Business context and reporting period
Important identity note: The supplied filing is Oxus Acquisition Corp.’s Form 10-Q, not a Borealis Foods Inc. filing. It covers the quarter and six months ended June 30, 2022. Oxus was a shell company formed to pursue a business combination, with a stated focus on energy-transition businesses; it had not begun operations or generated operating revenue.
Financial results and liquidity
| Metric | Three months ended June 30, 2022 | Six months ended June 30, 2022 |
|---|---|---|
| Operating expenses | $537,448 | $1,102,990 |
| Dividend income | $249,903 | $264,263 |
| Net loss | $287,545 | $838,727 |
| Net loss per share | $0.01 | $0.04 |
At June 30, 2022, total assets were $177.19 million, including $176.22 million in the Trust Account and $726,466 of cash outside the Trust Account. Current liabilities were $779,911; reported working capital was approximately $0.19 million. Shareholders’ equity was $194,179. The company reported no long-term debt or off-balance-sheet arrangements.
Operating cash used in the six months was $396,918, compared with $17,918 from inception through June 30, 2021. The prior-year period began at inception and is not directly comparable. No revenue or operating margin was reported; the company had no operating business.
Changes versus the prior comparable period
Second-quarter 2022 net loss was $287,545 versus no activity in the second quarter of 2021. Six-month 2022 net loss of $838,727 compared with an $18,708 loss from inception through June 30, 2021. Oxus attributed 2022 losses to formation and operating costs, partly offset by dividend income from Trust Account assets. Cash outside the Trust Account declined from $1.12 million at December 31, 2021 to $726,466 at June 30, 2022.
Outlook, risks and unusual items
- Management said the company must complete a business combination or obtain an extension by March 8, 2023; otherwise, mandatory liquidation and dissolution could follow. Management identified substantial doubt about the company’s ability to continue as a going concern.
- Oxus said additional working-capital financing may be needed. Its sponsor and related parties could provide loans but were not obligated to do so; no working-capital loans were outstanding at quarter-end.
- The $176.22 million Trust Account was intended for a business combination or redemption of public shares, and was not equivalent to unrestricted operating cash. Public shareholders had redemption rights under the stated terms; warrants would expire worthless if no business combination were completed within the applicable period.
- Potential adverse factors cited included COVID-19, Russia-Ukraine conflict and related sanctions, and broader market and geopolitical volatility, which could impair the search for or completion of a transaction.
- Disclosure controls were deemed ineffective due to a material weakness in accounting for complex financial instruments. Management reported additional analysis and planned remediation, but gave no assurance it would be successful.
- The filing reports a business-combination advisory fee of up to $5.23 million payable upon completion, and no legal proceedings. It reported no material changes to previously disclosed risk factors.
Most important facts to verify
- Confirm the filing belongs to the intended issuer: this document identifies Oxus Acquisition Corp., not Borealis Foods Inc.
- Verify the business-combination deadline, any extension, and the transaction status subsequent to June 30, 2022.
- Assess available unrestricted cash and potential funding needs separately from Trust Account assets.
- Review the complex-financial-instrument control weakness and the progress and effectiveness of remediation.
- Confirm the terms and potential impact of shareholder redemptions, the advisory fee, and any future financing or transaction-related dilution.