Borealis Foods Inc. quarterly report, Q1 FY2023

Filing identity and business context

Important: The supplied filing is Oxus Acquisition Corp.’s Form 10-Q for the quarter ended March 31, 2023—not Borealis Foods Inc.’s operating-company 10-Q. Oxus was a blank-check company seeking a business combination; it reported no operating revenue or business operations. Its results should not be read as Borealis’s financial results.

Oxus entered into a business combination agreement with Borealis on February 23, 2023. The proposed transaction contemplated Oxus continuing as an Ontario corporation and Borealis shareholders receiving shares based on a stated Borealis value of $150 million less Borealis’s net indebtedness, divided by $10 per share. The transaction was subject to closing conditions and was not completed as of the reporting date.

Financial results and liquidity

MetricQ1 2023Q1 2022 / comparison
Operating revenueNoneNone
Formation and operating expenses$2.12 million$0.57 million; increased about 275%
Dividend income$1.40 million$14,360
Net loss$0.73 million$0.55 million; loss increased about 32%
Net loss per share$0.04$0.03
Cash used in operating activities$0.64 million$0.17 million

At March 31, 2023, Oxus reported $64,004 cash outside the trust account and $20.77 million of trust-account securities, compared with $680,792 and $178.53 million, respectively, at December 31, 2022. Total assets were $20.85 million. Current liabilities were $3.98 million, including $2.12 million accrued offering costs and expenses and a $1.80 million related-party promissory note. Management reported a $3.89 million working capital deficiency. The filing reports no long-term debt or operating lease obligations.

Trust-account assets fell primarily after public shareholders redeemed 15,300,532 shares for approximately $159.34 million at about $10.41 per share in connection with the March 2 extension vote. Remaining Class A shares subject to possible redemption were 1,949,468 at March 31.

Material developments, outlook, and risks

  • Shareholders extended Oxus’s business-combination deadline from March 8 to December 8, 2023. If no business combination is completed by then and no further extension is obtained, Oxus must liquidate and redeem public shares; warrants would expire worthless.
  • The Sponsor’s amended, non-interest-bearing note was increased to a maximum of $3.5 million. $1.8 million was outstanding at March 31; a further $0.3 million was drawn on May 18, bringing the balance to $2.1 million. The note is payable upon a business combination.
  • Management stated that limited operating cash, the need for additional financing, and the potential mandatory liquidation raise substantial doubt about Oxus’s ability to continue as a going concern. Sponsor and other insider financing is not assured.
  • Upon a business-combination closing, Oxus would owe a $5.23 million advisory fee, plus a contingent legal fee of up to $0.2 million. These amounts could affect funds available for the transaction.
  • Disclosure controls were deemed ineffective as of March 31 because of a material weakness in accounting for complex financial instruments. Management said it was pursuing remediation but could not assure its success.
  • The filing cited COVID-19, geopolitical conflict, sanctions, and broader market uncertainty as potential risks to completing a business combination. No material changes to the previously disclosed risk factors were reported.

Key investor verification points

  1. Confirm the status and final terms of the Oxus–Borealis transaction, including required approvals, closing conditions, and any amendments.
  2. Verify Borealis’s standalone financial statements and net indebtedness; this filing does not provide a clear value for Borealis’s financial metrics.
  3. Check Oxus’s remaining trust funds, redemptions, sponsor-note balance, and available operating cash after March 31, 2023.
  4. Assess whether Oxus obtained an extension or completed a transaction before the December 8, 2023 deadline.
  5. Review remediation of the disclosed internal-control material weakness and the contingent transaction fees and other closing costs.