Item
1.01. Entry into a Material Definitive Agreement.
The
Business Combination Agreement
On February 23, 2023, Oxus Acquisition
Corp., an exempted company limited by shares incorporated under the laws of the Cayman Islands (“Oxus”), entered into
a Business Combination Agreement with 1000397116 Ontario Inc., a corporation incorporated under the laws of the Province of Ontario, Canada
and a wholly-owned subsidiary of Oxus (“Newco”), and Borealis Foods Inc., a corporation incorporated under the laws
of Canada (“Borealis”, or the “Company”) (as may be amended and restated from time to time, the
“Business Combination Agreement”). The Business Combination Agreement was unanimously approved by Oxus’ and Borealis’
respective board of directors. Pursuant to the Business Combination Agreement, among other things: (a) Oxus will domesticate and continue
as a corporation existing under the laws of the Province of Ontario, Canada (the “Continuance” and, Oxus as the continuing
entity, “New Oxus”); (b) on the Closing date, Newco and Borealis will amalgamate in accordance with the terms of the
plan of arrangement (the “Borealis Amalgamation” and Newco and Borealis as amalgamated, “Amalco”),
with Amalco surviving the Borealis Amalgamation as a wholly-owned subsidiary of New Oxus; and (c) on the Closing date, immediately following
the Borealis Amalgamation, Amalco and New Oxus will amalgamate (the “New Oxus Amalgamation,” and together with the
Continuance, the Borealis Amalgamation and other transactions contemplated by the Business Combination, the plan of arrangement and the
ancillary agreements, the “Proposed Transaction”), with New Oxus surviving the New Oxus Amalgamation. Capitalized terms
used in this Current Report on Form 8-K but not otherwise defined herein have the meanings given to them in the Business Combination Agreement.
Proposed
Transaction Consideration
Under the Business Combination
Agreement, the shareholders of Borealis (“Borealis Shareholders”) will receive from New Oxus, in the aggregate, a number
of shares of New Oxus equal to (a) the Borealis Value (as defined below) divided by (b) $10.00. The Borealis Value will be equal to $150
million less net indebtedness (aggregate consolidated amount of indebtedness of Borealis minus cash) (the “Borealis Value”).
Pursuant to the Business Combination
Agreement, on the Closing date (unless otherwise noted), the following will occur in the order set forth below:
| ● | on
the day prior to the Closing date, Oxus will de-register as an exempted
company in the Cayman Islands and domesticate and continue as New Oxus, a corporation existing under the laws of the Province of Ontario,
Canada; |
| ● | all
outstanding Company Convertible Instruments (excluding (A) any convertible
financing instrument of the Company that will be repaid prior to the Closing in accordance with its terms, and (B) the Remaining Company
Convertible Instruments) will convert into shares of Borealis pursuant to their terms and the terms of the applicable conversion agreements; |
| ● | all
Borealis options that are outstanding immediately prior to the Closing
will be fully vested and exercised for Borealis Shares; |
| ● | the
Borealis Amalgamation will be completed with Amalco as a surviving entity; |
| ● | the
New Oxus Amalgamation will be completed with New Oxus as a surviving entity; and |
| ● | the
New Investor Convertible Notes will be converted into shares of New Oxus
pursuant to the terms of the New Investor Note Purchase Agreement. |
Representations,
Warranties and Covenants
The
parties to the Business Combination Agreement have made customary representations and warranties for transactions of this type. In addition,
the parties to the Business Combination Agreement agreed to be bound by certain customary covenants for transactions of this type, including,
among others, covenants with respect to the conduct of the business and operations of Oxus and Borealis and their respective subsidiaries
prior to the Closing as well as additional customary covenants regarding employee benefits, indemnification of directors and officers
of the parties, notification of certain matters, public announcements relating to the Business Combination Agreement, tax matters, and
clearances and approvals by the governmental authorities. The parties agreed to use their respective commercially reasonable efforts
to consummate the Proposed Transaction.
Conditions
to the Closing
The
obligations of the parties (or, in some cases, some of the parties) to consummate the Proposed Transaction are subject to the satisfaction
or waiver of certain customary conditions to the Closing, including, among other things:
| ● | receipt
of approval by the shareholders of each of Oxus and Borealis; |
| ● | receipt
of all pre-Closing approvals or clearances reasonably required under any applicable antitrust
laws and foreign direct investment laws, including approval under the Investment Canada Act; |
| ● | receipt
by Borealis of all required third-party consents; |
| ● | no
law or order will have been passed preventing the consummation of the Proposed Transaction; |
| ● | after
giving effect to the redemptions, Oxus will have at least $5,000,001 of net tangible assets
as required by its charter; |
| ● | the
amount of Closing Available Cash (as defined in the Business Combination Agreement) is no
less than $30,000,000; |
| ● | the
amount of Borealis indebtedness does not exceed $17,000,000 at the Closing; and |
| ● | the
Registration Statement (as defined below) has been declared effective by the Securities and
Exchange Commission (the “SEC”). |
Proxy
Statement/Prospectus and Oxus Shareholder Meeting
As promptly as practicable after
the availability of certain required financial statements of Borealis, if applicable, Oxus and Borealis will prepare and file with the
SEC a Registration Statement on Form S-4 (the “Registration Statement”), which will include a proxy statement/prospectus
that will be used as a proxy statement to be used in connection with the extraordinary general meeting of the shareholders of Oxus (“Oxus
Shareholders”) to be held to consider approval and adoption of (i) the Business Combination Agreement, the ancillary agreements
and the Proposed Transaction, including Borealis Amalgamation and the New Oxus Amalgamation, (ii) the Continuance, (iii) the
issuance of New Oxus shares in connection with the Proposed Transaction as required by Nasdaq listing requirements, (iv) the New
Oxus equity plan, and (v) any other proposals the Parties deem necessary or desirable to effectuate the Proposed Transaction (collectively,
the “Oxus Proposals”).
New
Investor Convertible Note Financing
During the period from the signing
of the Business Combination Agreement and until the earlier of (A) the termination of the Business Combination Agreement in accordance
with its terms or (B) the Closing, Borealis may execute note purchase, subscription or other similar agreements (the “New Investor
Note Purchase Agreement”) with a potential investor or potential investors, in each case, introduced to Borealis by Oxus or
Oxus Capital PTE. Ltd. (“Sponsor”) (the “New Investors”). On February 8, 2023, a New Investor Note
Purchase Agreement for an amount of $20,000,000 was executed by a New Investor. The Minimum Cash Condition set forth in the Business Combination
Agreement will be reduced by any cash amounts received by the Company prior to the Closing in connection with (A) the New Investor Convertible
Note Financing or (B) any Permitted Company Financing (as provided below). All New Investor Convertible Notes issued pursuant to the New
Investor Note Purchase Agreement will convert into New Oxus Shares immediately following the New Oxus Amalgamation. Funding received by
Borealis prior to the Closing in connection with the New Investor Convertible Note Financing will be included in the calculation of the
Closing Available Cash.
Permitted Borealis Financing
During the period from the signing
of the Business Combination Agreement and until the earlier of (A) the termination of the Business Combination Agreement in accordance
with its terms or (B) the Closing, Borealis may execute subscription, note purchase or other similar agreements providing for the issuance
(a “Permitted Borealis Financing”) by Borealis of equity or equity-linked securities of Borealis or any Borealis subsidiary
on terms that are reasonably satisfactory to Oxus if: (A) the aggregate gross cash proceeds from any such Permitted Borealis Financing,
when added to the aggregate gross cash proceeds from any issuances of New Investor Convertible Notes and Sponsor Convertible Notes does
not exceed $100,000,000 and (B) the issuance of any equity or equity-linked securities in such Permitted Borealis Financing will be at
a price that implies a post-money valuation of Borealis of not less than the Borealis Value.
Sponsor
Convertible Note Financing
The Company executed a note purchase
agreement with Sponsor on October 21, 2022 (the “Sponsor Note Purchase Agreement”, as amended and restated on November
14, 2022) for an aggregate principal amount of $20,000,000, which funding was completed by Sponsor on December 9, 2022. The Sponsor Convertible
Notes issued to Sponsor pursuant to the Sponsor Note Purchase Agreement will convert into Borealis Shares at the Closing pursuant to the
terms of the Sponsor Note Purchase Agreement. Funding received by Borealis prior to the Closing in connection with the Sponsor Note Purchase
Agreement will not be included in the calculation of the Closing Available Cash.
Termination
The
Business Combination Agreement may be terminated by the parties under certain circumstances prior to the Closing, including, among others:
| ● | by
mutual agreement of Oxus and Borealis; |
| ● | by
either Oxus or Borealis for the other party’s uncured breach; |
| ● | by
either Oxus or Borealis, if a governmental authority has passed a law or order preventing
the consummation of the Proposed Transaction; |
| ● | by
either Oxus or Borealis, if the Closing does not occur by December 8, 2023 (the “Outside
Date”); |
| ● | by
either Oxus or Borealis, if either (A) any of the Oxus Proposals fails to receive the requisite
approval from Oxus Shareholders or (B) Borealis required shareholder approval has not been
obtained from Borealis Shareholders; |
| ● | by
Oxus, if the PCAOB Audited Financials have not been delivered to Oxus by Borealis on or before
May 30, 2023; or |
| ● | by
Oxus, upon occurrence of a Company Material Adverse Effect. |
Expenses;
Termination Fee
Pursuant to the Business Combination
Agreement, generally, prior to and until the Closing, all transaction expenses will be paid by the party incurring such transaction expenses.
Expenses related to (A) preparation and soliciting proxy statement and filing of the Registration Statement and all fees and expenses
incurred by Oxus or Sponsor in connection with and Extension Expenses including the shareholder proposal to amend Oxus’ charter
to extend the time period for Oxus to consummate a business combination (including mailing to Oxus Shareholders a definitive proxy statement
relating to the proposal), (B) anti-trust or regulatory filings and expenses related to filings with or approvals from Nasdaq and (C)
the reconciliation, and related accounting adjustments, of the financial statements of Borealis, in accordance with U.S. GAAP principles
will be borne by Oxus and Borealis equally. However, Borealis’ responsibility to pay such expenses will be capped at $15 million.
Borealis will pay to Oxus a termination
fee of $5,000,000 (the “Termination Fee”) if Oxus or Borealis (as applicable) terminates the Business Combination Agreement
pursuant to:
| (1) | Section
9.01(b) (if Borealis Amalgamation has not occurred prior to Outside Date), |
| (2) | Section
9.01(e) (if required approval from Borealis shareholders have not been obtained), |
| (3) | Section
9.01(h) (if the PCAOB Audited Financials are not delivered on or before May 30, 2023) and |
| (4) | Section
9.01(i) (if a Company Material Adverse Effect has occurred). |
In the event of termination by
Oxus pursuant to items (1), (3) and (4) above, the Termination Fee will be payable by Borealis only in the event of misconduct by Borealis,
and the Termination Fee will not be payable if such termination is due to an action or omission by a third-party and Borealis has acted
in good faith and in a timely manner to cure such third-party action or omission, but failed to do so not due to Borealis’ misconduct.
Shareholder
Support Agreements
Concurrently
with the execution and delivery of the Business Combination Agreement, Oxus, Borealis and certain Borealis Shareholders entered into
Shareholder Support Agreements pursuant to which, among other things, such Borealis Shareholders have agreed to vote their Borealis shares
in favor of the Proposed Transaction and not sell or transfer their Borealis shares.
The
foregoing description of the Shareholder Support Agreements is qualified in its entirety by reference to the full text of the form of
Shareholder Support Agreement, a copy of which is included as Exhibits 10.1 to this Current Report on Form 8-K and incorporated herein
by reference.
Sponsor
Support Agreement
Concurrently
with the execution and delivery of the Business Combination Agreement, Oxus, Borealis and the Sponsor entered into the Sponsor Support
Agreement pursuant to which, among other things, Sponsor agreed to (A) vote its founder shares in favor of the Proposed Transaction and
the Oxus Proposals, (B) not redeem its founder shares, (C) waive certain of its anti-dilution rights, (D) convert the Sponsor Convertible
Notes, and (E) forfeit certain Sponsor founder shares as a part of incentive equity compensation for directors, officers and employees
of New Oxus (subject to terms and conditions set forth in the Sponsor Support Agreement).
The
foregoing description of the Sponsor Support Agreement is qualified in its entirety by reference to the full text of the Sponsor Support
Agreement, a copy of which is included as Exhibits 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
Registration
Rights Agreement
In connection with the Closing,
Oxus and certain Borealis Shareholders and certain Oxus Shareholders (the “Holders”) will enter into the Registration
Rights Agreement, pursuant to which Oxus will be obligated to file a registration statement to register the resale of certain securities
of Oxus held by the Holders. The Registration Rights Agreement will also provide the Holders with “piggy-back” registration
rights, subject to certain requirements and customary conditions.
The foregoing description of the
Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of Registration Rights Agreement,
a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K and incorporated herein by reference.
Lock-Up Agreements
In connection with the Closing,
Oxus and certain directors/officers/five percent (5%) or greater shareholders of Borealis (the “Subject Party”) will
enter into Lock-Up Agreements, pursuant to which (A) fifty percent (50%) of the shares of New Oxus held by the Subject Party (the “Restricted
Securities”) will be locked-up during the period commencing from the Closing and ending on the earlier to occur of (i) twelve
(12) months after the date of the Closing and (ii) the date on which the closing price of common shares of New Oxus equals or exceeds
$12.00 per share (as adjusted to take into account any stock split, stock dividend, reverse stock split, recapitalization or similar event)
for any twenty (20) trading days within a thirty (30)-trading day period starting after the Closing, and (B) fifty percent (50%) of the
Restricted Securities will be locked-up during the period commencing from the Closing and ending on twelve (12) months after the date
of the Closing, subject to certain specifications and exceptions.
The foregoing description of the
Lock-up Agreement is qualified in its entirety by reference to the full text of the form of Lock-up Agreement, a copy of which is filed
as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference.