The accompanying notes are an integral
part of the unaudited condensed financial statements.
The accompanying notes are an integral
part of the unaudited condensed financial statements.
The accompanying notes are an integral
part of the unaudited condensed financial statements.
The accompanying notes are an integral
part of the unaudited condensed financial statements.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
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.
Although the Company is not
limited to a particular industry or geographic region for purposes of completing a Business Combination, the Company intends to focus
its search on targets in energy transition technologies, such as battery
materials, energy storage, electric vehicle (“EV”) infrastructure and advanced recycling in emerging/frontier countries including
the Commonwealth of Independent States (“CIS”), South and South-East Asia and Middle East and North Africa (“MENA”)
regions. 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,
2021, the Company had not commenced any operations. All activity for the period from February 3, 2021 (inception) through September
30, 2021, relates to the Company’s formation and the initial public offering (“Initial Public Offering”),
which is described below. 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 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 4 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 5). 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 (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”).
OXUS ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
NOTE 1 — ORGANIZATION AND DESCRIPTION
OF BUSINESS OPERATIONS (Continued)
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 a 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 5), 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 interest 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 (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 6), 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.
OXUS ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS
(Continued)
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 Memorandum and Articles of Association 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 20% 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 6) and Public Shares held by it in connection with
the completion of a Business Combination and (b) not to propose an amendment to the Memorandum and Articles of Association (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 will have until
18 months from the closing of the Initial Public Offering to complete a Business Combination (the “Combination Period”).
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
interest 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 6) 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. The underwriters have agreed to waive their rights to their deferred underwriting commission held in the Trust Account
in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will
be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the
event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than
the Initial Public Offering price per Unit ($10.00).
OXUS ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS
(Continued)
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.
Liquidity and Capital Resources
Prior to the completion of
the Initial Public Offering, the Company lacked the liquidity it needed to sustain operations for a reasonable period of time, which
is considered to be one year from the issuance date of the financial statement. The Company has since competed its Initial Public Offering
at which time capital in excess of the funds deposited in the Trust Account and/or used to fund offering expenses was released to the
Company for general working capital purposes. Accordingly, management has since re-evaluated the Company’s liquidity and financial
condition and determined that sufficient capital exists to sustain operations for at least one year from the date that the financial statements
were issued.
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.
OXUS ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
NOTE 2 — RESTATEMENT OF PREVIOUSLY
ISSUED FINANCIAL STATEMENTS
In preparation of the
Company’s unaudited condensed financial statements as of and for quarterly period ended September 30, 2021, the Company
concluded it should restate its financial statements to classify all Class A ordinary share subject to possible redemption in
temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, ASC 480,
paragraph10-S99, redemption provisions not solely within the control of the Company require ordinary share subject to redemption to
be classified outside of permanent equity. The Company had previously classified a portion of its Class A ordinary share in
permanent equity, or total shareholders’ equity. Although the Company did not specify a maximum redemption threshold, its
charter currently provides that, the Company will not redeem its public shares in an amount that would cause its net tangible assets
to be less than $5,000,001. Previously, the Company did not consider redeemable ordinary share classified as temporary equity as
part of net tangible assets. Effective with these financial statements, the Company restated this interpretation to include temporary
equity in net tangible assets. Accordingly, effective with this filing, the Company presents all redeemable Class A ordinary share
as temporary equity and to recognize reclassification from the initial book value to redemption value at the time of its Initial
Public Offering and in accordance with ASC 480. The Company will present this restatement in a prospective manner in all future
filings. Under this approach, the previously issued Initial Public Offering Balance Sheet will not be amended, but historical
amounts presented in the current and future filings will be recast to be consistent with the current presentation, and an
explanatory footnote will be provided.
The Company has restated
its financial statements to classify all redeemable Class A ordinary share as temporary equity and to record reclassification on the
shares of Class A ordinary share.
Impact of the Restatement
The impact of the
restatement on the 8-K balance sheet, as of September 8, 2021, is presented below. The restatement had no impact on net cash flows from
operating and investing activities. The table below summarizes the changes to the previously issued financial information.
|
|
As of September 8, 2021
|
|
|
|
As Previously
Reported
|
|
|
Restatement
Adjustment
|
|
|
As Restated
|
|
BALANCE SHEET
|
|
|
|
|
|
|
|
|
|
Class A ordinary shares subject to possible redemption (at approximately $10.20 per share)
|
|
$
|
149,753,787
|
|
|
$
|
3,246,213
|
|
|
$
|
153,000,000
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
OXUS ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited
condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of
America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation
S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP
have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do
not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash
flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of
a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for
the periods presented.
The accompanying unaudited
condensed financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed
with the SEC on September 7, 2021, as well as the Company’s Current Report on Form 8-K, as filed with the SEC on September 15, 2021.
The interim results for the period from February 3, 2021 (inception) through September 30, 2021, are not necessarily indicative of the
results to be expected for the period from February 3, 2021 (inception) through December 31, 2021, or for any future periods.
Emerging Growth Company
The Company is an “emerging
growth company,” as defined in Section 2(a) of the Securities Act, as amended by the Jumpstart Our Business Startups Act of 2012,
(the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable
to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the
auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive
compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote
on executive compensation and shareholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1)
of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until
private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class
of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS
Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that
apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such
extended transition period which means that when a standard is issued or revised and it has different application dates for public or
private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt
the new or revised standard.
This may make comparison
of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth
company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting
standards used.
OXUS ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates
The preparation of financial
statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is
at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date
of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more
future confirming events. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company had $1.75 million
in cash as of September 30, 2021. The Company considers all short-term investments with an original maturity of three months or less when
purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2021.
Cash held in Trust Account
At September 30, 2021, the
Company had $175.95 million cash held in the Trust Account.
Ordinary Shares Subject to Possible Redemption
All of the 17,250,000
Class A ordinary shares sold as parts of the Units in the Initial Public Offering contain a redemption feature. In accordance with
the Accounting Standards Codification 480-10-S99-3A “Classification and Measurement of Redeemable Securities”,
redemption provisions not solely within the control of the Company require the security to be classified outside of permanent
equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments,
are excluded from the provisions of ASC 480. The Company had previously classified 14,681,744 Class A ordinary shares as permanent
equity as of September 8, 2021. As part of the restatement of the Company’s financial statements, the Company has classified
all of the Class A ordinary shares as redeemable. Immediately upon the closing of the Initial Public Offering, the Company
recognized the accretion from initial book value to redemption amount value. The change in the carrying value of redeemable Class A
ordinary shares resulted in charges against additional paid-in capital and accumulated deficit.
As of September 30, 2021,
the Class A ordinary shares reflected on the balance sheet are reconciled in the following table:
Gross proceeds
|
|
$
|
172,500,000
|
|
Less:
|
|
|
|
|
Proceeds allocated to public warrants
|
|
|
(10,522,500
|
)
|
Ordinary shares issuance costs
|
|
|
(4,149,444
|
)
|
Sub-total
|
|
|
(14,671,944
|
)
|
Plus:
|
|
|
|
|
Reclassification of carrying value to redemption value
|
|
|
18,121,944
|
|
Contingently redeemable ordinary shares
|
|
$
|
175,950,000
|
|
OXUS ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 2021
NOTE 3 — SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Offering Costs Associated with the Initial
Public Offering
The Company complies with
the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A - “Expenses of Offering”.
Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that are directly
related to the Initial Public Offering. Offering costs amounting to $4.15 million were charged to shareholders’ equity upon the
completion of the Initial Public Offering ($3.45 million related to underwriters’ commissions and $0.70 million related to other
offering expenses).
Net Loss Per Ordinary Share
The Company applies the
two-class method in calculating earnings per share. The contractual formula utilized to calculate the redemption amount approximates
fair value. The Class feature to redeem at fair value means that there is effectively only one class of share. Changes in fair value
are not considered a dividend of the purposes of the numerator in the earnings per share calculation. Net loss per ordinary share is
computed by dividing the pro rata net loss between the Class A ordinary share and the Class B ordinary share by the weighted average
number of ordinary share outstanding for each of the periods. Weighted average shares were reduced for the effect of an aggregate of
1,125,000 shares of Class B ordinary share that was subject to forfeiture if the over-allotment option was not fully exercised,
which was adjusted to 562,500 through July 2021 (see Note 6). All shares and associated amounts have been retroactively adjusted to
reflect the forfeiture. The calculation of diluted loss per ordinary share does not consider the effect of the warrants issued in
connection with the Initial Public Offering since the exercise of the warrants is contingent upon the occurrence of future events
and the inclusion of such warrants would be anti-dilutive.
|
|
For the Three Months Ended September 30, 2021
|
|
|
For the
Period from February 3, 2021 (inception) through September 30, 2021
|
|
|
|
|
|
|
|
|
Ordinary shares subject to possible redemption
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
Net loss allocable to Class A ordinary shares subject to possible redemption
|
|
$
|
(3,602
|
)
|
|
$
|
(7,192
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted Average Redeemable Class A ordinary shares, Basic and Diluted
|
|
|
4,046,703
|
|
|
|
1,540,795
|
|
Basic and Diluted net loss per share, Redeemable Class A ordinary shares
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
Non-Redeemable Ordinary shares
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net loss allocable to Class B ordinary shares not subject to redemption
|
|
$
|
(3,699
|
)
|
|
$
|
(18,817
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted Average Non-Redeemable ordinary shares, Basic and Diluted
|
|
|
4,155,082
|
|
|
|
4,031,015
|
|
Basic and diluted net loss per share, ordinary shares
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
OXUS
ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution
which, at times, may exceed the federal depository insurance coverage corporation limit of $250,000. The Company has not experienced
losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.
Financial
Instruments
The
fair value of the Company’s assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value
Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet.
Income
Taxes
The
Company complies with the accounting and reporting requirements of FASB ASC, 740, “Income Taxes,”. Deferred tax assets and
liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying
amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included
the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be
realized. There were no unrecognized tax benefits as of September 30, 2021.
FASB
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not
to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized
tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2021. The Company
is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its
position. The Company is subject to income tax examinations by major taxing authorities since inception.
The
provision for income taxes was deemed to be de minimis for the period from February 3, 2021 (inception) through September 30, 2021.
Warrants
The Company accounts for its Public and Private warrants as equity-classified
instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing
Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers
whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480,
and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed
to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use
of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants
are outstanding.
OXUS
ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
NOTE
3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Warrants
(Continued)
In
addition to the 23,400,000 warrants (representing 15,000,000 Public Warrants (as defined at Note 4) included in the units and 8,400,000
Private Warrants) issued by the Company at the close of the Initial Public Offering, a further 3,150,000 warrants (representing 2,250,000
Public Warrants (as defined at Note 4) included in the units and 900,000 Private Warrants) were issued as a result of the underwriters’
full exercise of the over-allotment options. All warrants were issued in accordance with the guidance contained in ASC 815-40, Derivatives
and Hedging — Contracts in Entity’s Own Equity.
Recent
Accounting Pronouncements
Management
does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material
effect on the Company’s financial statements.
NOTE
4 — INITIAL PUBLIC OFFERING
Pursuant
to the Initial Public Offering, the Company offered for sale up to 15,000,000 Units (or 17,250,000 Units if the underwriters’
over-allotment option is exercised in full) at a purchase price of $10.00 per Unit. Each Unit consists, of one ordinary share and one warrant (“Public Warrant”). Each Public Warrant will entitle the holder to purchase one ordinary share
at an exercise price of $11.50 per share, subject to adjustment.
On
September 13, 2021, the underwriters fully exercised their over-allotment option and purchased an additional 2,250,000 Units, generating
additional gross proceeds of approximately $22.50 million, and incurring additional cash underwriting discount of approximately $0.45
million. In connection with the sale of Units pursuant to the over-allotment option, the Company sold an additional 900,000 Private Warrants
to the Sponsor and the underwriters generating additional gross proceeds of approximately $0.90 million. A total of approximately
$23.40 million of the net proceeds was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to
approximately $175.95 million.
NOTE
5 — PRIVATE WARRANTS
Concurrently
with the closing of the Initial Public Offering, the Sponsor and the underwriters purchased an aggregate of 8,400,000 Private Warrants,
generating gross proceeds of $8.40 million in aggregate in a private placement. Each Private Warrant is exercisable for one ordinary
share at a price of $11.50 per share, subject to adjustment.
As
a result of the underwriters’ election to fully exercise their over-allotment option subsequent to balance sheet date, the Sponsor
and the underwriters and its designees purchased an additional 900,000 Private Warrants, at a purchase price of $1.00 per Private Warrant.
OXUS
ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
NOTE
5 — PRIVATE WARRANTS (Continued)
If
the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Warrants
held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and
the Private Warrants will expire worthless.
NOTE
6 — RELATED PARTY TRANSACTIONS
Founder
Shares
During
the period from February 3, 2021 (inception) through March 22, 2021, the Sponsor paid $25,000 to cover certain formation and offering
costs of the Company in consideration for 8,625,000 shares of Class B ordinary shares (the “Founder Shares”).
The
Founder Shares include an aggregate of up to 1,125,000 Class B ordinary shares subject to forfeiture by the Sponsor to the extent that
the underwriters’ over-allotment is not exercised in full or in part, so that the number of Founder Shares will collectively represent
20% of the Company’s issued and outstanding shares upon the completion of the Initial Public Offering.
On
July 15, 2021, the Sponsor transferred an aggregate of 150,000 Founder Shares to the Company’s independent director nominees.
Through
July 2021, the Sponsor surrendered an aggregate 4,312,500 Founder Shares to the Company for no consideration. All shares and associated amounts have
been retroactively adjusted to reflect the share surrender.
As
of September 30, 2021, no Class B ordinary share was available for forfeiture as a result of the underwriters’ full exercise of
the over-allotment option.
Founder
Shares are subject to lock-up until (i) with respect to 50% of the Founder Shares, the earlier of one year after the date of the consummation
of the initial Business Combination and the date on which the closing price of the Class A ordinary shares equals or exceeds $12.00 per
share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading
day period commencing after the consummation of the initial Business Combination and (ii) with respect to the remaining 50% of the Founder
Shares, the one-year anniversary of the consummation of the initial Business Combination. Notwithstanding the foregoing, the Founder
Shares will be released earlier if, subsequent to the initial Business Combination, the Company consummates a liquidation, merger, share
exchange or other similar transaction which results in all of the shareholders having the right to exchange their ordinary shares for
cash, securities or other property.
OXUS
ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
NOTE
6 — RELATED PARTY TRANSACTIONS (Continued)
Underwriter
Founder Shares
On
March 23, 2021, the Company had issued to its underwriters and/or its designees, an aggregate of 400,000 shares of Class A ordinary shares
at $0.0001 per share (“Underwriter Founder Shares”). The holders of the Underwriter Founder Shares have agreed not to transfer,
assign or sell any such shares until the completion of a Business Combination. In addition, the holders have agreed (i) to waive their
redemption rights with respect to such shares in connection with the completion of a Business Combination and (ii) to waive their rights
to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete a Business Combination
within the Combination Period.
Through
June 2021, the underwriters and/or its designees effected surrendered an aggregate of 100,000 Underwriter Founder Shares to the
Company for no consideration, resulting in a decrease in the total number of Class A ordinary shares outstanding from 400,000 to 300,000.
All shares and associated amounts have been retroactively adjusted to reflect the share surrender.
In
September 2021, subscription receivable of $40 was received from the underwriters in connection with the issuance of Underwriter Founder
Shares.
Related
Party Loans
In
addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor,
or certain of the Company’s officers and directors or their affiliates may, but are not obligated to, loan the Company funds as
may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working
Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid
only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion
of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used
to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without
interest, or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible into warrants of
the post Business Combination entity. The warrants would be identical to the Private Warrants. Except for the foregoing, the terms of
such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. As of September
30, 2021, no Working Capital Loans were outstanding.
Related
Party Payable
At
close of the Initial Public Offering, the operating bank account of the Company held an excess of $0.86 million, resulting from an over
funding in connection with the close of the Initial Public Offering. On September 9, 2021, the over funding was returned to the Sponsor.
OXUS
ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
NOTE
6 — RELATED PARTY TRANSACTIONS (Continued)
Administrative
Support Agreement
The
Company has agreed to pay the Sponsor a total of up to $10,000 per month in the aggregate for up to 18 months for office space, utilities
and secretarial and administrative support. Services commenced on the date the securities were first listed on the Nasdaq and will terminate
upon the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company.
NOTE
7 — COMMITMENTS AND CONTINGENCIES
Registration
Rights
The
holders of the Founder Shares, Private Warrants, and warrants that may be issued upon conversion of Working Capital Loans (and any
ordinary shares issuable upon the exercise of the Private Warrants or warrants issued upon conversion of the Working Capital Loans
and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement, which
was signed on the effective date of the Initial Public Offering requiring the Company to register such securities for
resale (in the case of the Founder Shares, only after conversion to shares of Class A ordinary shares). The holders of these
securities will be entitled to make up to three demands, excluding short form registration demands, that the Company register such
securities. In addition, the holders will have certain “piggy-back” registration rights with respect to registration
statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection
with the filing of any such registration statements.
OXUS
ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
NOTE
7 — COMMITMENTS AND CONTINGENCIES (Continued)
Business
Combination Marketing Agreement
The
Company has engaged EarlyBirdCapital, lnc. (“EarlyBirdCapital”) and Sova Capital Limited (“Sova Capital”) as
advisors in connection with a Business Combination to assist the Company in holding meetings with its shareholders to discuss the potential
Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing
the Company’s securities in connection with a Business Combination, assist the Company in obtaining shareholder approval for the
Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The
Company will pay EarlyBirdCapital and Sova Capital a cash fee for such services upon the consummation of a Business Combination of $4.50
million (or $5.23 million if the underwriters’ over-allotment is exercised in full) that equals to 3.0% of the gross proceeds of
Initial Public Offering (exclusive of any applicable finders’ fees which might become payable).
NOTE
8 — SHAREHOLDERS’ EQUITY
Preferred
Shares - The Company is authorized to issue 5,000,000 preferred shares with a par value of $0.0001 per preferred share. As of
September 30, 2021, there were no preferred shares issued or outstanding.
Class
A Ordinary Shares - The Company is authorized to issue up to 500,000,000 shares of Class A ordinary shares, with a par value
of $0.0001 per share. Holders of the Company’s ordinary shares are entitled to one vote for each share. Through
September 30, 2021, the underwriters and/or its designees effected a surrender of an aggregate of 100,000 Class A ordinary shares to
the Company for no consideration, resulting in a decrease in the total number of Class A ordinary shares outstanding from 400,000 to
300,000. All shares and associated amounts have been retroactively adjusted to reflect the share surrender. At September 30, 2021,
there were 300,000 shares of Class A ordinary shares issued and outstanding, which are non-redeemable. This number excludes
17,250,000 shares of Class A ordinary shares subject to possible redemption.
Class
B Ordinary Shares - The Company is authorized to issue 50,000,000 Class B ordinary shares, with a par value of $0.0001 per
share. Holders of the Class B ordinary shares are entitled to one vote for each share. Through September 30, 2021, the Sponsor
effected a surrender of an aggregate of 4,312,500 Class B ordinary shares to the Company for no consideration, resulting in a
decrease in the total number of Class B ordinary shares outstanding from 8,625,000 to 4,312,500. All shares and associated amounts
have been retroactively adjusted to reflect the share surrender. As of September 30, 2021, there were 4,312,500 shares of Class B
ordinary shares issued and outstanding. No Class B ordinary share was available for forfeiture at balance sheet date, resulting from
the underwriters’ full exercise of the over-allotment option.
Holders
of Class A ordinary shares and holders of Class B ordinary shares, voting together as a single class, shall have the exclusive right
to vote for the election of directors and on all other matters submitted to a vote of the Company’s shareholder except as otherwise
required by law. The shares of Class B ordinary shares will automatically convert into shares of Class A ordinary shares on a one-for-one
basis (A) at any time and from time to time at the option of the holder thereof and (B) automatically on the business day following the
closing of the Business Combination, subject to adjustment. In the case that additional shares of Class A ordinary shares, or equity-linked
securities, are issued or deemed issued in excess of the amounts offered in the closing of a Business Combination, the ratio at which
shares of Class B ordinary shares shall convert into shares of Class A ordinary shares will be adjusted (unless the holders of a majority
of the outstanding shares of Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance)
so that the number of shares of Class A ordinary shares issuable upon conversion of all shares of Class B ordinary shares will equal,
in the aggregate, on an as-converted basis, 25% of the sum of the total number of all ordinary shares outstanding upon the completion
of the Initial Public Offering plus all shares of Class A ordinary shares and equity-linked securities issued or deemed issued in connection
with a
OXUS
ACQUISITION CORP.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
SEPTEMBER
30, 2021
NOTE
8 — SHAREHOLDERS’ EQUITY (Continued)
Class
B Ordinary Shares (Continued)
Business
Combination. In addition, the calculation mentioned above will be subject to adjustment for stock splits, stock dividends, reorganizations,
recapitalizations and the like. In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than
one to one.
Warrants
Public
Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants.
The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months
from the closing of the Initial Public Offering.
Redemption
of Warrants When the Price per Share of Class A Ordinary shares Equals or Exceeds $18.00 —once the warrants become exercisable,
the Company may redeem the outstanding Public Warrants:
|
●
|
in whole and not in part;
|
|
●
|
at a price of $0.01 per Public Warrant;
|
|
●
|
upon not less than 30 days’ prior written notice of redemption to each warrant holder; and
|
|
●
|
if, and only if, the last reported sale price of the Class A ordinary shares for any 20 trading days within
a 30 trading day period ending three business days before sending the notice of redemption to warrant holders (the “Reference Value”)
equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like).
|
In
addition, if (x) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in
connection with the closing of the Company’s initial Business Combination at an issue price or effective issue price of less
than $9.20 per share (with such issue price or effective issue price to be determined in good faith by the Company’s board of
directors and, in the case of any such issuance to our Sponsor or its affiliates, without taking into account any, Founder Shares
held by our Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the
aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds and interest thereon, available
for the funding of the Company’s initial Business Combination on the date of the consummation of the Company’s initial
Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s ordinary shares
during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business
Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be
adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per
share redemption trigger price described above in this section will be adjusted (to the nearest cent) to be equal to 180% of the
higher of the Market Value and the Newly Issued Price.
NOTE
9 — SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date financial statements were
issued. Other than as described herein, the Company did not identify any other subsequent events that would have required adjustment
or disclosure in the financial statements.