OACC 10-Q
Oaktree Acquisition Corp. III Life Sciences (OACC)
Table of Contents
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
one-fifth of one redeemable warrant |
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| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | ☒ | ||||
| ☒ | ||||||
Table of Contents
OAKTREE ACQUISITION CORP. III LIFE SCIENCES
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2026
TABLE OF CONTENTS
Table of Contents
June 30, 2026 (unaudited) |
December 31, 2025 |
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| ASSETS |
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| Current assets |
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| Cash |
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| Prepaid expenses |
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| Total current assets |
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| Cash held in Trust Account |
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| TOTAL ASSETS |
$ |
$ |
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| LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT |
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| Current liabilities |
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| Accounts payable and accrued expenses |
$ | $ | ||||||
| Due to related party |
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| Promissory note - |
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| Total current liabilities |
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| Deferred legal fees |
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| Deferred underwriting fee payable |
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| Total Liabilities |
$ |
$ |
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| Commitments and Contingencies (Note 5) |
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| Class A ordinary shares subject to possible redemption, $0.0001 par value; shares issued and outstanding as of June 30, 2026 and December 31, 2025; at redemption value of $ |
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| Shareholders’ Deficit |
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| Preference shares, $ |
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| Class A ordinary shares, $ shares issued and outstanding (excluding |
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| Class B ordinary shares, $ |
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| Additional paid-in capital |
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| Accumulated deficit |
( |
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| Total Shareholders’ Deficit |
( |
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( |
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| TOTAL LIABILITIES, CLASS A ORDINARY SHARES SUBJECT TO POSSIBLE REDEMPTION AND SHAREHOLDERS’ DEFICIT |
$ |
$ |
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For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
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2026 |
2025 |
2026 |
2025 |
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| General and administrative expenses |
$ | $ | $ | $ | ||||||||||||
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| Loss from operations |
( |
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( |
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( |
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( |
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| Other Income |
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| Interest earned on cash held in Trust Account |
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| Total other income |
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| Net Income |
$ |
$ |
$ |
$ |
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| Weighted average shares outstanding of redeemable Class A ordinary shares |
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| Basic and diluted net income per share, Class A ordinary shares |
$ |
$ |
$ |
$ |
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| Weighted average shares outstanding of non-redeemable Class A and Class B ordinary shares |
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| Basic and diluted net income per share, non-redeemable Class A ordinary shares and Class B ordinary shares |
$ |
$ |
$ |
$ |
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Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total Shareholders’ Deficit |
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Shares |
Amount |
Shares |
Amount |
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Balance – January 1, 2026 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Accretion for Class A ordinary shares subject to redemption |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net income |
— | — | ||||||||||||||||||||||||||
Balance – March 31, 2026 (unaudited) |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Accretion for Class A ordinary shares subject to redemption |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net income |
— | — | ||||||||||||||||||||||||||
Balance – June 30, 2026 (unaudited) |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Class A Ordinary Shares |
Class B Ordinary Shares |
Additional Paid-in |
Accumulated |
Total Shareholders’ |
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Shares |
Amount |
Shares |
Amount |
Capital |
Deficit |
Deficit |
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Balance - January 1, 2025 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Accretion for common stock to redemption amount |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net income |
— | — | ||||||||||||||||||||||||||
Balance – March 31, 2025 (unaudited) |
$ |
$ |
$ | $ |
( |
) |
$ |
( |
) | |||||||||||||||||||
Accretion for common stock to redemption amount |
— | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net income |
— | — | ||||||||||||||||||||||||||
Balance – June 30, 2025 (unaudited) |
$ |
$ |
$ | $ |
( |
) |
$ |
( |
) | |||||||||||||||||||
For the Six Months Ended June 30, |
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2026 |
2025 |
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Cash Flows from Operating Activities: |
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Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash used in operating activities: |
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Interest earned on cash held in Trust Account |
( |
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Changes in operating assets and liabilities: |
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Prepaid expenses |
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Long-term prepaid insurance |
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Accounts payable and accrued expenses |
( |
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Accrued offering costs |
( |
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Due to related party |
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Net cash used in operating activities |
( |
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( |
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Cash Flows from Investing Activities: |
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Cash withdrawn from Trust Account for working capital purposes |
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Net cash provided by investing activities |
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Net Change in Cash |
( |
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Cash – Beginning of period |
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Cash – End of period |
$ |
$ |
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| • | 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. |
| Gross proceeds |
$ | |||
| Less: |
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| Proceeds allocated to Public Warrants |
( |
) | ||
| Proceeds allocated to over-allotment liability |
( |
) | ||
| Class A ordinary shares issuance costs |
( |
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| Plus: |
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| Accretion for ordinary shares to redemption amount |
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| Class A ordinary shares subject to possible redemption, December 31, 2024 |
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| Plus: |
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| Accretion for ordinary shares to redemption amount |
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| Class A ordinary shares subject to possible redemption, December 31, 2025 |
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| Plus: |
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| Accretion for ordinary shares to redemption amount |
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| Class A ordinary shares subject to possible redemption, March 31, 2026 |
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| Plus: |
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| Accretion for ordinary shares to redemption amount |
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| Class A ordinary shares subject to possible redemption, June 30, 2026 |
$ |
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For the Three Months Ended June 30, 2026 |
For the Six Months Ended June 30, 2026 |
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Redeemable Class A ordinary shares |
Non-Redeemable Class A ordinary shares and Class B ordinary shares |
Redeemable Class A ordinary shares |
Non-Redeemable Class A ordinary shares and Class B ordinary shares |
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| Basic and diluted net income per ordinary share |
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| Numerator: |
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| Allocation of net income |
$ | $ | $ | $ | ||||||||||||
| Denominator: |
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| Basic and diluted weighted average shares outstanding |
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| Basic and diluted net income per ordinary share |
$ |
$ |
$ |
$ |
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For the Three Months Ended June 30, 2025 |
For the Six Months Ended June 30, 2025 |
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Redeemable Class A ordinary shares |
Non-Redeemable Class A ordinary shares and Class B ordinary shares |
Redeemable Class A ordinary shares |
Non-Redeemable Class A ordinary shares and Class B ordinary shares |
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| Basic and diluted net income per ordinary share |
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| Numerator: |
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| Allocation of net income |
$ | $ | $ | $ | ||||||||||||
| Denominator: |
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| Basic and diluted weighted average shares outstanding |
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| Basic and diluted net income per ordinary share |
$ |
$ |
$ |
$ |
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| • | in whole and not in part; |
| • | at a price of $ |
| • | upon a minimum of 30 days’ prior written notice of redemption, which is referred to as the 30-day redemption period; and |
| • | if, and only if, the last reported sale price of the Class A ordinary shares equals or exceeds $ |
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
| Level 3: | Unobservable inputs based on assessment of the assumptions that market participants would use in pricing the asset or liability. | |
October 25, 2024 |
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Underlying stock price |
$ | |||
Exercise price |
$ | |||
Term (years) |
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Risk-free rate |
% | |||
Volatility |
% | |||
Market probability risk factor |
% | |||
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
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2026 |
2025 |
2026 |
2025 |
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General and administrative expenses |
$ | $ | $ | $ | ||||||||||||
Interest earned on cash held in Trust Account |
$ | $ | $ | $ | ||||||||||||
June 30, 2026 |
December 31, 2025 |
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Cash |
$ | $ | ||||||
Cash held in Trust Account |
$ | $ | ||||||
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this Quarterly Report on Form 10-Q (the “Report”) to “we,” “us” or the “Company” refer to Oaktree Acquisition Corp. III Life Sciences. References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to Oaktree Acquisition Holdings III LS, LLC. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements for the quarter ended June 30, 2026 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, as further described in the section below entitled “Cautionary Note Regarding Forward-Looking Statements.”
Cautionary Note Regarding Forward-Looking Statements
This Report, including, without limitation, statements under “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the words “may,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “continue,” “intends,” “will,” “potential,” “projects,” or “predicts,” or, in each case, the negative of such terms or other similar terms or similar expressions.
The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of known and unknown risks, uncertainties (some of which are beyond our control) or other assumptions that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. The following include some but not all of the factors, risks or uncertainties (some of which are beyond our control) that could cause actual results or events to differ from those anticipated:
| • | we have no operating history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective; |
| • | our ability to select an appropriate target business or businesses; |
| • | our ability to complete our initial business combination; |
| • | our expectations around the performance of a prospective target business or businesses; |
| • | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination; |
| • | our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business or in approving our initial business combination; |
| • | our potential ability to obtain additional financing to complete our initial business combination; |
| • | our pool of prospective target businesses; |
| • | the amount of redemptions by our public shareholders in connection with amendments to our amended and restated memorandum and articles of association or the consummation of a business combination; |
| • | our ability to consummate an initial business combination due to the uncertainty resulting from general economic and political conditions such as recessions, interest rates, international currency fluctuations and health epidemics and pandemics, inflation, changes in diplomatic and trade relationships (including changes in international trade policies, tariffs and treaties affecting imports and exports or acquisition or disposition of assets in different countries) and acts of war or terrorism (including the military conflict that started between the Russian Federation, Belarus and Ukraine in February 2022 or other geopolitical tensions, such as an escalation of the conflict in the Middle East); |
| • | the ability of our officers and directors to generate a number of potential business combination opportunities; |
| • | our public securities’ potential liquidity, volatility and trading; |
| • | the use of proceeds not held in the trust account or available to us from interest income on the trust account balance; |
| • | the trust account not being subject to claims of third parties; |
| • | our financial performance; and |
| • | the other risks and uncertainties discussed herein and in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 26, 2026. |
Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. All forward-looking statements speak only as of the date of this Report and are expressly qualified in their entirety by the risk factors and cautionary statements included in this Report. Except as is required by law, we expressly disclaim any obligation to publicly release any revisions to forward-looking statements to reflect events after the date of this Report.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Report, and while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have respectively conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely on these statements.
17
Table of Contents
Overview
We are a blank check company incorporated on June 28, 2024 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the sale of the private placement units to our sponsor in connection with our initial public offering, as well as our shares, debt or a combination of cash, equity and debt.
We 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.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception to June 30, 2026 were organizational activities, those necessary to prepare for the initial public offering, described below, and, after 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 business combination. We generate non-operating income in the form of interest income on cash held in the Trust Account in the form of demand deposit 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 completing a business combination.
For the three months ended June 30, 2026, we had a net income of $1,604,621, which consists of interest earned on cash held in the trust account of $1,866,579, offset by general and administrative expenses of $261,958.
For the six months ended June 30, 2026, we had a net income of $2,998,742, which consists of interest earned on cash held in the trust account of $3,717,238, offset by general and administrative expenses of $718,496.
For the three months ended June 30, 2025, we had a net income of $1,874,343, which consists of interest earned on cash held in the trust account of $2,144,153, offset by operating costs of $269,810.
For the six months ended June 30, 2025, we had a net income of $3,533,134, which consists of interest earned on cash held in the trust account of $4,247,746, offset by operating costs of $714,612.
Liquidity and Capital Resources and Going Concern
On October 25, 2024, we completed our initial public offering of 17,500,000 units, at $10.00 per unit, generating proceeds of $175,000,000.
Simultaneously with the closing of the initial public offering, we consummated the sale of 550,000 private placement units at a price of $10.00 per private placement unit in a private placement to the Sponsor, generating gross proceeds of $5,500,000.
Simultaneously with the closing of the partially exercised over-allotment option by the underwriters on October 30, 2024, the Sponsor purchased 33,981 private placement units, at a price of $10.00 per private placement unit, for an aggregate purchase price of $339,810.
Following the initial public offering, the partial exercise of the over-allotment option, and the sale of the private placement units, a total of $191,990,290 was placed in the trust account. We incurred transaction costs of $11,587,475, consisting of $3,839,806 of cash underwriting fees, $6,719,660 of deferred underwriting fees, and $1,028,009 of other offering costs.
For the six months ended June 30, 2026, net cash used in operating activities was $255,295. Net income of $2,998,742 was impacted by interest earned on cash held in the trust account of $3,717,238. Changes in operating assets and liabilities provided $463,201 of cash from operating activities.
For the six months ended June 30, 2025, net cash used in operating activities was $221,685. Net income of $3,533,134 was impacted by interest earned on cash held in the trust account of $4,247,746. Changes in operating assets and liabilities provided $492,927 of cash from operating activities. For the six months ended June 30, 2025, cash flows from investing activities were $250,000.
As of June 30, 2026, we had cash of $205,280,770 held in the trust account. We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the funds held in the trust account (less permitted withdrawals and deferred underwriting commissions) to complete a business combination. To the extent that our shares or debt are used, in whole or in part, as consideration to complete an initial business combination, the remaining proceeds held in the trust account will be used as working capital to finance the operations of the post-business combination entity.
As of June 30, 2026, we had cash of $1,179,670 outside of the trust account. We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, properties 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, as well as pay our advisors.
In order to fund working capital deficiencies or finance transaction costs in connection with a business combination, the Sponsor or an affiliate of the Sponsor or certain of our officers and directors 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 the trust account would be used for such repayment. Up to $1,500,000 of such loans are convertible at the option of the lender into private placement units identical to the private placement units sold to the Sponsor in connection with our initial public offering, at a conversion price of $10.00 per unit.
18
Table of Contents
As described in other parts of this Report, we may make permitted withdrawals from the trust account. Permitted withdrawals are amounts withdrawn or eligible to be withdrawn from the trust account to fund our working capital requirements, subject to an annual limit of $250,000 (plus the rollover of unused amounts from prior years), and/or to pay our taxes (any withdrawals to pay for our taxes (which shall exclude the Excise Tax if any is imposed on us) shall not be subject to the $250,000 annual limitation described in the foregoing); provided that such withdrawals can only be made from interest earned on the funds held in the trust account and not from the principal held in the trust account.
In connection with the Company’s assessment of going concern considerations in accordance with Accounting Standards Codification (“ASC”) 205-40, “Presentation of Financial Statements – Going Concern,” the Company has determined that it has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. The Company may need to raise additional capital through loans or additional investments from the Sponsor, shareholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential business combination, and reducing overhead expenses. There is no assurance that the Company’s plans to raise additional capital will be successful. The Company has until October 25, 2026, to consummate a business combination. If a business combination is not consummated by then, the Company may, however, elect to seek to extend the period during which we may consummate a business combination consistent with applicable laws, regulations and stock exchange rules. Such an extension will require the approval of the Company’s shareholders, who will be provided the opportunity at that time to redeem all or a portion of their public shares, which would likely have a material adverse effect on the amount held in the trust account and other adverse effects on the Company. Should a business combination not occur, there may be a mandatory liquidation of the trust account and subsequent dissolution of the Company. Such potential liquidity shortfalls and mandatory liquidation condition raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s unaudited condensed financial statements contained in this Report do not include any adjustments that might result from the outcome of these uncertainties.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities that would be considered off-balance sheet arrangements as of June 30, 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.
Contractual Obligations
Administrative Services and Indemnification Agreement
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor or one of its affiliates for office space, secretarial and administrative services provided to the Company in the amount of $25,000 per month. We began incurring these fees on October 23, 2024 and will continue to incur these fees monthly until the earlier of the completion of the business combination and our liquidation. In addition, we have agreed, pursuant to the administrative services and indemnification agreement with the Sponsor, that we will indemnify the Sponsor and its affiliates, including Oaktree Capital Management, L.P., an affiliate of the Sponsor, and its affiliates (“Oaktree”), from any liability arising with respect to their activities in connection with our affairs, including, but not limited to, any claims, made by us or a third party, (i) arising out of or relating to our initial public offering or our operations or conduct of our business, (ii) in respect of any investment opportunities sourced by the Sponsor and its affiliates, including Oaktree, and/or (iii) against the Sponsor and/or Oaktree alleging any expressed or implied management or endorsement by the Sponsor and/or Oaktree of any of our activities or any express or implied association between the Sponsor and/or Oaktree, on the one hand, and us or any of our other affiliates, on the other hand, which agreement provides that the indemnified parties cannot access the funds held in the trust account.
Underwriting Agreement
The underwriters were entitled to an underwriting discount of $0.20 per public unit, or $3,839,806 in the aggregate, $3,500,000 of which was paid on October 25, 2024 and $339,806 of which was paid on October 30, 2024 in connection with the closing of the partially exercised over-allotment option granted to the underwriters of our initial public offering. In addition, in connection with the closing of the initial public offering on October 25, 2024 and the closing of the partially exercised over-allotment option on October 30, 2024, $0.35 per public unit sold, or $6,719,660 in the aggregate, became payable to the underwriters for deferred underwriting commissions. The deferred underwriting fee will be payable to the underwriters from the amounts held in the trust account solely in the event that the Company completes a business combination, subject to the terms of the underwriting agreement.
Due to the partial exercise of the over-allotment option and forfeiture of the remaining option by the underwriters on October 30, 2024, the Sponsor forfeited 231,492 founder shares at no cost to the Company.
19
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Registration and Shareholder Rights Agreement
We entered into a registration and shareholder rights agreement in connection with our initial public offering pursuant to which the Sponsor, and its permitted transferees, if any, are entitled to certain registration rights with respect to the securities they hold or may acquire, including the Class A ordinary shares into which founder shares are convertible and the securities included in the private placement units (including any private placement units that may be issued upon conversion of working capital loans), and any Class A ordinary shares issuable upon conversion of private placement warrants. The Sponsor is entitled to make up to three demands, excluding short form demands, that we register such securities. In addition, the Sponsor has certain “piggyback” registration rights with respect to registration statements filed subsequently to the completion of our initial business combination. We will bear the expenses incurred in connection with the filing of any such registration statements. Further, pursuant to such agreement, the Sponsor, upon and following consummation of an initial business combination, is also entitled to nominate three individuals for election to our board of directors, as long as the Sponsor holds any securities covered by the registration and shareholder rights agreement.
For more information on contractual obligations and related party transactions, see Note 4 and Note 5 in the notes to the unaudited condensed financial statements contained elsewhere in this Report.
Critical Accounting Policies
The preparation of the unaudited condensed financial statements contained in this Report and related disclosures in conformity with accounting principles generally accepted in the United States of America 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 unaudited condensed 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:
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 and recorded the warrant instruments under equity treatment at their assigned values. Such guidance provides that the warrants described above are not precluded from equity classification. Equity-classified contracts are initially measured at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity in accordance with ASC 480 and ASC 815.
Class A Redeemable Share Classification
The public shares contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, certain amendments to the Company’s amended and restated memorandum and articles of association 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 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.
Net Income Per Ordinary Share
The Company complies 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 for the period. The Company has two classes of ordinary shares, which are referred to as Class A ordinary shares and Class B ordinary shares. Income and losses are shared pro rata between the two classes of shares. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates fair value.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying unaudited condensed financial statements contained in this Report.
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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.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2026. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective. Accordingly, management believes that the unaudited condensed financial statements included in this Report present fairly in all material respects our financial position, results of operations and cash flows for the periods presented.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Report.
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| OAKTREE ACQUISITION CORP. III LIFE SCIENCES | ||||||
| Date: August 12, 2026 | By: | /s/ Zaid Pardesi | ||||
| Name: | Zaid Pardesi | |||||
| Title: | Chief Executive Officer | |||||
| (Principal Executive Officer) | ||||||
| Date: August 12, 2026 | By: | /s/ George A. Martinez | ||||
| Name: | George A. Martinez | |||||
| Title: | Chief Financial Officer | |||||
| (Principal Financial and Accounting Officer) | ||||||
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