2027 (or such later date if extended), or (ii) with respect to any other provision relating to the rights of the holders of Class A ordinary shares or pre-initial Business Combination activity; and (e) the redemption of all of Public Shares if we are unable to complete or initial Business Combination by June 20, 2027 (or such later date if extended), subject to applicable law and the provisions of the Articles. We have incurred and expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful. 19 Results of Operations and Known Trends or Future Events We have neither engaged in any operations nor generated any revenues to date. Our only activities from September 29, 2025 (inception) through March 31, 2026, were organizational activities, those necessary to prepare for the Initial Public Offering, described below, and subsequent to the Initial Public Offering, identifying a target company for a Business Combination. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company for legal, financial reporting, accounting and auditing compliance, as well as for due diligence expenses in connection with identifying a target company for a Business Combination. For the three months ended March 31, 2026, we had a net income of $12,001, which consists of interest income on marketable securities held in the Trust Account of $87,917 and change in fair value of over-allotment option liability of $31,000, partially offset by general and administrative expenses of $106,597 and interest expense on financed loan liability of $319. Liquidity and Capital Resources On March 20, 2026, we consummated the Initial Public Offering of 10,000,000 Units at $10.00 per Unit, generating gross proceeds of 100,000,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 200,000 Private Placement Units at a price of $10.00 per Private Placement Unit, in a private placement to the Sponsor and the at-risk capital investors, generating gross proceeds of $2,000,000. Following the Initial Public Offering and the sale of the Private Placement Units, a total of $100,000,000 was placed in the Trust Account. Transaction costs amounted to $1,328,871, consisting of $500,000 of cash underwriting fee, $370,000 representing the fair value of the Representative Shares issued to the designee of Maxim and $458,871 other offering costs. As of March 31, 2026, we had cash of $1,027,530 and working capital of $824,519. Further, the Sponsor has agreed to loan up to $500,000 to cover organizational, offering related and post-offering expenses. These loans are evidenced by the Note entered into by and between us and the Sponsor, dated October 24, 2025. Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of the Founder Shares by the Sponsor and loans from our Sponsor under the Note. As of March 31, 2026, we had marketable securities held in the Trust Account of $100,087,917 (including approximately $87,917 of interest earned) consisting of money market funds. We may withdraw interest from the Trust Account as permitted withdrawals to pay income and/or franchise taxes, if any, and up to $100,000 for dissolution expenses. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account, which interest shall be net of permitted withdrawals and up to $100,000 for dissolution expenses, to complete our initial Business Combination. To the extent that our share capital or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies. We intend to use the funds held outside the Trust Account and other sources of available capital, including the Note and any additional loans, primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination, and to pay taxes to the extent the interest earned on the Trust Account is not sufficient to pay our taxes. In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete a Business Combination, we would repay such loaned amounts. In the event that a Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment. We expect our primary liquidity requirements over the next 12 months to include fees and expenses associated with satisfying our financial reporting obligations; legal, accounting, due diligence, travel and other expenses associated with structuring, negotiating and documenting successful business combinations; and general working capital that will be used for miscellaneous expenses, general corporate purposes, liquidation obligations and reserves net of estimated interest income. 20 We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. We expect to satisfy our liquidity requirements with cash on hand and, if necessary, additional loans from our Sponsor under the Note. If our available funds are not sufficient, we may be unable to continue searching for, or conducting due diligence with respect to, prospective target businesses. Moreover, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial Business Combination. Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of our Public Shares upon completion of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. For the three months ended March 31, 2026, cash used in operating activities was $43,141. Net income of $12,001 was affected by the interest earned on marketable securities held in the Trust Account of $87,917, change in fair value of over-allotment option liability of $31,000, payment of general and administrative expenses under the Note of $25,165, prior year pre-payment applied to current year general and administrative expenses of $3,350 and interest expense on financed loan liability of $319. Changes in operating assets and liabilities provided $34,941 of cash for operating activities. For the three months ended March 31, 2026, cash used in investment activities was $100,000,000, which was the amount required to be deposited in the Trust Account from the Initial Public Offering and sale of the Private Placement Units. For the three months ended March 31, 2026, cash provided by financing activities was $101,045,671, which is comprised of the proceeds from the Initial Public Offering and the sale of the Private Placement Units, net of offering costs. Going Concern Consideration At March 31, 2026, the Company had cash of $1,027,530 and working capital of $824,519. Subsequent to the consummation of the Initial Public Offering, the Company’s liquidity has been satisfied through the net proceeds from the consummation of the Initial Public Offering and the sale of the Private Placement Units held outside of the Trust Account. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, provide the Company additional loans to finance transaction costs in connection with an initial Business Combination, except such amounts as may be loaned in accordance with the terms of the Note. Based on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity to meet its needs within one year from the date of issuance of the unaudited condensed financial statements included in this report. Over this time period, we will use the funds held outside of the Trust Account to pay for existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination. Related Party Transactions See “Note 5 – Related Party Transactions” in the unaudited condensed financial statements contained elsewhere in this report. Off-Balance Sheet Arrangements We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2026. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets. 21 Contractual Obligations We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than that certain Administrative Services Agreement, dated March 18, 2026, pursuant to which the Company shall begin accruing payments in an amount equal to $20,000 per month for office space, utilities and secretarial and administrative support, commencing on March 18, 2026, through the earlier of our consummation of an initial Business Combination and our liquidation, which may be paid by us to the Sponsor or an affiliate thereof upon the completion of its initial Business Combination or its liquidation, assuming there is cash available. The Sponsor agreed to loan up to $500,000 to the Company pursuant to the terms of the Note to cover organizational, offering-related and post-offering expenses. These loans underlying the Note are non-interest bearing, unsecured and are due on the date in which we consummate our initial Business Combination or on the date of its dissolution deadline, assuming there is cash available. As of March 31, 2026, we did not owe any amounts to the Sponsor under the Note. Critical Accounting Policies and Estimates The preparation of condensed financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies: Class A Ordinary Shares Subject to Possible Redemption We account for our ordinary shares subject to possible redemption in accordance with ASC 480. Ordinary shares subject to mandatory redemption are classified as a liability instrument and measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside of the shareholders’ equity section of our condensed balance sheets. Net Income Per Ordinary Share We comply with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income per ordinary share is computed by dividing net income by the weighted average number of ordinary shares outstanding during the period, excluding ordinary shares subject to forfeiture. Basic and diluted net income per ordinary share for Class A ordinary shares and Class B ordinary shares is calculated by dividing net income per ordinary share attributable to the Company by the weighted average number of Class A ordinary shares and Class B ordinary shares outstanding, allocated proportionally to each class of ordinary shares. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per ordinary share as the redemption value approximates fair value. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our unaudited condensed financial statements. JOBS Act On April 5, 2012, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, our unaudited condensed financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. 22 Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things: (1) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; (2) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (3) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (4) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officers’ compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of the Initial Public Offering or until we are no longer an “emerging growth company,” whichever is earlier. Item 3. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.