| ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS | NOTE 1
– ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS Oxus
Acquisition Corp. (the “Company”) is a blank check company incorporated in the Cayman Islands on February 3, 2021. The Company
was formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business
combination with one or more businesses (a “Business Combination”). The Company is not limited to a particular industry or
geographic region for purposes of consummating a Business Combination. The
Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early
stage and emerging growth companies. As
of September 30, 2023 the Company had not commenced any operations. All activity for the period from February 3, 2021 (inception) through
September 30, 2023, relates to the Company’s formation and the initial public offering (“Initial Public Offering”),
which is described below, and since the offering identifying and evaluating prospective acquisition targets for a Business Combination.
The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company
will generate non-operating income in the form of interest income or dividend income from the proceeds derived from the Initial Public
Offering. The Company has selected December 31 as its fiscal year end. On
September 8, 2021, the Company closed its Initial Public Offering of 15,000,000 units at $10.00 per unit (the “Units” and,
with respect to the ordinary shares included in the Units, the “Public Shares”) which is discussed in Note 3 and the sale
of 8,400,000 warrants (each, a “Private Warrant” and collectively, the “Private Warrants”) at a price of $1.00
per Private Warrant in a private placement to the Company’s sponsor, Oxus Capital Pte. Ltd (the “Sponsor”) and its
underwriters that closed simultaneously with the closing of the Initial Public Offering (as described in Note 4). The Company has listed
the Units on the Nasdaq Capital Market (“Nasdaq”). Transaction
costs amounted to $3.70 million consisting of $3.00 million in cash of underwriting fees and $0.70 million of other offering costs. The
Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering
and the sale of the Private Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating
a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company
must complete a Business Combination with one or more operating businesses or assets that together have an aggregate fair market value
equal to at least 80% of the net assets held in the Trust Account (defined below) (net of amounts disbursed to management for working
capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions) at the time of the Company’s
signing a definitive agreement in connection with its initial Business Combination. The Company will only complete a Business Combination
if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires
an interest in the target business or assets sufficient for it not to be required to register as an investment company under the Investment
Company Act of 1940, as amended (the “Investment Company Act”). Upon the closing of the Initial
Public Offering on September 8, 2021, the Company deposited $153.00 million ($10.20 per Unit) from the proceeds of the Initial Public
Offering in the trust account (“Trust Account”), located in the United States and invested only in U.S. government securities,
within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open-ended
investment company that holds itself out as a money market fund selected by the Company meeting certain conditions of Rule 2a-7 of the
Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the
distribution of the funds held in the Trust Account, as described below. On
September 13, 2021, the underwriters exercised their over-allotment option in full (see Note 4), according to which the Company consummated
the sale of an additional 2,250,000 Units, at $10.00 per Unit, and the sale of an additional 900,000 Private Warrants, at $1.00 per Private
Warrant, generating total gross proceeds of $23.40 million. The proceeds from the sale of the additional Units were deposited into the
Trust Account, bringing the aggregate proceeds held in the Trust Account to $175.95 million, and incurring additional cash underwriting
discount of approximately $0.45 million. The
Company will provide its holders of the outstanding Public Shares (the “public shareholders”) with the opportunity to redeem
all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting
called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek shareholder
approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public shareholders
will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated
to be $10.20 per Public Share, plus any pro rata income earned on the funds held in the Trust Account and not previously released to
the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect
to the Company’s warrants. The Public Shares subject to redemption will be recorded at redemption value and classified as temporary
equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”)
Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity”. The Company will only proceed
with a Business Combination if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of
a Business Combination and, if the Company seeks shareholder approval, a majority of the shares voted are voted in favor of the Business
Combination. If a shareholder vote is not required by applicable law or stock exchange rules and the Company does not decide to hold a
shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association,
as amended (the “Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of the
U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business
Combination. If, however, shareholder approval of the transaction is required by applicable law or stock exchange rules, or the Company
decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy
solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks shareholder approval in connection
with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5), and any Public Shares purchased
during or after the Initial Public Offering in favor of approving a Business Combination. Additionally, each public shareholder may elect
to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all. Notwithstanding
the above, if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender
offer rules, the Certificate of Incorporation provides that a public shareholder, together with any affiliate of such shareholder or
any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more
than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The
Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares (as defined at Note 5) and Public Shares held
by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation
(i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial
Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect
to any other provision relating to shareholders’ rights or pre-initial Business Combination activity, unless the Company provides
the public shareholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The
Company initially had until March 8, 2023 to complete a Business Combination, which was extended until December 8, 2023 (the “Combination
Period”) after the approval obtained at an extraordinary meeting of shareholder held on March 2, 2023 (the “Extension”).
If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem
the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including
income earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations (less up to
$100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely
extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any),
and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining shareholders
and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Cayman
Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating
distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination
within the Combination Period. The
Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares (as defined at Note 5) if the Company fails to
complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the Initial
Public Offering, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete
a Business Combination within the Combination Period. In
order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims
by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed
entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.20 per Public Share
and (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions
in the value of the trust assets, less taxes payable, provided that such liability will not apply to claims by a third party or prospective
target business who executed a waiver of any and all rights to the monies held in the Trust Account nor will it apply to any claims under
the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under
the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to
be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.
The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors
by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective
target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title,
interest or claim of any kind in or to monies held in the Trust Account. On
February 23, 2023, the Company entered into a business combination agreement by and among the Company, 1000397116 Ontario Inc., a corporation
incorporated under the laws of the province of Ontario, Canada (“Newco”) and a wholly-owned subsidiary of the Company, and
Borealis Foods Inc (“Borealis”) (as may be amended and/or restated from time to time, the “Business Combination Agreement”).
Pursuant to the Business Combination Agreement, among other things: (a) the Company will domesticate and continue as a corporation existing
under the laws of the province of Ontario, Canada (the “Continuance” and, the Company as the continuing entity, “New
Oxus”); (b) on the closing date, Newco and Borealis will amalgamate in accordance with the terms of the plan of arrangement (the
“Borealis Amalgamation” and Newco and Borealis as amalgamated, “Amalco”), with Amalco surviving the Borealis
Amalgamation as a wholly-owned subsidiary of New Oxus; and (c) on the closing date, immediately following the Borealis Amalgamation,
Amalco and New Oxus will amalgamate (the “New Oxus Amalgamation,” and together with the Continuance, the Borealis Amalgamation
and other transactions contemplated by the Business Combination, the plan of arrangement and the ancillary agreements, the “Proposed
Transaction”), with New Oxus surviving the New Oxus Amalgamation. The
Business Combination Agreement was unanimously approved by Oxus’ and Borealis’ respective board of directors. Under the Business
Combination Agreement, the shareholders of Borealis (“Borealis Shareholders”) will receive from New Oxus, in the aggregate,
a number of shares of New Oxus equal to (a) the Borealis Value (as defined below) divided by (b) $10.00. The Borealis Value will be equal
to $150 million less net indebtedness (aggregate consolidated amount of indebtedness of Borealis minus cash) (the “Borealis Value”). On
March 2, 2023, at the extraordinary general meeting of shareholders in connection with the Extension, the holders of 15,300,532 Class
A ordinary shares of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately
$10.41 per share, for an aggregate redemption amount of approximately $159.34 million, leaving approximately $20.3 million in the Trust
Account. On
August 11, 2023, the Company, and Borealis, entered into an amendment (the “Amendment” ) to the Business Combination Agreement,
to amend and restate certain terms of the Business Combination Agreement, including (i) Section 7.18(a), to change the number of awards
of shares of New SPAC Shares to be granted under the New SPAC Equity Plan from 15% to 5%; (ii) to delete the form of the Plan of Arrangement
attached as Exhibit B to the original Business Combination Agreement and replace it with the form attached as Exhibit A to the Amendment
(the “Plan of Arrangement (Amended)”); and (iii) to delete the form of the New SPAC Bylaws attached as Exhibit G to the Business
Combination Agreement and replace it with the form attached as Exhibit B to the Amendment (the “New SPAC Bylaws (Amended)”).
The Plan of Arrangement (Amended) includes, among other things, certain changes to reflect a plan of arrangement under section 192 of
the CBCA and section 182 of the OBCA and certain changes to provisions relating to the New Oxus Amalgamation, and the effects of such
amalgamation. The New SPAC Bylaws (Amended) includes additional provisions relating to the appointment of an audit committee, and clarification
on the quorum requirements for a meeting of shareholders. On
August 14, 2023, the Company filed a registration statement on (“Form S-4”) with the SEC relating to the proposed business combination with
Borealis. Shareholder
Support Agreements Concurrently
with the execution and delivery of the Business Combination Agreement, Oxus, Borealis and certain Borealis Shareholders entered into
an agreement, pursuant to which, among other things, such Borealis Shareholders have agreed to vote their Borealis shares in favor of
the Proposed Transaction and not sell or transfer their Borealis shares (the “Shareholder Support Agreements”). Sponsor
Support Agreement Concurrently with the execution
and delivery of the Business Combination Agreement, Oxus, Borealis and the Sponsor entered into an agreement, pursuant to which, among
other things, Sponsor agreed to (A) vote its founder shares in favor of the Proposed Transaction and the Oxus Proposals, (B) not redeem
its founder shares, (C) waive certain of its anti-dilution rights, (D) convert the Sponsor Convertible Notes, and (E) forfeit certain
Sponsor founder shares as a part of incentive equity compensation for directors, officers and employees of New Oxus (subject to terms
and conditions set forth in such agreement) (the “Sponsor Support Agreement”). Registration
Rights Agreement In connection with the closing date (the “Closing”), Oxus
and certain Borealis Shareholders and certain shareholders of Oxus (the “Holders”) will enter into an agreement, pursuant
to which Oxus will be obligated to file a registration statement to register the resale of certain securities of Oxus held by the Holders.
The Registration Rights Agreement will also provide the Holders with “piggy-back” registration rights, subject to certain
requirements and customary conditions (the “Registration Rights Agreement”). Lock-Up
Agreements In
connection with the Closing, Oxus and certain directors/officers/five percent (5%) or greater shareholders of Borealis (the “Subject
Party”) will enter into agreements, pursuant to which (A) fifty percent (50%) of the shares of New Oxus held by the Subject Party
(the “Restricted Securities”) will be locked-up during the period commencing from the Closing and ending on the earlier to
occur of (i) twelve (12) months after the date of the Closing and (ii) the date on which the closing price of common shares of New Oxus
equals or exceeds $12.00 per share (as adjusted to take into account any stock split, stock dividend, reverse stock split, recapitalization
or similar event) for any twenty (20) trading days within a thirty (30)-trading day period starting after the Closing, and (B) fifty
percent (50%) of the Restricted Securities will be locked-up during the period commencing from the Closing and ending on twelve (12)
months after the date of the Closing, subject to certain specifications and exceptions (the “Lock-Up Agreements”). Liquidity
and Going Concern As
of September 30, 2023, the Company had $0.07 million in its operating bank account, $21.53 million of marketable securities held in the
Trust Account to be used for a Business Combination or to repurchase or redeem its ordinary shares in connection therewith and a working
capital deficiency of $6.02 million. Until
the consummation of a Business Combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating
prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting
the target business to acquire, and structuring, negotiating and consummating the Business Combination. The
Company will need to raise additional capital through loans or additional investments from its 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 transaction, and reducing overhead expenses. The Company cannot provide any assurance
that new financing will be available to it on commercially acceptable terms, if at all. In connection with the Company’s assessment of going concern
considerations in accordance with ASC Topic 205-40 Presentation of Financial Statements – Going Concern, the Company has until December
8, 2023 to consummate a Business Combination. If a Business Combination is not consummated by this date and an extension not requested
by the Sponsor, there will be a mandatory liquidation and subsequent dissolution of the Company. Although the Company intends to consummate
a Business Combination on or before December 8, 2023, it is uncertain that the Company will be able to consummate a Business Combination
by this time. Management has determined that the liquidity condition, coupled with the mandatory liquidation, should a Business Combination
not occur, and an extension is not requested by the Sponsor, and potential subsequent dissolution raises substantial doubt about the Company’s
ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company
be required to liquidate after December 8, 2023. Risks
and Uncertainties Management
is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that
the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target
company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty. Various
social and political circumstances in the U.S. and around the world (including wars and other forms of conflict, including rising
trade tensions between the United States and China, and other uncertainties regarding actual and potential shifts in the U.S. and
foreign, trade, economic and other policies with other countries, terrorist acts, security operations and catastrophic events such
as fires, floods, earthquakes, tornadoes, hurricanes and global health epidemics), may also contribute to increased market
volatility and economic uncertainties or deterioration in the U.S. and worldwide. Specifically, the rising conflict between Russia
and Ukraine, and resulting market volatility could adversely affect the Company’s ability to complete a Business Combination.
In response to the conflict between Russia and Ukraine, the U.S. and other countries have imposed sanctions or other restrictive
actions against Russia. The recent military conflict between Israel and militant groups led by Hamas has also caused uncertainty in
the global markets. Any of the above factors, including sanctions, export controls, tariffs, trade wars and other governmental
actions, could have a material adverse effect on the Company’s ability to complete a Business Combination and the value of the
Company’s securities. |
