Filing identity and business context
Important identity note: The supplied filing is Oxus Acquisition Corp.’s Form 10-Q, not a filing by Borealis Foods Inc. It covers the quarter and nine months ended September 30, 2022; the financial statements are unaudited.
Oxus was a blank-check company seeking a business combination, with a stated focus on energy-transition targets in emerging and frontier markets. It had not commenced operations and had no operating revenue. Its principal asset was the cash and investments held in trust for a future transaction or shareholder redemptions.
Financial results and liquidity
| Metric | Period or date | Reported amount |
|---|---|---|
| Operating revenue | Quarter and nine months ended September 30, 2022 | None |
| Net loss | Third quarter 2022 | $227,256, versus $7,301 in third quarter 2021 |
| Net loss | Nine months ended September 30, 2022 | $1,065,983 |
| Formation and operating expenses | Third quarter / nine months 2022 | $1,037,536 / $2,140,526 |
| Dividend, interest and foreign-exchange income | Nine months ended September 30, 2022 | $1,059,872 / $1,787 / $12,884 |
| Cash and trust investments | September 30, 2022 | $519,758 outside trust; $177,013,836 in trust |
| Total assets / current liabilities | September 30, 2022 | $177,756,532 / $1,571,382 |
| Shareholders’ deficit | September 30, 2022 | $828,686 |
| Cash flow from operations | Nine months ended September 30, 2022 | Cash used of $666,752 |
Margins are not meaningful because Oxus reported no operating revenue. The filing reports no long-term debt. A Sponsor promissory note allowing borrowings of up to approximately $1.5 million had no outstanding balance at quarter-end; $58,640 was payable to a related party. Management reported a working-capital deficiency of approximately $0.83 million.
Changes, outlook and key risks
- Compared with the prior-year third quarter, the net loss increased to $227,256 from $7,301, primarily reflecting much higher operating expenses; dividend income partly offset those expenses. The prior-year nine-month figure covers inception through September 30, 2021, so it is not a like-for-like nine-month comparison.
- Cash outside the trust declined from $1,123,384 at December 31, 2021 to $519,758 at September 30, 2022. Trust investments rose from $175,953,964 to $177,013,836.
- Management said substantial doubt existed about Oxus’s ability to continue as a going concern. It had until March 8, 2023 to complete a business combination or obtain an extension; failure to do so could lead to liquidation. Management said additional financing might be needed, but Sponsor and other related parties were not obligated to provide it.
- If Oxus failed to complete a business combination within the permitted period, public shares were subject to redemption from the trust, while warrants would expire worthless. The filing describes an initial expected redemption amount of $10.20 per public share, subject to trust income and permitted deductions.
- Risks discussed include the Russia-Ukraine conflict and related sanctions and market volatility, COVID-19 uncertainty, and possible U.S. foreign-investment restrictions or CFIUS review of a U.S. target, which could delay or prevent a transaction.
- Disclosure controls were deemed ineffective as of September 30, 2022 because of a material weakness in accounting for complex financial instruments. Management described remediation efforts but gave no assurance they would be effective.
- A business-combination marketing fee of up to $5.23 million was contingent on closing a transaction. The filing reported no legal proceedings and no off-balance-sheet arrangements.
Important facts for investors to verify
- Confirm the registrant: this is Oxus Acquisition Corp., not Borealis Foods Inc.
- Check whether Oxus completed a business combination or obtained an extension before the March 8, 2023 deadline, and the resulting treatment of public shares and warrants.
- Review subsequent filings for changes in cash needs, related-party funding, trust balances and redemption amounts.
- Assess remediation of the disclosed material weakness and any subsequent changes to internal controls.
- Review the terms and status of any proposed transaction, including potential CFIUS or other regulatory approvals and the contingent advisory fee.