The accompanying notes are an integral
part of the condensed financial statements.
The accompanying notes are an integral
part of the condensed financial statements.
The accompanying notes are an integral
part of the condensed financial statements.
The accompanying notes are an integral
part of the condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
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 March 31, 2022, the
Company had not commenced any operations. All activity for the period from February 3, 2021 (inception) through March 31, 2022, 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 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”).
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
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 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 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 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.
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
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 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 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 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 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 CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
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.
Going Concern
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 March 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 March 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. The Company’s plan is to complete a business combination
or obtain an extension on or prior to March 8, 2023, however it is uncertain that the Company will be able to consummate a Business Combination
or obtain an extension by this time. No adjustments have been made to the carrying amounts of assets or liabilities should the Company
be required to liquidate after March 8, 2023.
As of March 31, 2022, the
Company had $0.95 million in its operating bank account, $175.97 million of cash 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 of $0.71 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.
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS
(Continued)
Going Concern (Continued)
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.
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 condensed financial statements. The condensed 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. 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.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed
financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”)
for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes
required by GAAP. In the opinion of the Company’s management, the accompanying condensed financial statements include all adjustments,
consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, results of operations
and cash flows for the period presented.
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
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 condensed 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.
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 $0.95 million
and $1.12 million in cash as of March 31, 2022 and December 31, 2021, respectively. 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
March 31, 2022 and December 31, 2021, respectively.
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cash Held in Trust Account
At March 31, 2022 and December
31, 2021, the Company had $175.97 million and $175.95 million respectively, of cash held in the Trust Account that were held in U.S. Treasury
Securities.
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 requires 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 March 31, 2022 and
December 31, 2021, the Class A ordinary shares reflected on the balance sheet are reconciled in the following table:
| |
March 31,
2022 | | |
December 31,
2021 | |
Gross proceeds | |
$ | 172,500,000 | | |
$ | 172,500,000 | |
Less: | |
| | | |
| | |
Proceeds allocated to public warrants | |
| (10,522,500 | ) | |
| (10,522,500 | ) |
Ordinary shares issuance costs | |
| (3,874,702 | ) | |
| (3,874,702 | ) |
Sub-total | |
| (14,397,202 | ) | |
| (14,397,202 | ) |
Plus: | |
| | | |
| | |
Remeasurement of Class A ordinary shares to initial redemption amount | |
| 17,847,202 | | |
| 17,847,202 | |
Remeasurement of carrying value to redemption value | |
| 18,324 | | |
| - | |
Class A ordinary shares subject to possible redemption | |
$ | 175,968,324 | | |
$ | 175,950,000 | |
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. The Company recorded $3.87 million of offering costs as a reduction of temporary equity and $0.28
million of offering costs as a reduction of permanent 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).
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (Continued)
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 5). 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
March 31,
2022 | | |
For the Period from
February 3, 2021
(inception) through
March 31,
2021 | |
| |
| | |
| |
Ordinary shares subject to possible redemption | |
| | |
| |
Numerator: | |
| | |
| |
Net loss allocable to Class A ordinary shares subject to possible redemption | |
$ | (434,895 | ) | |
$ | - | |
Denominator: | |
| | | |
| | |
Weighted average redeemable Class A ordinary shares, basic and diluted | |
| 17,250,000 | | |
| - | |
Basic and diluted net loss per share, redeemable Class A ordinary shares | |
$ | (0.03 | ) | |
$ | - | |
| |
| | | |
| | |
Non-redeemable ordinary shares | |
| | | |
| | |
Numerator: | |
| | | |
| | |
Net income loss allocable to non-redeemable ordinary shares | |
$ | (116,287 | ) | |
$ | (18,708 | ) |
Denominator: | |
| | | |
| | |
Weighted average non-redeemable ordinary shares, basic and diluted | |
| 4,612,500 | | |
| 3,798,214 | |
Basic and diluted net loss per share, non-redeemable ordinary shares | |
$ | (0.03 | ) | |
$ | (0.00 | ) |
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 condensed balance sheets.
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
FASB ASC Topic 740, “Income
Taxes” 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. A tax position related to the benefits recognized must be more likely than
not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of March 31, 2022. 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 as of March 31, 2022. The Company is subject to income tax examinations by major taxing authorities
since inception in 2021.
The Company’s management
determined that the Cayman Islands is the Company’s only major tax jurisdiction as of March 31, 2022. There is currently no income
taxation imposed on the Company by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes
are not levied on the Company, therefore, income taxes (current and deferred) are not reflected in the Company’s condensed financial
statements as of March 31, 2022.
In accordance with federal
income tax regulations, income taxes are not levied on the Company, but rather on the individual owners. United States (“U.S.”)
taxation would occur on the individual owners if certain tax elections are made by U.S. owners and the Company were treated as a passive
foreign investment company (PFIC). Additionally, U.S. taxation could occur to the Company itself if the Company is engaged in a U.S. trade
or business. The Company is not expected to be treated as engaged in a U.S. trade or business at this time.
The Company is currently
not aware of any issues under review that could result in significant payments, accruals or material deviation from its tax positions.
The Company’s management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted
would have a material effect on the accompanying condensed financial statements.
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.
In addition to the 23,400,000
warrants (representing 15,000,000 Public Warrants (as defined at Note 3) 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 3) 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.
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements
In August 2020, FASB issued
Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain
financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion
features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts
in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments
that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including
the requirement to use the if-converted method for all convertible instruments.
The provisions of ASU 2020-06
are applicable for fiscal years beginning after December 15, 2023, with early adoption permitted no earlier than fiscal years beginning
after December 15, 2020. The Company is currently evaluating the impact of ASU 2020-06 on its condensed financial statements.
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 condensed financial statements.
NOTE 3 — 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 $23.4 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.
In connection with the Initial
Public Offering, the Company granted the underwriters an option to purchase 2,250,000 shares of the Company’s ordinary share at
the Initial Public Offering price, or $10.00 per share, for 45 days commencing on September 8, 2021 (grant date). Since this option extended
beyond the closing of the initial public offering, this option feature represented a call option that was accounted for under ASC 480,
Distinguishing Liabilities from Equity. Accordingly, the call option has been separately accounted for at a fair value with the change
in fair value between the grant date and September 13, 2021 recorded as other income. The Company used the Black-Scholes valuation model
to determine the fair value of the call option at the grant date and again at September 13, 2021 (refer to Note 8 for fair value information).
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 4 — 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.
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 5 — 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.
The allocation of the
Founder Shares to the director nominees is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation”
(“ASC 718”). Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value
upon the grant date. The fair value of the 150,000 Founder Shares granted to the Company’s independent director nominees in
July 2021 was $0.38 million or $2.54 per share. The Founder Shares were granted subject to a performance condition (i.e., the
occurrence of a Business Combination). Compensation expense related to the Founder Shares is recognized only when the performance
condition is met under the applicable accounting literature in this circumstance. As of March 31, 2022 and December 31, 2021, the
Company determined the performance conditions had not been met, and, therefore, no stock-based compensation expense has been
recognized. Stock-based compensation would be recognized at the date the performance conditions are met (i.e., upon consummation of
a Business Combination) in an amount equal to the number of Founder Shares vested times the grant date fair value per share (unless
subsequently modified) less the amount initially received for the purchase of the Founder Shares.
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 March 31, 2022 and
December 31, 2021, no Class B ordinary shares were available for forfeiture as a result of the underwriters’ full exercise of
the over-allotment option.
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 5 — RELATED PARTY TRANSACTIONS (Continued)
Founder Shares (Continued)
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 releases
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.
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.
Promissory Note — Related Party
On March 22, 2021, the Sponsor
issued an unsecured promissory note to the Company (the “Promissory Note”), pursuant to which the Company may borrow up to
an aggregate principal amount of $0.30 million. The Promissory Note is non-interest bearing and payable on the earlier of June 30, 2021
or the consummation of the Initial Public Offering.
On June 25, 2021, the terms
of the Promissory Note were revised to be payable on the earlier of December 31, 2021, or the consummation of the Proposed Public Offering.
On September 8, 2021, the
outstanding balance of $0.28 million was repaid in full.
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 5 — RELATED PARTY TRANSACTIONS (Continued)
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 March 31, 2022, no Working Capital Loans were outstanding.
NOTE 6 — COMMITMENTS AND CONTINGENCIES
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.
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.
For the three months ended
March 31, 2022, the Company accrued $30,000 for these services, of which such amount is included in the operating costs on accompanying
condensed statement of operations.
For the period from February
3, 2021 (inception) through March 31, 2021, such fees were not recorded.
Registration Rights
Pursuant to a registration
rights agreement entered into on September 2, 2021, 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) are entitled to registration 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 CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE 6
— 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
7 — 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 March 31, 2022 and December
31, 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 December 31, 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 March 31, 2022 and December 31, 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 December 31, 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.
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE
7 — SHAREHOLDERS’ EQUITY (Continued)
Class
B Ordinary Shares (Continued)
All
shares and associated amounts have been retroactively adjusted to reflect the share surrender. As of March 31, 2022 and December 31,
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 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). |
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE
7 — SHAREHOLDERS’ EQUITY (Continued)
Warrants
(Continued)
In
addition, if (x) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in
connection with the closing of our 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
8 – FAIR VALUE MEASUREMENTS
The
fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would
have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction
between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company
seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable
inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is
used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and
liabilities:
● | Level
1 – Quoted prices in active markets for identical assets or liabilities. An active
market for an asset or liability is a market in which transactions for the asset or liability
occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
● | Level
2 – Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include
quoted prices in active markets for similar assets or liabilities and quoted prices for identical
assets or liabilities in markets that are not active. |
● | Level
3 – Unobservable inputs based on the Company’s assessment of the assumptions
that market participants would use in pricing the asset or liability |
OXUS ACQUISITION CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 2022
NOTE
8 – FAIR VALUE MEASUREMENTS (Continued)
The
following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis
as of March 31, 2022 by level within the fair value hierarchy:
| |
Quoted Prices in
Active Markets | | |
Significant Other
Observable Inputs | | |
Significant Other
Unobservable
Inputs | |
Description | |
(Level 1) | | |
(Level 2) | | |
(Level 3) | |
Asset: | |
| | |
| | |
| |
Marketable securities held in Trust Account | |
$ | 175,968,324 | | |
$ | - | | |
$ | - | |
| |
$ | 175,968,324 | | |
$ | - | | |
$ | - | |
The
following table presents information about the Company’s financial assets that are measured at fair value on a recurring basis
as of December 31, 2021 by level within the fair value hierarchy:
| |
Quoted Prices in
Active Markets | | |
Significant Other
Observable Inputs | | |
Significant Other
Unobservable
Inputs | |
Description | |
(Level 1) | | |
(Level 2) | | |
(Level 3) | |
Asset: | |
| | |
| | |
| |
Marketable securities held in Trust Account | |
$ | 175,953,964 | | |
$ | - | | |
$ | - | |
| |
$ | 175,953,964 | | |
$ | - | | |
$ | - | |
NOTE
9 — SUBSEQUENT EVENTS
The
Company evaluated subsequent events and transactions that occurred after the condensed 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.