Oxus Acquisition (OXUS) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed financial statements for Oxus Acquisition Corp., including the balance sheets, statements of operations, changes in shareholders' equity, and cash flows, along with detailed notes explaining the company's accounting policies, operations, and financial instruments Condensed Balance Sheets Condensed Balance Sheets (Amounts in US Dollars) | Metric | March 31, 2022 (Unaudited) | December 31, 2021 (Audited) | | :----------------------------------- | :--------------------------- | :-------------------------- | | Cash | $0.95 million | $1.12 million | | Prepaid expenses (Current) | $0.30 million | $0.31 million | | Total Current Assets | $1.25 million | $1.44 million | | Cash held in Trust Account | $175.97 million | $175.95 million | | Total Assets | $177.24 million | $177.49 million | | Accrued offering costs and expenses | $0.54 million | $0.24 million | | Total Current Liabilities | $0.54 million | $0.24 million | | Class A ordinary shares subject to possible redemption | $175.97 million | $175.95 million | | Total Shareholders' Equity | $0.73 million | $1.30 million | | Total Liabilities and Shareholders' Equity | $177.24 million | $177.49 million | Condensed Statements of Operations Condensed Statements of Operations (Amounts in US Dollars) | Metric | For the Three Months Ended March 31, 2022 | For the Period from February 3, 2021 (inception) through March 31, 2021 | | :-------------------------------------------------- | :---------------------------------------- | :-------------------------------------------------------------------- | | Formation and operating expenses | $0.57 million | $18,708 | | Loss from operations | $(0.57) million | $(18,708) | | Dividend income | $14,360 | $- | | Net loss | $(0.55) million | $(18,708) | | Basic and diluted net loss per redeemable Class A ordinary share | $(0.03) | $- | | Basic and diluted net loss per non-redeemable ordinary share | $(0.03) | $(0.00) | Condensed Statements of Changes in Shareholders' Equity Condensed Statements of Changes in Shareholders' Equity (Amounts in US Dollars) | Metric | December 31, 2021 | Remeasurement of Class A ordinary shares to redemption amount | Net loss | March 31, 2022 | | :-------------------------------- | :---------------- | :---------------------------------------------------------- | :------- | :------------- | | Total Shareholders' Equity | $1.30 million | $(18,324) | $(0.55) million | $0.73 million | Condensed Statements of Changes in Shareholders' Equity (Amounts in US Dollars) | Metric | February 3, 2021 (inception) | Issuance of Class B ordinary shares to Sponsor | Issuance of Underwriter Founder Shares | Net loss | March 31, 2021 | | :-------------------------------- | :--------------------------- | :--------------------------------------------- | :----------------------------------- | :------- | :------------- | | Total Shareholders' Equity | $- | $25,000 | $40 | $(18,708) | $6,332 | Condensed Statements of Cash Flows Condensed Statements of Cash Flows (Amounts in US Dollars) | Metric | For the Three Months Ended March 31, 2022 | For the Period from February 3, 2021 (inception) through March 31, 2021 | | :-------------------------------------------------- | :---------------------------------------- | :-------------------------------------------------------------------- | | Net loss | $(0.55) million | $(18,708) | | Dividend earned on securities held in Trust Account | $(14,360) | $- | | Accrued offering costs and expenses | $0.31 million | $790 | | Prepaid expenses | $86,349 | $- | | Net cash used in operating activities | $(0.17) million | $(17,918) | | Proceeds from issuance of Class B ordinary shares to Sponsor | $- | $25,000 | | Payment of offering costs | $- | $(7,082) | | Net cash provided by financing activities | $- | $17,918 | | Net Change in Cash | $(0.17) million | $- | | Cash - Beginning | $1.12 million | $- | | Cash - Ending | $0.95 million | $- | Notes to the Condensed Financial Statements NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS - Oxus Acquisition Corp. is a blank check company incorporated on February 3, 2021, formed to complete a Business Combination, with a focus on energy transition technologies in emerging/frontier countries (CIS, South/South-East Asia, MENA regions)[21][22] - The Company closed its Initial Public Offering (IPO) on September 8, 2021, selling 15 million units at $10.00 per unit, and 8.4 million Private Warrants at $1.00 each[24][29][30] - The underwriters' over-allotment option was fully exercised on September 13, 2021, adding 2.25 million units and 0.9 million Private Warrants, bringing the total proceeds in the Trust Account to $175.95 million[24][29][30] - The Company must complete a Business Combination within 18 months from the IPO closing (Combination Period) and acquire businesses with an aggregate fair market value of at least 80% of the net assets in the Trust Account[26][37] - Management has determined that the company's liquidity condition, coupled with the mandatory liquidation if a Business Combination is not consummated by March 8, 2023, and an extension is not requested, raises substantial doubt about its ability to continue as a going concern[42][47] Financial Position (Amounts in US Dollars) | Metric | Amount (as of March 31, 2022) | | :-------------------------- | :---------------------------- | | Operating bank account | $0.95 million | | Cash held in Trust Account | $175.97 million | | Working capital | $0.71 million | - The company is evaluating the impact of the COVID-19 pandemic and the rising conflict between Russia and Ukraine, noting potential negative effects on its financial position and ability to complete a Business Combination[48][49] NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - The Company is an 'emerging growth company' and has elected not to opt out of the extended transition period for new accounting standards, which may make financial statement comparisons with other public companies difficult[53][54][55] - As of March 31, 2022, $175.97 million of cash held in the Trust Account was invested in U.S. Treasury Securities[60] - All 17.25 million Class A ordinary shares are classified as temporary equity due to redemption provisions not solely within the Company's control, in accordance with ASC 480-10-S99-3A[61] - Net loss per ordinary share is computed using the two-class method, allocating net loss pro rata between Class A and Class B ordinary shares[66] - Warrants are considered anti-dilutive and are not included in diluted EPS calculations[67] - The Company is incorporated in the Cayman Islands and is not subject to income taxation there[72] - U.S. taxation could apply to individual owners or if the Company engages in a U.S. trade or business[73] - Public and Private warrants are accounted for as equity-classified instruments based on ASC 480 and ASC 815, recorded as a component of additional paid-in capital[75][76] - The Company is currently evaluating the impact of ASU 2020-06, which simplifies accounting for certain financial instruments and amends diluted earnings per share guidance, applicable for fiscal years beginning after December 15, 2023[79][80] NOTE 3 — INITIAL PUBLIC OFFERING - The Company offered 15 million Units at $10.00 per Unit in its Initial Public Offering, with each Unit comprising one ordinary share and one Public Warrant[81] - The underwriters fully exercised their over-allotment option on September 13, 2021, purchasing an additional 2.25 million Units and 0.9 million Private Warrants, resulting in approximately $175.95 million aggregate proceeds deposited into the Trust Account[82] NOTE 4 — PRIVATE WARRANTS - Concurrently with the IPO, the Sponsor and underwriters purchased 8.4 million Private Warrants at $1.00 each, generating $8.4 million[86] - An additional 0.9 million Private Warrants were purchased due to the over-allotment option exercise[87] - If the Company fails to complete a Business Combination within the Combination Period, the Private Warrants will expire worthless[88] NOTE 5 — RELATED PARTY TRANSACTIONS - The Sponsor initially received 8.63 million Class B ordinary shares (Founder Shares) for $25,000[89] - These shares were subject to forfeiture if the over-allotment option was not fully exercised, but as of March 31, 2022, no shares were available for forfeiture due to full exercise[90][92] - 150,000 Founder Shares were granted to independent director nominees in July 2021 with a fair value of $0.38 million ($2.54 per share)[91] - Compensation expense will be recognized only upon the consummation of a Business Combination[91] - Founder Shares are subject to a lock-up period until one year after the Business Combination, or earlier under specific conditions related to share price or company liquidation[95] - The Company issued 400,000 Class A ordinary shares (Underwriter Founder Shares) to its underwriters/designees at $0.0001 per share, which are subject to transfer restrictions and waiver of redemption/liquidation rights[96] - 100,000 of these shares were subsequently surrendered[97] - The Sponsor issued an unsecured, non-interest bearing promissory note to the Company for up to $0.30 million, which was repaid in full ($0.28 million) on September 8, 2021[99][100][101] - The Sponsor, affiliates, officers, or directors may provide Working Capital Loans to finance transaction costs, which would be repaid upon a Business Combination or convertible into Private Warrants[104] - No such loans were outstanding as of March 31, 2022[104] NOTE 6 — COMMITMENTS AND CONTINGENCIES - The Company has an Administrative Support Agreement to pay the Sponsor up to $10,000 per month for office space and administrative support for up to 18 months[106] - $30,000 was accrued for these services for the three months ended March 31, 2022[107] - Holders of Founder Shares, Private Warrants, and warrants from Working Capital Loans are entitled to registration rights, requiring the Company to register such securities for resale[109] - EarlyBirdCapital and Sova Capital are engaged as advisors for a Business Combination, with a cash fee of $4.50 million (or $5.23 million if over-allotment exercised) payable upon consummation[111] NOTE 7 — SHAREHOLDERS' EQUITY - The Company is authorized to issue 5 million preferred shares, but none were issued or outstanding as of March 31, 2022, and December 31, 2021[112] - 500 million Class A ordinary shares are authorized; 300,000 non-redeemable shares were issued and outstanding as of March 31, 2022, excluding 17.25 million shares subject to possible redemption[113] - 50 million Class B ordinary shares are authorized; 4.31 million shares were issued and outstanding as of March 31, 2022[114] - These shares automatically convert to Class A ordinary shares on a one-for-one basis upon the closing of a Business Combination, subject to adjustment[117][118] - Public Warrants become exercisable on the later of 30 days after a Business Combination or 12 months from the IPO closing[119] - The Company may redeem outstanding Public Warrants at $0.01 per warrant if the Class A ordinary share price equals or exceeds $18.00 for 20 trading days within a 30-day period[120] - The exercise price of warrants and the $18.00 redemption trigger price are subject to adjustment if additional ordinary shares or equity-linked securities are issued for capital raising purposes in connection with a Business Combination at an issue price less than $9.20 per share, and the volume weighted average trading price is below $9.20 per share[122] NOTE 8 – FAIR VALUE MEASUREMENTS - The Company uses a fair value hierarchy (Level 1, 2, 3) to classify assets and liabilities based on the observability of inputs used in valuation[123][124] Marketable Securities Held in Trust Account (Amounts in US Dollars) | Asset | March 31, 2022 | December 31, 2021 | | :-------------------------------- | :------------- | :---------------- | | Marketable securities held in Trust Account (Level 1) | $175.97 million | $175.95 million | NOTE 9 — SUBSEQUENT EVENTS - The Company evaluated subsequent events up to the financial statements' issuance date and did not identify any other events requiring adjustment or disclosure[127] 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, operational results, liquidity, and critical accounting policies, emphasizing its status as a blank check company focused on completing a Business Combination Overview - Oxus Acquisition Corp. is a blank check company formed on February 3, 2021, with the sole purpose of effecting a Business Combination, and expects to incur significant costs without generating operating revenues until such combination is completed[131][132][133] Results of Operations Results of Operations (Amounts in US Dollars) | Metric | For the Three Months Ended March 31, 2022 | For the Period from February 3, 2021 (inception) through March 31, 2021 | | :-------------------------------- | :---------------------------------------- | :-------------------------------------------------------------------- | | Net loss | $0.55 million | $18,708 | | Dividend income | $14,360 | $- | | Operating expenses | $0.57 million | $18,708 (formation expenses) | Liquidity Liquidity Position (Amounts in US Dollars) | Metric | As of March 31, 2022 | As of December 31, 2021 | | :-------------------------------- | :------------------- | :-------------------- | | Cash and marketable securities in Trust Account | $175.97 million | $175.95 million | | Cash outside Trust Account | $0.95 million | $1.12 million | | Working capital | $0.71 million | N/A | - The Company intends to use funds in the Trust Account primarily for a Business Combination and funds outside the Trust Account for identifying and evaluating target businesses, due diligence, and related expenses[140][141][145] - Management has determined that the mandatory liquidation if a Business Combination is not completed by March 8, 2023, and an extension is not obtained, raises substantial doubt about the Company's ability to continue as a going concern[143] - The Company may need to raise additional capital through loans from its Sponsor, shareholders, officers, directors, or third parties, but there is no assurance that such financing will be available on commercially acceptable terms[146] Off-Balance Sheet Arrangements - As of March 31, 2022, the Company has no obligations, assets, or liabilities considered off-balance sheet arrangements[147] Contractual Obligations - The Company does not have any long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities[148] - A cash fee of up to $5.23 million is payable to EarlyBirdCapital, Inc. and Sova Capital Limited for Business Combination advisory services upon consummation of an initial Business Combination[149] Critical Accounting Policies - Warrants (Public and Private) are accounted for as equity-classified instruments based on ASC 480 and ASC 815-15, recorded as a component of additional paid-in capital[154][155] - Class A ordinary shares subject to possible redemption are classified as temporary equity at redemption value due to redemption rights being outside the Company's control[156] - Net loss per ordinary share is computed using the two-class method, with accretion associated with redeemable Class A ordinary shares excluded from EPS as the redemption value approximates fair value[157] - The Company is evaluating ASU 2020-06, which simplifies accounting for certain financial instruments and amends diluted earnings per share guidance, applicable for fiscal years beginning after December 15, 2023[158][159] 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 quantitative and qualitative disclosures about market risk[160] Item 4. Controls and Procedures This section reports that the company's disclosure controls and procedures were not effective as of March 31, 2022, due to a material weakness in accounting for complex financial instruments, and outlines the ongoing remediation efforts - The Company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were not effective as of March 31, 2022, due to a material weakness in internal control over financial reporting related to accounting for complex financial instruments[162] - Despite the material weakness, management believes the financial statements fairly present the financial position, results of operations, and cash flows due to additional analysis performed[162] - The Company is devoting significant effort and resources to remediate the material weakness by enhancing its system for evaluating and implementing accounting standards, including through enhanced analyses by personnel and third-party professionals[164] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section states that Oxus Acquisition Corp. is not currently involved in any legal proceedings - There are no legal proceedings[167] Item 1A. Risk Factors This section refers to the company's Annual Report for a comprehensive list of risk factors and highlights new or materially changed risks, specifically concerning regulatory changes for SPACs and the company's going concern status - The primary risk factors are detailed in the Annual Report on Form 10-K for the year ended December 31, 2021[168] - New risk factors include potential adverse effects from changes in laws or regulations, particularly the SEC's proposed rules issued on March 30, 2022, regarding business combination transactions involving SPACs[169][170] - The company's proximity to its liquidation date (March 8, 2023) expresses substantial doubt about its ability to continue as a 'going concern,' which is a significant risk factor[171] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities This section details the issuance of Class B and Class A ordinary shares through unregistered sales, including forfeitures and transfers, and outlines the proceeds generated from the Initial Public Offering and private placements, which were deposited into the Trust Account - The Company issued 8.63 million Class B ordinary shares to the Sponsor for $25,000 and 400,000 Class A ordinary shares to underwriters/designees at $0.0001 per share in unregistered sales[172] - Subsequently, 4.31 million founder shares were forfeited by the Sponsor, and 100,000 underwriter founder shares were forfeited[172] - The Initial Public Offering of 15 million Units generated $150 million gross proceeds[173] - The full exercise of the over-allotment option added $22.5 million from 2.25 million additional Units[174] - Private placements of 8.4 million warrants and an additional 0.9 million warrants generated $8.4 million and $0.9 million, respectively[175] - A total of $175.95 million from these proceeds was deposited into the Trust Account[176] Item 3. Defaults Upon Senior Securities This section confirms that there have been no defaults upon senior securities - There are no defaults upon senior securities[178] Item 4. Mine Safety Disclosures This section states that the disclosure requirements for mine safety are not applicable to the company - Mine Safety Disclosures are not applicable to the Company[179] Item 5. Other Information This section indicates that there is no other information to report - No other information is reported under this item[180] Item 6. Exhibits This section lists all exhibits filed with or incorporated by reference into the Quarterly Report, including corporate governance documents, officer certifications, and XBRL data files - Exhibits include the Amended and Restated Memorandum and Articles of Association, certifications of the Principal Executive Officer and Principal Financial Officer (pursuant to Sections 302 and 906 of Sarbanes-Oxley Act), and various Inline XBRL documents[183]