Borealis Foods Inc. quarterly report, Q3 FY2021

Filing identity and reporting period

Important identity mismatch: The request identifies Borealis Foods Inc., but the supplied Form 10-Q is for Oxus Acquisition Corp., a Cayman Islands SPAC. The figures and disclosures below describe Oxus, not Borealis Foods.

This unaudited 10-Q covers the quarter ended September 30, 2021. Oxus was incorporated on February 3, 2021, and completed its IPO in September 2021. It had not begun operating activities and was searching for a business combination, with a stated focus on energy-transition technologies in emerging and frontier markets.

Financial results and position

At September 30, 2021, total assets were $177.7 million, including $175.95 million held in trust and $1.75 million of cash outside the trust. Current liabilities were $65,234; shareholders’ equity was $1.70 million. There was no long-term debt, and no working-capital loans were outstanding. The trust balance represented funds available for a business combination or public-share redemptions, subject to the filing’s terms.

Cash flow from operations was $21,448 for the inception-to-date period; investing cash flow was negative $175.95 million, mainly from funding the trust; financing cash flow was $177.68 million. Cash outside the trust ended at $1.75 million. Revenue and gross or operating margins are not meaningful for this pre-operating SPAC.

Changes and unusual items

The company raised $172.5 million from 17.25 million public units and $9.3 million from private warrants, with $175.95 million placed in trust. It reported $4.15 million of IPO transaction costs. The filing presents no earlier comparable operating period; the company was formed in February 2021.

Oxus restated its previously issued September 8, 2021 balance sheet to classify all redeemable Class A shares as temporary equity rather than partly as permanent equity. The adjustment increased the reported temporary-equity balance by approximately $3.25 million and reduced shareholders’ equity by the same amount. The filing says the restatement did not affect operating or investing cash flows.

Outlook, risks and contingencies

Management said funds outside the trust were sufficient to support operations for at least one year from issuance of the financial statements, but warned that actual search and transaction costs could exceed estimates and that additional financing might be needed. Oxus had up to 18 months from the September 8, 2021 IPO closing to complete a business combination; otherwise it must wind up and redeem public shares under the stated terms. Completion was not assured.

A business-combination marketing fee of up to $5.23 million would be payable upon a transaction, excluding possible finder fees. COVID-19 could adversely affect the company’s financial position or target search, but the impact was not determinable. The company reported no legal proceedings and no material changes to the IPO prospectus risk factors.

Disclosure controls were assessed as ineffective at September 30, 2021. Management identified a material weakness involving accounting for redeemable shares and complex financial instruments, restated the earlier balance sheet, and described remediation efforts while noting there was no assurance they would be effective.

Investor verification points

• Confirm the filing belongs to Oxus Acquisition Corp.; it does not match the requested company, Borealis Foods Inc.
• Review the restatement and the material weakness in financial reporting controls.
• Verify trust-account assets, redemption provisions, and the business-combination deadline and terms.
• Assess the potential transaction marketing fee and whether additional financing may be required.