Oxus Acquisition (OXUS) - 2021 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures Item 1. Financial Statements This section presents the unaudited condensed financial statements for Oxus Acquisition Corp. as of September 30, 2021, and for the period from inception (February 3, 2021) through September 30, 2021, along with detailed notes explaining the company's organization, significant accounting policies, and specific transactions Unaudited Condensed Balance Sheet The balance sheet provides a snapshot of the company's assets, liabilities, and shareholders' equity as of September 30, 2021 Unaudited Condensed Balance Sheet (as of September 30, 2021) | ASSETS | Amount ($) | | :--------------------------------- | :----------- | | Cash | 1,747,044 | | Prepaid expenses | 17,149 | | Total Current Assets | 1,764,193 | | Cash held in Trust Account | 175,950,628 | | TOTAL ASSETS | 177,714,821 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | Accrued offering costs and expenses | 65,234 | | Total Current Liabilities | 65,234 | | Class A ordinary shares subject to possible redemption | 175,950,000 | | Total Shareholders' Equity | 1,699,587 | | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 177,714,821 | Unaudited Condensed Statements of Operations This statement details the company's financial performance, including formation and operating expenses, and net loss for the specified periods Unaudited Condensed Statements of Operations | Metric | Three Months Ended Sep 30, 2021 ($) | Period from Feb 3, 2021 (inception) through Sep 30, 2021 ($) | | :------------------------------------------------- | :---------------------------------- | :----------------------------------------------------------------- | | Formation and operating expenses | 7,929 | 26,637 | | Loss from operations | (7,929) | (26,637) | | Dividend received | 628 | 628 | | Net loss | (7,301) | (26,009) | | Basic and diluted net loss per redeemable Class A ordinary share | (0.00) | (0.00) | | Basic and diluted net loss per non-redeemable ordinary share | (0.00) | (0.00) | Unaudited Condensed Statements of Changes in Shareholders' Equity This statement outlines the changes in shareholders' equity from inception to September 30, 2021, reflecting capital transactions and net losses - Total Shareholders' Equity increased from $0 at inception to $1,699,587 as of September 30, 2021, primarily due to proceeds from the sale of Private Warrants and fair value of Public Warrants, offset by reclassification of Class A ordinary shares to redemption amount and accumulated net losses[13] Unaudited Condensed Statement of Cash Flows This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the period from inception to September 30, 2021 Unaudited Condensed Statement of Cash Flows (Period from Feb 3, 2021 to Sep 30, 2021) | Cash Flow Activity | Amount ($) | | :-------------------------------------- | :----------- | | Net cash provided by operating activities | 21,448 | | Net cash used in investing activities | (175,950,000) | | Net cash provided by financing activities | 177,675,596 | | Net Change in Cash | 1,747,044 | | Cash - Ending | 1,747,044 | Notes to Unaudited Condensed Financial Statements These notes provide detailed explanations and disclosures supporting the unaudited condensed financial statements, covering accounting policies and specific transactions NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS This note details the company's formation as a SPAC, its business objectives, and the key events of its Initial Public Offering and trust account establishment - Oxus Acquisition Corp. is a blank check company (SPAC) incorporated on February 3, 2021, aiming for a business combination in energy transition technologies (e.g., battery materials, EV infrastructure) in emerging/frontier markets like CIS, South/South-East Asia, and MENA regions[18][19] - The company completed its Initial Public Offering (IPO) on September 8, 2021, selling 15,000,000 units at $10.00 per unit, and 8,400,000 Private Warrants at $1.00 each; an over-allotment option was fully exercised on September 13, 2021, adding 2,250,000 units and 900,000 Private Warrants[21][26][27] - A total of $175.95 million from the IPO and over-allotment proceeds was deposited into a Trust Account, to be invested in U.S. government securities or money market funds until a business combination or liquidation[26][27] - The company has 18 months from the IPO closing to complete a Business Combination; if unsuccessful, it will redeem public shares and liquidate[34] NOTE 2 — RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS This note explains the restatement of financial statements to correctly classify Class A ordinary shares as temporary equity, aligning with SEC guidance - The company restated its financial statements to reclassify all Class A ordinary shares subject to possible redemption as temporary equity, in accordance with SEC guidance and ASC 480, correcting a previous classification error where a portion was in permanent equity[43][44] Impact of Restatement on Balance Sheet (as of September 8, 2021) | Item | As Previously Reported ($) | Restatement Adjustment ($) | As Restated ($) | | :----------------------------------------------------------------- | :------------------------- | :------------------------- | :-------------- | | Class A ordinary shares subject to possible redemption | 149,753,787 | 3,246,213 | 153,000,000 | | Class A ordinary shares, $0.0001 par value | 62 | (32) | 30 | | Additional paid-in capital | 5,019,110 | (3,246,181) | 1,772,929 | | Accumulated deficit | (19,602) | - | (19,602) | | Total shareholders' equity/(deficit) | 4,999,570 | (3,246,213) | 1,753,357 | NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the key accounting principles and policies applied in preparing the financial statements, including GAAP compliance and specific classifications - The financial statements are prepared in accordance with GAAP for interim information, with certain disclosures condensed or omitted per SEC rules for interim reporting[48] - The company is an 'emerging growth company' under the JOBS Act, allowing it to take advantage of certain exemptions, including an extended transition period for new accounting standards[50][51] - All 17,250,000 Class A ordinary shares sold in the IPO are classified as temporary equity due to redemption features not solely within the company's control, with accretion from initial book value to redemption amount recognized[58] - Offering costs of $4.15 million ($3.45 million underwriting fees, $0.70 million other) were charged to shareholders' equity upon IPO completion[61] - Warrants (Public and Private) are equity-classified instruments based on ASC 480 and ASC 815, as they meet the criteria for equity classification[70][73] NOTE 4 — INITIAL PUBLIC OFFERING This note details the structure and proceeds of the company's Initial Public Offering, including the units sold and the exercise of the over-allotment option - The IPO involved 15,000,000 units at $10.00 each, with each unit comprising one ordinary share and one Public Warrant; the underwriters fully exercised their over-allotment option for an additional 2,250,000 units, bringing total gross proceeds from units to $172.50 million[75][76] NOTE 5 — PRIVATE WARRANTS This note describes the issuance and terms of Private Warrants, including their purchase by the Sponsor and underwriters, and conditions for their expiration - Concurrently with the IPO, the Sponsor and underwriters purchased 8,400,000 Private Warrants for $8.40 million; an additional 900,000 Private Warrants were purchased for $0.90 million due to the over-allotment exercise[77][78] - Private Warrants will expire worthless if a Business Combination is not completed within the Combination Period, with proceeds used to redeem Public Shares[81] NOTE 6 — RELATED PARTY TRANSACTIONS This note discloses transactions and agreements with related parties, including the Sponsor's acquisition of Founder Shares and administrative support arrangements - The Sponsor acquired 8,625,000 Class B ordinary shares (Founder Shares) for $25,000; after forfeitures and transfers, 4,312,500 Founder Shares remained outstanding as of September 30, 2021[82][83][84] - Underwriter Founder Shares (300,000 Class A ordinary shares) were issued at $0.0001 per share, subject to transfer restrictions and waiver of redemption/liquidation rights[88][89] - The Company has an administrative support agreement to pay the Sponsor up to $10,000 per month for office space and support for up to 18 months[95] NOTE 7 — COMMITMENTS AND CONTINGENCIES This note outlines the company's various commitments and potential contingencies, including registration rights and advisory service fees upon business combination - Holders of Founder Shares, Private Warrants, and Working Capital Loan warrants are entitled to registration rights[96] - The Company will pay EarlyBirdCapital and Sova Capital a cash fee of $4.50 million (up to $5.23 million with over-allotment) upon consummation of a Business Combination for advisory services[99] NOTE 8 — SHAREHOLDERS' EQUITY This note details the composition of shareholders' equity, including outstanding share classes and the terms and conditions governing Public Warrants - As of September 30, 2021, there were 300,000 non-redeemable Class A ordinary shares and 4,312,500 Class B ordinary shares issued and outstanding; no preferred shares were issued[100][101][102] - Public Warrants become exercisable on the later of 30 days after a Business Combination or 12 months from IPO closing, and may be redeemed by the Company if Class A ordinary share price equals or exceeds $18.00[106][107][109] NOTE 9 — SUBSEQUENT EVENTS This note confirms that no other significant events requiring adjustment or disclosure occurred after the balance sheet date - No other subsequent events requiring adjustment or disclosure were identified after the balance sheet date up to the financial statements issuance date[108] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and operational results, highlighting its status as a blank check company, its lack of operating revenue, and its liquidity strategy following the Initial Public Offering Overview This overview reiterates the company's purpose as a blank check company formed to pursue a business combination - Oxus Acquisition Corp. is a blank check company formed on February 3, 2021, to pursue a business combination, intending to use IPO proceeds, shares, debt, or a combination thereof[112] Results of Operations This section details the company's financial performance, noting the absence of operating revenues and the focus on formation activities - The company has not generated any operating revenues to date, with activities focused on formation and the IPO; non-operating income is expected from interest on marketable securities in the Trust Account[114] Net Loss Summary | Period | Net Loss ($) | | :------------------------------------------------ | :----------- | | Three months ended September 30, 2021 | (7,301) | | Period from February 3, 2021 (inception) through September 30, 2021 | (26,009) | Liquidity and Capital Resources This section discusses the company's financial resources, including funds in the Trust Account and strategies for funding business combination activities - Following the IPO and private placement, $175.95 million was placed in the Trust Account; transaction costs amounted to $4.15 million[118][119] - Substantially all funds in the Trust Account are intended for the Business Combination, with interest potentially used for taxes; funds outside the Trust Account are for identifying and evaluating target businesses and due diligence[120][121] - The Sponsor or affiliates may provide Working Capital Loans, repayable from Trust Account proceeds upon Business Combination or from outside funds if no combination occurs; up to $1.5 million of such loans may be convertible into Private Warrants[122] Off-Balance Sheet Arrangements This section confirms the absence of any off-balance sheet arrangements as of the reporting date - The company had no off-balance sheet arrangements as of September 30, 2021[124] Contractual Obligations This section outlines the company's contractual commitments, including advisory fees contingent on a business combination - The company has no long-term debt, capital lease, or operating lease obligations; a contractual obligation exists to pay EarlyBirdCapital and Sova Capital up to $5.23 million for Business Combination advisory services upon consummation[125][126] Critical Accounting Policies This section highlights the significant accounting policies that require management's judgment and estimates, particularly for complex financial instruments - Key accounting policies include the classification of Warrants as equity-classified instruments (ASC 815-40) and Class A ordinary shares subject to possible redemption as temporary equity (ASC 480)[129][130][132][133] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Oxus Acquisition Corp. is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide disclosures about market risk[135] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of September 30, 2021, due to a material weakness in internal control over financial reporting related to the accounting classification of redeemable ordinary shares - Disclosure controls and procedures were deemed not effective as of September 30, 2021[137] - A material weakness was identified in internal control over financial reporting concerning the proper accounting classification of ordinary shares subject to possible redemption, leading to a restatement of the balance sheet[138][139] - The company is dedicating significant effort and resources to remediate and improve its internal control over financial reporting, particularly regarding complex financial instruments[141] PART II. OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, and other disclosures not covered in the financial statements Item 1. Legal Proceedings Oxus Acquisition Corp. reported no legal proceedings as of the filing date - No legal proceedings were reported[143] Item 1A. Risk Factors The company refers to the risk factors disclosed in its final prospectus for the Initial Public Offering, noting no material changes as of the date of this Quarterly Report - No material changes to the risk factors disclosed in the final prospectus of the Initial Public Offering were reported[144] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities This section details the issuance of unregistered equity securities, including Founder Shares and Private Placement Warrants, and the use of proceeds from the registered Initial Public Offering and subsequent over-allotment - Issued 8,625,000 Class B ordinary shares to the Sponsor for $25,000 and 400,000 Class A ordinary shares to underwriters/designees in private placements[145] - The Initial Public Offering generated $150,000,000 from 15,000,000 units; the full exercise of the over-allotment option added $22,500,000 from 2,250,000 additional units[146][147] - Private Placement Warrants generated $8,400,000 from 8,400,000 warrants, with an additional $900,000 from 900,000 warrants due to the over-allotment[148] - A total of $175,950,000 from the IPO and private placements was deposited into the Trust Account[149] Item 3. Defaults Upon Senior Securities Oxus Acquisition Corp. reported no defaults upon senior securities - No defaults upon senior securities were reported[150] Item 4. Mine Safety Disclosures This item is not applicable to Oxus Acquisition Corp. - Mine Safety Disclosures are not applicable to the company[151] Item 5. Other Information Oxus Acquisition Corp. reported no other information requiring disclosure under this item - No other information was reported[152] Item 6. Exhibits This section lists all exhibits filed as part of, or incorporated by reference into, the Quarterly Report, including organizational documents, certifications, and XBRL documents - Exhibits include Amended and Restated Memorandum and Articles of Association, certifications of principal executive and financial officers, and Inline XBRL documents[154] SIGNATURES This section provides the official signatures of the company's principal executive and financial officers, certifying the report's contents - The report was signed by Kanat Mynzhanov, Chief Executive Officer, and Askar Mametov, Chief Financial Officer, on November 15, 2021[160]