8-K/A: Borealis Foods Inc. Completes Business Combination with Oxus Acquisition Corp., Files Amended 8-K

Borealis Foods Inc. has finalized its business combination with Oxus Acquisition Corp., resulting in a newly formed public entity and the filing of an amended 8-K report to include audited financials and business updates.

Summary

• Borealis Foods Inc. completed its business combination with Oxus Acquisition Corp. on February 7, 2024.
• The transaction involved a series of amalgamations and domestication, resulting in Borealis Foods Inc. becoming a publicly traded company.
• Oxus issued 21,378,890 common shares, which became common shares of the new Borealis Foods Inc.
• Borealis common shares were exchanged for New Borealis common shares based on a formula that considered a $150 million valuation minus $17 million in net indebtedness, divided by $10 per share.
• The exchange rate was 0.0661 New Borealis shares for each Borealis share, based on 201,206,834 outstanding Borealis shares.
• The aggregate transaction consideration was 13,300,000 New Oxus common shares.
• The amended 8-K includes audited financial statements for Oxus and Borealis for 2022 and 2023, as well as pro forma combined financial information for 2023.
• The document also details various agreements entered into in connection with the business combination, including shareholder support agreements, sponsor support agreements, and lock-up agreements.

Sentiment

Score: 7

Explanation: The document is generally positive, highlighting the successful completion of the business combination and the company's future plans. However, it also acknowledges risks and challenges, which tempers the overall sentiment.

Positives

• The business combination provides Borealis Foods Inc. with access to public markets and capital.
• The conversion of $30 million in new investor notes into equity strengthens the company's balance sheet.
• The lock-up agreements provide stability and reduce the risk of large-scale share sales.
• The board nomination agreement with Belphar Ltd. ensures representation of a significant shareholder.
• The inclusion of audited financial statements provides transparency and credibility.

Negatives

• The document highlights that a majority of the Closing Transaction Fees were deferred to the first anniversary of the Closing Date.
• The document mentions that Oxus had material weaknesses as of December 31, 2023 relating to its internal controls over financial reporting.
• The document notes that New Borealis will incur significant increased costs as a result of operating as a public company.

Risks

• Borealis has a limited operating history, making it difficult to evaluate its business and prospects.
• The company may be unable to execute its business plan or maintain its competitive position if it fails to maintain adequate operational and financial resources.
• A significant portion of Borealis revenue is concentrated with a limited number of customers.
• Adverse climate conditions may have an adverse effect on Borealis business.
• Borealis depends on suppliers, which may materially adversely affect its operating results and financial position.
• Manufacturing and production forecasts are based on multiple assumptions, and overestimation of demand could lead to underutilized assets.
• Borealis may experience volatility in costs for ingredients and packaging.
• The company's future success depends on its ability to maintain its technological leadership and develop new products.
• Borealis business depends on its use of proprietary technology relying heavily on laws to protect.
• New Borealis management team has limited experience managing a public company.
• U.S. shareholders may not be able to obtain judgments or enforce civil liabilities against the company or its officers.
• New Borealis will incur significant increased costs as a result of operating as a public company.

Future Outlook

The document includes forward-looking statements regarding New Borealis' expectations, beliefs, intentions, projections, and predictions, but cautions that actual results may differ materially due to various risks and uncertainties. The company does not undertake any obligation to update forward-looking statements.

Management Comments

• Reza Soltanzadeh, M.D. is a co-founder of Borealis and has served as its Chief Executive Officer and a member of Borealis board of directors since July 2019.
• Barthelemy Helg is a co-founder of Borealis and has served as the Chairman of Borealis board of directors since July 2019.
• Pouneh Rahimi has served as Borealis Chief Legal Officer since July 2019.
• Steve Wegrzyn has served as Borealis Chief Financial Officer since July 2020.
• Matt Talle has served as Chief Strategy Officer of Palmetto Food Group (a subsidiary of Borealis) since January 2020.
• Henry Wong has served as Chief Marketing Officer of Palmetto Food Group (a subsidiary of Borealis) since 2021.

Industry Context

The announcement reflects a trend of special purpose acquisition companies (SPACs) merging with private companies to facilitate their entry into public markets. The focus on sustainable and nutritious food products aligns with growing consumer demand for healthier and environmentally conscious options.

Comparison to Industry Standards

• The document does not provide specific financial metrics for direct comparison to industry standards.
• However, the document does mention that the company is designed to align with compensation rules applicable to smaller reporting companies.
• The document does not provide specific details on comparable companies or projects.

Management Changes

Corporate Governance

Legal Proceedings

• There is no material litigation, arbitration, or governmental proceeding currently pending against New Borealis or any members of its management team.

Related Party Transactions

• The document references certain related party transactions, which are described in the Proxy Statement/Prospectus in the sections titled Certain Borealis Relationships and Related Person Transactions and Certain Oxus Relationships and Related Person Transactions.

Stakeholder Impact

• Shareholders of Oxus and Borealis have become shareholders of the new public entity, Borealis Foods Inc.
• Employees of both companies are now part of the combined entity.
• Customers and suppliers of both companies will be impacted by the merger, but the document does not specify the nature of the impact.
• Creditors of both companies will be impacted by the merger, but the document does not specify the nature of the impact.

Next Steps

• New Borealis will continue under the name Borealis Foods Inc.
• New Borealis will determine the annual compensation to be paid to the members of the New Borealis Board.
• New Borealis intends to post any amendments to or any waivers from a provision of the Code of Ethics on its website.

Key Dates

Keywords

Business Combination, Borealis Foods Inc., Oxus Acquisition Corp., Merger, SPAC, Financial Statements, Share Exchange, Convertible Notes, Lock-Up Agreements, Public Company