Borealis Foods Inc. 10-K

Item 8. Financial Statements and Supplementary Data. The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report. An index of those financial statements is found in Item 15 of Part IV of this Annual Report. 26 Item 9. Changed in and Disagreements with Accountants on Accounting and Financial Disclosure. On February 7, 2024, we approved the appointment of Berkowitz Pollack Brant, Advisors + CPAs (“ BPB ”) as our independent registered public accounting firm to audit our consolidated financial statements for the year ended December 31, 2024. BPB served as the independent registered public accounting firm of Legacy Borealis prior to the Transaction. Accordingly, Marcum LLP (“ Marcum ”), Oxus’ independent registered public accounting firm prior to the Transaction, was informed on February 7, 2024 that it will be dismissed as our independent registered public accounting firm, effective immediately upon the filing of this Annual Report for Oxus, pre-business combination SPAC. The report of Marcum on Oxus’ balance sheet as of December 31, 2023 and December 31, 2022 and the related statements of operations, changes in shareholders’ (deficit) equity and cash flows for the year ended December 31, 2022 and for the period from February 3, 2021 (inception) through December 31, 2021, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope, or accounting principles, except for an explanatory paragraph in such report regarding the substantial doubt about Oxus’ ability to continue as a going concern. During the period from February 3, 2021 (inception) through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, there were no “disagreements” (as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act) between Oxus and Marcum on any matter of accounting principles or practices, financial disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused it to make reference to the subject matter of the disagreements in its reports on Oxus’ financial statements for such periods. During the period from February 3, 2021 (inception) through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act), except that for the quarters ended September 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022, September 30, 2022, December 31, 2022, March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023, based upon an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, the Chief Executive Officer and the Chief Financial Officer of Oxus concluded that its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to its accounting for complex financial instruments and prepaid expenses, as well as the chief executive officer having administrative access to the Company’s financial reporting system. Based on the foregoing, it was determined that Oxus had material weaknesses as of December 31, 2023 relating to its internal controls over financial reporting. During the period from February 3, 2021 (inception) through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, we did not consult with BPB regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the financial statements of Oxus or us, and no written report or oral advice was provided that BPB concluded was an important factor considered by us in reaching a decision as to the accounting, auditing, or financial reporting issue; or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act). Item 9.A. Controls and Procedures. Limitations on effectiveness of controls and procedures In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. 27 Evaluation of disclosure controls and procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated, as of the end of the period covered by this Annual Report, the effectiveness of Oxus’ disclosure controls and procedures (as defined in Rules 13a-15e and 15d-15e under the Exchange Act). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that Oxus’ disclosure controls and procedures were not effective at the reasonable assurance level. Management’s annual report on internal control over financial reporting As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Oxus’ internal control over financial reporting was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Oxus’ internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in “Internal Control — Integrated Framework (2013).” Based on this assessment, our management concluded that our internal control over financial reporting was not effective as of December 31, 2023, due to its accounting for complex financial instruments and the Company has not evidenced review of the Oxus’ financial statements, which includes the review of journal entries, balance sheet reconciliations, prepaid expenses, as well as the chief executive officer having administrative access to the Oxus financial reporting system. Attestation report of the registered public accounting firm This Annual Report does not include an attestation report of our independent registered public accounting firm due to an exemption established by the JOBS Act for “emerging growth companies.” Changes in internal control over financial reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9.B. Other Information. None . Item 9.C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 28 Part III Item 10. Directors, Executive Officers, and Corporate Governance. Directors and Executive Officers The following table sets forth, as of March 22, 2024, the name, age, and position of each of our executive officers and directors. Name Age Position/Title Executive Officers: Reza Soltanzadeh 51 Director and Chief Executive Officer Pouneh Rahimi 56 Chief Legal Officer Stephen Wegrzyn 59 Chief Financial Officer Matt Talle 62 Chief Strategy Officer Henry Wong 57 Chief Marketing Officer Directors: Ertharin Cousin 66 Director Barthelemy Helg 58 Non-executive Chairman and Director Shukhrat Ibragimov 38 Director Kanat Mynzhanov (1)(2)(3) 40 Director Steven Oyer (1)(2)(3) 68 Director Shiv Vikram Khemka (1)(2)(3) 61 Director (1) Member of the audit committee (2) Member of the compensation committee (3) Member of the nominating and corporate governance committee Reza Soltanzadeh , M.D. is a co-founder and has served as our Chief Executive Officer and a member of our board of directors since July 2019. Prior to our founding, Dr. Soltanzadeh served as the Chief Executive Officer of IIIC Investment Group, an emerging markets multibillion-dollar food-focused buyout firm, from February 2003 to May 2016. Dr. Soltanzadeh has continued to serve as a founder and partner of Z Ventures, Inc., an early-stage green technology investment company, since its founding in March 2008. Dr. Soltanzadeh obtained his M.D. from the University of Manipal, India. Dr. Soltanzadeh is qualified to serve on our Board due to his business and technical expertise, along with his strategic insight into our business as our current Chief Executive Officer. Barthelemy Helg is a co-founder and has served as the Chairman of our board of directors since July 2019. Mr. Helg has served as Chairman of Dara Capital AG, a FINRA and SEC registered investment advisory and wealth management company since March 2015. Mr. Helg currently serves as a Director of AB2 Bio Ltd, a biotech company he co-founded focused on treatment of rare autoimmune diseases since July 2010. Mr. Helg served as Managing Partner of Lombard Odier & Co, where he was a member of the Finance Risk and Credit committees, from April 2000 to December 2006. Prior to that, he was Vice President for Mergers and Acquisitions of Nestle S.A. from January 1998 to March 2000. Mr. Helg began his carrier as an investment banker at Goldman Sachs. Mr. Helg obtained his M.L. from the University of Geneva, Switzerland, his L.L.M. from New York University and an MBA from Harvard Business School. He is also admitted to the New York Bar. Mr. Helg is qualified to serve on our Board due to his extensive experience working with entrepreneurial companies and his experience in the food industry. 29 Pouneh Rahimi has served as our Chief Legal Officer since July 2019. Ms. Rahimi also serves as legal counsel at Rahimi Law Office, a position she has held since September 2003. In this role, Ms. Rahimi serves as part-time general counsel to select technology companies, addressing their day-to-day legal matters arising in connection with ongoing operations including negotiation of strategic contracts and technology licensing. Ms. Rahimi has over 25 years of experience working with companies in the high-tech industry both as a lawyer and trusted business advisor. Ms. Rahimi’s practice has focused on general corporate and business matters including corporate governance and compliance, intellectual property development and licensing, trademarks (in the U.S. and Canada), and private debt and equity financing. Earlier in her career, Ms. Rahimi served as a general counsel to MRO Software, Inc. formally a publicly traded company on Nasdaq, as well as a corporate associate at Nixon Peabody LLP. Ms. Rahimi obtained her J.D. from the New England School of Law and her B.A. from McGill University. Ms. Rahimi is licensed to practice law in New York, Massachusetts, and Ontario. Steve Wegrzyn has served as our Chief Financial Officer since July 2020. Prior to joining us, Mr. Wegrzyn served as the Interim Chief Financial Officer and Integration Specialist for Shed Financial Services, a financial services company, from January 2019 to July 2020. Prior to Shed Financial Services, Mr. Wegrzyn served as Chief Financial Officer for Diesel Laptops, an automotive software company, from January 2018 to November 2018. Mr. Wegrzyn held several interim CFO consulting positions from January 2015 to March 2018 in various industries including computer manufacturing, chemical manufacturing, waste transportation, trucking, and food manufacturing. Mr. Wegrzyn began his career as an accountant at Ernst and Young. Mr. Wegrzyn obtained his B.S. in Accounting and Finance from the Darla Moore School of Business of the University of South Carolina. Matt Talle has served as Chief Strategy Officer of Palmetto Food Group (a subsidiary of ours) since January 2020. Prior to joining Palmetto Food Group, Mr. Talle held multiple leadership roles with increasing responsibility at Nissin Foods U.S. where he worked for 30 years. During his tenure at Nissin Foods, Mr. Talle served as Vice President of Business Development from June 2015 to December 2019, as Executive Vice President, Board of Director from March 2010 to June 2015, and from March 2008 to June 2010, Mr. Talle served as of Vice President of sales and Marketing. Mr. Talle obtained his B.S., Ag-Business from California Polytechnic University. Henry Wong has served as Chief Marketing Officer of Palmetto Food Group (a subsidiary of ours) since 2021. Mr. Wong has also served as President and Creative Strategist of Vyoo Brand + Content, a branding and marketing agency, since September 2016. His past experience also includes being Sr. VP of Global Ad Agency Saatchi & Saatchi as well as marketing for such food brands as Maple Leaf Foods, P&G, and Hormel Foods. Mr. Wong holds bachelor degrees from Toronto Metropolitan University and the University of Toronto in Media Studies and Film. Ertharin Cousin became a director of ours on February 7, 2024 pursuant to the terms of the Plan of Arrangement. Since September 2019, Ms. Cousin has served as Founder, President and Chief Executive Officer of Food Systems For The Future Institute, a non-profit organization to catalyze, enable and scale market-driven agtech, foodtech, and food innovations, and also as Visiting Scholar, Spogli Institute for the Study of International Relations, Center for Food and Environment at Stanford University. She has served as Distinguished Fellow of The Chicago Council on Global Affairs, a global affairs think tank, since June 2017. Ms. Cousin previously served at Stanford University as Payne Distinguished Lecturer and Visiting Fellow, Spogli Institute for the Study of International Relations, Center for Food and Environment from September 2017 to June 2019. From April 2012 to April 2017, Ms. Cousin served as Executive Director of the United Nations World Food Programme, the food-assistance branch of the United Nations, and she served as Ambassador and Permanent Representative to the United Nations Food and Agriculture Agencies on behalf of the U.S. Department of State from August 2009 to April 2012. Ms. Cousin previously served in a variety of executive roles between 1987 and 2009, including Founding President and Chief Executive Officer of The Polk Street Group, a management services company; Executive Vice President and Chief Operating Officer of America’s Second Harvest; Senior Vice President, Public Affairs for Albertsons Companies; White House Liaison and Special Advisor to the Secretary for the 2016 Olympics for the U.S. Department of State; and Assistant Attorney General for The State of Illinois. Ms. Cousin currently serves a member of the Supervisory Board of Bayer AG and the Board of Directors of Mondelez International, Inc. Ms. Cousin earned a B.A. at the University of Illinois at Chicago and received her J.D. from the University of Georgia School of Law. 30 Shukhrat Ibragimov became a director of ours on February 7, 2024 pursuant to the terms of the Plan of Arrangement. Mr. Ibragimov serves as member of the Board of Directors of Eurasian Resources Group (ERG), a leading natural resources (ferrochrome, iron, aluminum) company with the integrated mining, processing, energy, logistics and marketing operations based mainly in Kazakhstan and operating globally (extraction and processing of metals), since March 2021. Prior to his appointment to the Board of Directors of ERG, Mr. Ibragimov served as ERG’s Head of Business Development since 2015. Mr. Ibragimov currently also serves as member of the Boards of Directors of Eurasia Insurance Company JSC, Eurasian Financial Company JSC, Eurasian Bank JSC. In 2020, Mr. Ibragimov founded Eurasian Space Ventures LLP (ESV) based in Kazakhstan, venture fund investing in startups in aerospace industry. Through ESV, Mr. Ibragimov controls BITEEU, a cryptocurrency exchange operating globally. Mr. Ibragimov also is a co-founder of SPRK Music, a music platform that helps musicians to be discovered via a dedicated platform. Mr. Ibragimov graduated from the European Business School London with bachelor degree and the Beijing Language and Culture University with masters’ degree. Kanat Mynzhanov became a director of ours on February 7, 2024 pursuant to the terms of the Plan of Arrangement. Mr. Mynzhanov has served as Oxus’ Chief Executive Officer and director since Oxus’ inception in February 2021. Mr. Mynzhanov led and co-founded a hedge fund, Bellprescot Prime Fund, and asset management firm Bellprescot Asset Management in September 2016. He served as the director of the investment advisory firm, Bellprescot Ltd. from September 2016 until April 2021. He served as the chief investment officer of Bellprescot Asset Management from September 2016 to June 2020. The hedge fund’s primary focus of investments was technology driven public companies with leading and disruptive products and service, including internet of things and cloud, autonomous driving, artificial intelligence, machine learning, semiconductors, cybersecurity and robotics. Since 2018, Mr. Mynzhanov advised on several private equities deals in fintech (payments, remittances and alternative financing), mobility (including EV battery metals and EV battery technology) and structured products, including tokenization and syndicated co-lending. Prior to founding the hedge fund, Mr. Mynzhanov served as the head of investments at Kazatomprom-Damu, an investment subsidiary of NAC Kazatomprom JSC, where he led and mentored a team of highly skilled investment managers responsible for mergers and acquisitions, joint ventures and business development across metals & mining, rare metals and alternative energy industries. Mr. Mynzhanov joined NAC Kazatomprom JSC in 2014 as an investment manager and during his time, he oversaw numerous projects and established strong connections with some of the largest global firms in the industry. From March 2011 to March 2014, Mr. Mynzhanov consulted and led the business development of a tungsten concentrate producer in CIS region. From November 2008 to March 2011, Mr. Mynzhanov led and participated in operational, commercial and investment management of oil tankers firm in London. Over the years, Mr. Mynzhanov consulted for various firms, including those in the metals and mining sector, on raising capital through initial public offerings, as well as restructuring and various business developments. Mr. Mynzhanov holds a Master of Science from University of Westminster. Steven Oyer became a director of ours on February 7, 2024 pursuant to the terms of the Plan of Arrangement. Mr. Oyer is a seasoned finance executive with over 40 years of business and investment experience. Since January 2023, Mr. Oyer served as the Managing Partner of Sustainable Finance Partnerships (SFP) where he advises companies in capital transactions and business development. Prior to that, Mr. Oyer served as Chief Executive Officer of i(x) Net Zero, a publicly traded holding company focused on energy transition and sustainability. From September 2015 to February 2018, Mr. Oyer served as Senior Vice President at Lazard Asset Management where he led their Global Family Office Advisory Group. Mr. Oyer’s experience includes a senior position at the Private Funds Group of Brookfield Asset Management focused on Real Assets and Renewable Investments. Additionally, Mr. Oyer served as interim Chief Executive Officer and led the restructuring of Saflink Corporation, a NASDAQ listed biometric software company. Mr. Oyer served as a board member and audit chair of Salton, Inc., a designer, marketer, manufacturer, and distributor of a broad range of branded small appliances. Mr. Oyer was the founder of Quake Capital, an accelerator that fosters early-stage ventures led by student and faculty entrepreneurs from university ecosystems and still serves in an advisory capacity. Mr. Oyer is currently a board member of The Truth Initiative, a nonprofit public health organization committed to tobacco use prevention and nicotine addiction. He also has served as a member of the investment committee for the Florida Atlantic University’s Foundation. Mr. Oyer attended the University of Massachusetts. 31 Shiv Vikram Khemka became a director of ours on February 7, 2024 pursuant to the terms of the Plan of Arrangement. Mr. Khemka has served as one of Oxus’ independent directors commencing since September 2021. Mr. Khemka is a vice-chairman of SUN Group, a 120-year-old family enterprise comprised of both operating and investment companies. He has served as a vice-chairman of SUN Group since 1990. SUN Group is active in asset management, natural resources, green infrastructure and high technology. SUN has partnered to establish SUN Mobility, an energy tech company focused on becoming a leader in EV energy. SUN is also a significant investor in a leading EV solid state battery manufacturer. The group has been active in various regions around the world, including India, the Middle East, Central and South-East Asia. Mr. Khemka is the chairman of the Entrepreneurship Sports Generation, also executive chairman of the Global Education and Leadership Foundation. He is currently a member of the board of governors at Junior Achievement Worldwide and is a member of the Leadership Council at the Brooking Centre for Universal Education. The World Economic Forum elected Mr. Khemka a “Global Leader for Tomorrow” and he was also a member of the organization’s Global Agenda Council on Education. He has served on both the Brown University and Yale University’s President’s Councils. Mr. Khemka has also served as a board member on the Stanford Philanthropy and Civic Society (PACS) centre. He is currently a founding member of V20, a global community of values experts and practitioners that engage with G20, and is the chairman of Aikido Aikikai Foundation of India. He was awarded the Dr. Jean Mayer Global Citizenship Award from Tufts University, the Outstanding Contribution to Education Prize and the India Alumni Award from the Wharton School of Business. Mr. Khemka studied at Eton College, earned a BA in economics from Brown (1985), an MBA/MA with distinction from the Wharton School of Business and the Lauder Institute at the University of Pennsylvania (1990). Corporate Governance Audit Committee We have a separately designated standing audit committee that consists of Shiv Vikram Khemka, Kanat Mynzhanov, and Steven Oyer, with Mr. Oyer serving as our Chairman. All members of our audit committee meet the requirements for financial literacy under the applicable Nasdaq rules and regulations. Our board has determined that each member of our audit committee qualifies as “independent” under Nasdaq’s additional standards applicable to audit committee members and Rule 10A-3 of the Exchange Act applicable to audit committee members. In addition, our Board has determined that Steven Oyer qualifies as an “audit committee financial expert,” as defined in applicable SEC rules and has accounting or related financial management expertise. Code of Business Conduct and Ethics We have a Code of Business Conduct and Ethics that applies to all of our executive officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Code of Business Conduct and Ethics is available on our website, www.investors.borealisfoods.com/overview/default.aspx, under the “Governance” section. We intend to make any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Business Conduct and Ethics on our website rather than by filing a Current Report on Form 8-K. Compensation Committee Interlocks and Insider Participation During 2023, our compensation committee was comprised of former directors of Oxus. No member of the compensation committee was at any time during fiscal year 2023, or at any other time, one of our officers or employees. None of our executive officers has served as a director or member of a compensation committee (or other committee serving an equivalent function) of any entity, one of whose executive officers served as a director of our Board or member of our compensation committee. Item 11. Executive Compensation. Executive and Director Compensation of Oxus Prior to the Consummation of the Transaction As of December 31, 2023, Oxus had two executive officers, Kanat Mynzhanov (Chief Executive Officer and Director) and Askar Mametov (Chief Financial Officer). Upon the consummation of the Transaction, and in accordance with the terms of the Business Combination Agreement, each of the Oxus executive officers ceased serving in such capacities. 32 Executive and Director Compensation of Borealis Foods This section discusses the material components of the executive compensation program for our executive officers who are named in the “Summary Compensation Table” below. In 2023, our “named executive officers” and their positions were as follows: ● Reza Soltanzadeh, Director and Chief Executive Officer; ● Pouneh Rahimi, Chief Legal Officer; ● Stephen Wegrzyn, Chief Financial Officer; ● Henry Wong, Chief Marketing Officer; and ● Matt Talle, Chief Strategy Officer. This discussion may contain forward-looking statements that are based on our current plans, considerations, expectations, and determinations regarding future compensation programs. Summary Compensation Table The following table sets forth information concerning the compensation of our names executive officers for the years ended December 31, 2023 and December 31, 2022. Name and Principal Position Year Salary ($) Bonus ($) Option Awards ($) All Other Compensation ($) Total ($) Reza Soltanzadeh 2023 — — — — — President and Chief Executive Officer (1) 2022 — — — — — Matt Talle 2023 250,000 — — — 250,000 Chief Strategy Officer 2022 250,000 — — — 250,000 Steve Wegrzyn 2023 165,000 — — — 165,000 Chief Financial Officer (2) 2022 165,000 — 300,00 — 465,000 (1) Mr. Soltanzadeh did not receive any compensation for his service rendered to us in 2022 or 2023. (2) Mr. Wegrzyn was awarded 300,000 shares with an option exercise price of $0.60. Narrative Disclosure to the Summary Compensation Table Certain of the compensation paid to our named executive officers (“ NEOs ”) reflected in the Summary Compensation Table was provided pursuant to plans and programs which are summarized below. Mr. Soltanzadeh, Mr. Talle, and Mr. Wegrzyn were not party to an employment agreement during 2023 or 2022. For a discussion of benefits, please see below. Elements of Compensation In 2023, our compensation program consisted primarily of the following elements: base salary, long-term incentives, and benefit and perquisite programs. 33 2023 Base Salary Historically, we have provided base salary as a fixed source of compensation for our executive officers. Base salaries for NEOs are established based on the scope of their responsibilities, competencies, and their prior relevant experience, taking into account compensation paid in the market for similar positions and the market demand for such NEO’s total compensation package. Base salaries are reviewed annually and increased for merit reasons based on the executive’s success in meeting or exceeding individual objectives. Additionally, base salaries can be adjusted as warranted throughout the year to reflect promotions or other changes in the scope of breadth of an executive’s role or responsibilities, as well as to maintain market competitiveness. Long Term Equity Compensation Plans The Incentive Plan was previously approved by Oxus’ and Borealis’ board of directors and shareholders on February 2, 2024, and subsequently approved and ratified by our Board upon the Closing of the Transaction. The Incentive Plan became effective immediately upon the consummation of the Transaction. The Incentive Plan initially makes available a maximum number of 1,125,869 Common Shares. The aggregate number of Common Shares that is (i) issued to an officer, director, 10% stockholder and anyone who possesses material non-public information because of his or her relationship with the company or with an officer, director or principal stockholder of the company (“ Insiders ”) under the Incentive Plan or any other proposed or established share compensation arrangement within any one-year period will not exceed 10% of the total issued and outstanding Common Shares subject to the Incentive Plan from time to time and (ii) issuable to a non-employee director under the Incentive Plan during any of our fiscal years may not have a “fair value” as of the date of grant, as determined in accordance with ASC Topic 718 (or any other applicable accounting guidance), that exceeds $300,000 in the aggregate. Health and Welfare Plans Our named executive officers are eligible to participate in the employee benefit plans that we offer to our employees generally, including medical, life and accidental death and dismemberment, and short- and long-term disability benefits in Canada and the United States, and basic and extended health care, dental, counseling services, disability, life and accidental death and dismemberment insurance and survivor benefits in Canada. Clawback Policy We have adopted a compensation recovery policy (the Company’s Clawback Policy), which was effective March 27,2024, that is compliant with the Nasdaq Listing Rules, as required by the Dodd-Frank Act. Outstanding Equity Awards at Fiscal Year End The following table summarizes the outstanding equity awards held by each of our named executive officers as of December 31, 2023, which were granted under our Stock Plan. The numbers in the following table have not been adjusted to reflect any adjustment in contemplation of the Transaction. Option Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Matt Talle, Chief Strategy Officer (1)(2) — 1,225,000 (5) $ 0.60 January 10, 2033 Steve Wegrzyn, Chief Financial Officer (3)(4) — 500,000 (5) $ 0.60 January 10, 2032 (1) Mr. Talle’s stock options are subject to a five-year vesting schedule, with 100% of the options vesting on January 10, 2027, subject to Mr. Talle’s continuous service through each vesting date. (2) In the event of a change of control event, the optioned shares will automatically vest in full, immediately prior to the occurrence of the change of control event. 34 (3) Mr. Wegrzyn’s stock options are subject to a five-year vesting schedule, with 100% of the options vesting on January 10, 2027, subject to Mr. Wegrzyn’s continuous service through each vesting date. (4) In the event of a change of control event, the optioned shares will automatically vest in full, immediately prior to the occurrence of the change of control event. (5) The equity award was granted in 2022. Director Compensation No non-employee directors received any cash or equity compensation for services rendered to us during the year ended December 31, 2023. Option Awards ($) Total ($) Barthelemy Helg (1) — — (1) Mr. Helg was not compensated for his services rendered to us in 2023. We determine the annual compensation to be paid to the members of our Board. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters. The following table sets forth beneficial ownership of our common stock as of March 22, 2024 by: ● each person who is the beneficial owner of more than 5% of the issued and outstanding Common Shares; and ● each of our named executive officers and directors. Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she, or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days of March 22, 2024. Our beneficial ownership is based on 21,378,890 Common Shares issued and outstanding as of March 22, 2024. Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to all Common Shares beneficially owned by them. To our knowledge, no Common Shares beneficially owned by any executive officer or director have been pledged as security. 35 The following table illustrates varying beneficial ownership levels in Borealis Foods with the percentage of outstanding shares based on Common Shares as of March 22, 2024: Name and Address of Beneficial Owner Number of shares % of Total Voting Power Directors and Named Executive Officers of New Borealis (1) Reza Soltanzadeh (2) 3,660,452 17.121 % Barthelemy Helg (3) 3,205,556 14.994 % Stephen Wegrzyn (4) 33,046 * Pouneh Rahimi (5) 192,368 * Matt Talle (6) 214,665 * Henry Wong (7) 14,334 * Kanat Mynzhanov (8) 200,000 * Shiv Vikram Khemka (9) 50,000 * Shukhrat Ibragimov (10) 3,224,880 15.084 % Steven Oyer (11) 2,000 * Ertharin Cousin — — All directors and executive officers as a group (11 individuals) 10,797,301 49.87 % Five or more Percent Holders Reza Soltanzadeh (2) 3,660,452 17.121 % Oxus Capital Pte. (12) 5,352,477 25.036 % Belphar Ltd. (13) 2,848,955 13.326 % Barthelemy Helg (3) 3,205,556 14.994 % * Less than 1%. (1) Unless otherwise noted, the business address of each of the following entities or individuals is c/o Borealis Foods Inc. 1540 Cornwall Road, Suite 104, Oakville, Ontario L6J 7W5. (2) Consists of (i) 3,532,505 Common Shares held by Zagros Alpine Capital ULC and (ii) 127,947 Common Shares held by Z Ventures Inc. Reza Soltanzadeh is the President of Zagros Alpine Capital ULC and Z Ventures Inc. and has sole voting and dispositive control over the shares held by Zagros Alpine Capital ULC and Z Ventures Inc. (3) Consists of 3,205,556 Common Shares. (4) Consists of 33,046 Common Shares. (5) Consists of 192,368 Common Shares held by Zagros Alpine Capital ULC. Ms. Rahimi does not have voting or dispositive control over the shares held by Zagros Alpine Capital ULC. (6) Consists of (i) 80,962 Common Shares and (ii) 133,703 Common Shares held by Zagros Alpine Capital ULC. Mr. Talle does not have voting or dispositive control over the shares held by Zagros Alpine Capital ULC. (7) Consists of 14,334 Common Shares. (8) Consists of 200,000 Common Shares. (9) Consists of 50,000 Common Shares. (10) Consists of (i) 2,848,955 Common Shares held by Belphar Ltd. and (ii) 375,925 Common Shares held by GSS Overseas LTD. Mr. Ibragimov is the sole shareholder of Belphar Ltd. and GSS Overseas LTD. and has sole voting and dispositive control over the shares of Belphar Ltd. and GSS Overseas LTD. (11) Consists of 2,000 Common Shares. (12) Consists of 5,352,477 Common Shares. Kenges Rakishev is the controlling shareholder. (13) Consists of 2,848,955 Common Shares. Mr. Ibragimov is the controlling shareholder. 36 Item 13. Certain Relationships and Related Transactions, and Director Independence. Legacy Borealis Pre-Business Combination Arrangements Our Relationship with Zagros On November 29, 2022, Reza Soltanzadeh, on behalf of Zagros Ventures, Inc. (“ Zagros ”) entered into a Postponement of Shareholder Loans Agreement, by and between Borealis and Zagros Ventures Inc., pursuant to which in consideration of Oxus making the Oxus Loan or any part thereof to Borealis and in consideration of the premises, Zagros agreed that any claim of Oxus in respect of the Oxus Loans will take precedence over and be fully paid in priority to the loan made by Zagros and repayment be postponed in favor of Oxus, including any right, title and interest in any security in respect of such loans made by Zagros to Borealis. Our Relationship with Barthelemy Helg On November 29, 2022, Barthelemy Helg entered into a Postponement of Shareholder Loans Agreement, by and between Borealis and Mr. Helg, pursuant to which in consideration of Oxus making the Oxus Loan or any part thereof to Borealis and in consideration of the premises, Mr. Helg agreed that any claim of Oxus in respect of the Oxus Loans will take precedence over and be fully paid in priority to the loan made by Mr. Helg and repayment be postponed in favor of Oxus, including any right, title and interest in any security in respect of such loans made by Mr. Helg to Borealis. On December 31, 2019, Borealis issued two demand promissory notes to Barthelemy Helg, pursuant to which Borealis borrowed an aggregate principal amount of $1.2 million. On December 31, 2020, Borealis issued two demand promissory notes to Barthelemy Helg, pursuant to which Borealis borrowed an aggregate principal amount of $3.0 million. On February 2, March 18, March 31, June 8, June 23, and December 1, 2022, Borealis issued demand promissory notes to Barthelemy Helg, pursuant to which Borealis borrowed a principal amount of $1.5 million, $1.0 million, $937,167, $500,000, $350,000, and $36,625, respectively. The principal amount of each such loan bears interest at the annual rate of 10%. Our Relationship with the Sponsor On October 21, 2022, Borealis and the Sponsor executed a note purchase agreement in the amount of $2,500,000 at 10% per annum interest (“ Initial Sponsor Note ”). On November 14, 2022, Borealis and the Sponsor executed a second note purchase agreement in the amount of $17,500,000 at 10% per annum interest (“ Second Sponsor Note , and collectively with the Initial Sponsor Note, “ Sponsor Convertible Notes ”). The conversion of both notes into Borealis Shares was to be at a $120,000,000 valuation divided by the fully diluted number of outstanding shares and discounted by five percent (5%). Our Relationship with Belphar Ltd. and Frontwell Capital Partners Inc. On August 10, 2023, Borealis, Belphar Ltd. and Frontwell Capital Partners Inc. entered into a Subordination and Intercreditor Agreement granting Belphar Ltd. a security interest and lien upon all or substantially all of Borealis’ assets as security for the repayment of the Note Purchase Agreement, dated February 8, 2023. The Note Purchase Agreement granted that convertible notes with an aggregate principal amount of up to $20,000,000.00 may be issued to Borealis executed by PGF in favor of Belphar Ltd. 37 Shareholder Support Agreements Concurrently with the execution of the Business Combination Agreement, Legacy Borealis entered into Shareholder Support Agreements with Oxus and certain Legacy Borealis shareholders. Pursuant to the Shareholder Support Agreements, among other things, such Legacy Borealis shareholders agreed to vote their Legacy Borealis Common Shares in favor of the Transaction and not to sell or transfer their Legacy Borealis Common Shares. The Shareholder Support Agreements are described in the Proxy Statement/Prospectus in the sections entitled “ Certain Agreements Related to the Business Combination – Shareholder Support Agreements ” beginning on pages 5 and 121, respectively, of the Proxy Statement/Prospectus. The foregoing description of the Shareholder Support Agreements does not purport to be complete and is qualified in its entirety by the full text of the form of the Shareholder Support Agreements, which is incorporated herein by reference. Sponsor Support Agreement Concurrently with the execution of the Business Combination Agreement, Legacy Borealis entered into a Sponsor Support Agreement with Oxus and the Sponsor, pursuant to which, among other things, the Sponsor agreed to (A) vote its Founder Shares in favor of the 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 Legacy Borealis. The Sponsor Support Agreement is described in the Proxy Statement/Prospectus in the section titled “ Certain Agreements Related to the Business Combination Agreement – Sponsor Support Agreement ” beginning on pages 5 and 121, respectively, of the Proxy Statement/Prospectus. The foregoing description of the Sponsor Support Agreement does not purport to be complete and is qualified in its entirety by the full text of the Sponsor Support Agreement, which is incorporated herein by reference. Policies and Procedures for Related Person Transactions Our Board has adopted a written Related Person Transaction Policy, setting forth the policies and procedures for the review and approval or ratification of related person transactions. Under the policy, our Audit Committee shall review the material facts of all related party transactions and shall approve or disapprove of the entry into the related party transaction. In the event that advance Audit Committee review of a related party transaction is not feasible or has otherwise not been obtained, then the related party transaction shall be reviewed subsequently by the Audit Committee (and such transaction may be ratified subsequently by the Audit Committee). The Audit Committee may also disapprove of a previously entered into related party transaction and may require that our management team take all reasonable efforts to terminate, unwind, cancel or annul the related party transaction. In connection with its review of a related party transaction, the Audit Committee will take into account, among other factors it deems appropriate, whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the Related Party’s interest in the related party transaction. Director Independence The information contained under the heading “Director Independence” in Part III, Item 10. “Directors, Executive Officers and Corporate Governance” is incorporated by reference herein. 38 Item 14. Principal Accountant Fees and Services. The following table summarizes the fees of Marcum LLP, Oxus’ independent registered public accounting firm prior to the consummation of the Transaction, billed to us in each of the last two fiscal years for audit services and billed to us in each of the last two fiscal years for other services: For the year ended December 31, 2023 For the year ended December 31, 2022 (in thousands) Fee Category Audit Fees (1) $ 306,425 $ 82,400 Audit-Related Fees (2) — — Tax Fees(3) — — All Other Fees(4) — — Total $ 306,425 $ 82,400 (1) Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by Marcum in connection with regulatory filings. (2) Audit-Related Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. (3) Tax Fees. Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice. (4) All Other Fees. All other fees consist of fees billed for all other services. Audit Committee Pre-Approval Policy and Procedures Oxus’ audit committee was formed in connection with the effectiveness of our registration statement for its initial public offering. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by the Oxus Board. Since the formation of its audit committee, and on a going-forward basis, the audit committee has and will pre-approve all audit services and permitted non-audit services to be performed for it by its auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit). 39 Part IV Item 15. Exhibits and Financial Statement Schedules. (a)(1) Financial Statements. The following documents are included on pages F-1 through F-27 attached hereto and are filed as part of this Annual Report on Form 10-K. Index to Financial Statement Report of Independent Registered Public Accounting Firm F-2 Financial Statements Balance Sheet F-3 Statements of Operations F-4 Statements of Changes in Shareholders’ Deficit F-5 Statements of Cash Flows F-6 Notes to Financial Statements F-7 (a)(2) Financial Statement Schedules. All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto. (a)(3) Exhibits. The following is a list of exhibits filed, furnished, or incorporated by reference as part of this Annual Report on Form 10-K. Exhibit Number Description 2.1* + Business Combination Agreement, dated as of February 23, 2023, by and among Oxus Acquisition Corp., 1000397116 Ontario Inc., and Borealis Foods Inc. (incorporated by reference to Exhibit 2.1 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023). 2.2* + Amendment No. 1 to the Business Combination Agreement, dated as of August 11, 2023, by and among Oxus Acquisition Corp., 1000397116 Ontario Inc., and Borealis Foods Inc. (incorporated by reference to Exhibit 2.2 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023). 2.3* + Amendment No. 2 to the Business Combination Agreement, dated as of January 11, 2024, by and among Oxus Acquisition Corp., 1000397116 Ontario Inc., and Borealis Foods Inc. (included as Annex A to this proxy statement/prospectus) (incorporated by reference to Exhibit 2.3 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on January 12, 2024). 2 . 4* + Plan of Arrangement (Amended) (incorporated by reference on Exhibit 10.4 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023). 3.1* Form of New Borealis By-Laws (incorporated by reference to Exhibit 10.9 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023). 3.2* Form of Borealis Articles of Continuance (incorporated by reference to Exhibit 10.8 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023). 10.1* + Form of Shareholder Support Agreement, dated as of February 23, 2023, by and among Oxus Acquisition Corp. and certain shareholders of Borealis Foods Inc. (incorporated by reference to Exhibit 10.4 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023). 10.2* + Sponsor Support Agreement, dated as of February 23, 2023, by and among Oxus Acquisition Corp., Oxus Capital Pte. Ltd and Borealis Foods Inc. (incorporated by reference to Exhibit 10.11 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023). 40 10.3* Note Purchase Agreement, dated February 28, 2023, by and between Borealis Foods Inc. and Saule Algaziyeva (incorporated by reference to Exhibit 10.37 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023). 10.4* Note Purchase Agreement, dated February 8, 2023, by and between Borealis Foods Inc. and Belphar Ltd. (incorporated by reference to Exhibit 10.38 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023). 10.5* First Amendment to the Note Purchase Agreement, dated July 23, 2023 (incorporated by reference to Exhibit 10.41 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on November 13, 2023). 10.6* Note Purchase Agreement, dated November 15, 2023, by and between Borealis Foods Inc. and Aman Murat Baikdamuly (incorporated herein by reference to Exhibit 10.8 to Borealis Foods Inc.’s Form 8-K, filed with the SEC on February 13, 2024). 10.7* Note Purchase Agreement, dated January 30, 2024, by and between Borealis Foods Inc. and GSS Overseas LTD. (incorporated herein by reference to Exhibit 10.9 to Borealis Foods Inc.’s Form 8-K, filed with the SEC on February 13, 2024). 10.8* Second Amended and Restated Promissory Note, dated October 2, 2023 (incorporated by reference to Exhibit 10.40 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023). 10.9* Third Amended and Restated Promissory Note, dated February 7, 2024 (incorporated herein by reference to Exhibit 10.11 to Borealis Foods Inc.’s Form 8-K, filed with the SEC on February 13, 2024). 10.12* Form of Board Nomination Agreement, by and between Borealis Foods, Inc. and Belphar Ltd. (incorporated by reference to Exhibit 10.42 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on January 5, 2024). 10.14* Form of Equity Incentive Plan (incorporated by reference on Exhibit 10.4 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023). 14.1* Borealis Foods Inc. Code of Business Conduct and Ethics (incorporated herein by reference to Exhibit 14.1 to Borealis Foods Inc.’s Form 8-K, filed with the SEC on February 13, 2024). 16.1* Letter from Marcum LLP to the SEC, dated February 13, 2024 (incorporated herein by reference to Exhibit 16.1 to Borealis Foods Inc.’s Form 8-K, filed with the SEC on February 13, 2024). 31.1 Certification of Principal Executive Officer Pursuant to Rules 13A-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Financial Officer Pursuant to Rules 13A-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.0 Oxus Acquisition Corp. Clawback Policy 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Previously filed. + Annexes, schedules, and exhibits to this Exhibit omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. Item 16. Form 10-K Summary. None. 41 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Borealis Foods Inc. By: /s/ Reza Soltanzadeh Reza Soltanzadeh Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Name Title Date /s/ Reza Soltanzadeh Chief Executive Officer and Director April 15, 2024 Reza Soltanzadeh (principal executive officer) /s/ Stephen Wegrzyn Chief Financial Officer April 15, 2024 Stephen Wegrzyn (principal financial officer) /s/ Barthelemy Helg Director April 15, 2024 Barthelemy Helg /s/ Ertharin Cousin Director April 15, 2024 Ertharin Cousin /s/ Shukhrat Ibragimov Director April 15, 2024 Shukhrat Ibragimov /s/ Kanat Mynzhanov Director April 15, 2024 Kanat Mynzhanov /s/ Steven Oyer Director April 15, 2024 Steven Oyer /s/ Shiv Vikram Khemka Director April 15, 2024 Shiv Vikram Khemka 42 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2023 TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Report of Independent Registered Public Accounting Firm (PCAOB ID: 688 ) F-2 Financial Statements Balance Sheets as of December 31, 2023 and 2022 F-3 Statements of Operations for the Year Ended December 31, 2023 and 2022 F-4 Statements of Changes in Shareholders’ Deficit for the Year Ended December 31, 2023 and 2022 F-5 Statements of Cash Flows for the Year Ended December 31, 2023 and 2022 F-6 Notes to Financial Statements F-7 F- 1 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Borealis Foods Inc. (formerly known as Oxus Acquisition Corp.) Opinion on the Financial Statements We have audited the accompanying balance sheets of Borealis Foods Inc. (formerly known as Oxus Acquisition Corp.) (the “ Company ”) as of December 31, 2023 and 2022, the related statements of operations, changes in shareholders’ deficit and cash flows for the years ended December 31, 2023 and 2022, and the related notes (collectively referred to as the “ financial statements ”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1 to the financial statements, the Company was a Special Purpose Acquisition Corporation that was formed for the purpose of completing a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities. The Company entered into a definitive merger agreement with a business combination target on February 23, 2023; which was completed on February 7, 2024. As also described in Note 1, uncertainties related to the combined company such as historical performance and its estimated liquidity needs raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“ PCAOB ”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor since 2021. New York, NY April 15, 2024 F- 2 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) BALANCE SHEETS December 31, 2023 December 31, 2022 ASSETS Current Assets Cash $ 93,115 $ 680,792 Prepaid expenses, current 29,600 236,002 Total Current Assets 122,715 916,794 Marketable securities held in Trust Account 21,921,321 178,532,948 TOTAL ASSETS $ 22,044,036 $ 179,449,742 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current Liabilities Accrued expenses $ 3,432,370 $ 842,513 Promissory note - related party 3,988,000 1,500,000 Related party payable 66,854 158,640 Total Current Liabilities 7,487,224 2,501,153 Commitments and Contingencies Class A ordinary shares, par value $ 0.0001 ; subject to possible redemption, 1,939,631 shares as of December 31, 2023 and 17,250,000 shares as of December 31, 2022, respectively, at redemption value 21,921,321 178,532,948 Shareholders’ Deficit Preferred shares, $ 0.0001 par value; 5,000,000 shares authorized; none issued or outstanding — — Class A ordinary shares, $ 0.0001 par value; 500,000,000 shares authorized; 1,800,000 issued and outstanding as of December 31, 2023 and 300,000 issued and outstanding as of December 31, 2022 (excluding 1,939,631 shares subject to possible redemption as of December 31, 2023 and 17,250,000 shares subject to possible redemption as of December 31, 2022, respectively) 180 30 Class B ordinary shares, $ 0.0001 par value; 50,000,000 shares authorized; 2,812,500 shares issued and outstanding as of December 31, 2023 and 4,312,500 shares issued and outstanding as of December 31, 2022 281 431 Additional paid-in capital — — Accumulated deficit ( 7,364,970 ) ( 1,584,820 ) Total Shareholders’ Deficit ( 7,364,509 ) ( 1,584,359 ) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT $ 22,044,036 $ 179,449,742 The accompanying notes are an integral part of the financial statements. F- 3 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) STATEMENTS OF OPERATIONS For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 Operating expenses $ 5,130,993 $ 2,886,611 Loss from operations ( 5,130,993 ) ( 2,886,611 ) Other income (expense): Dividend income 2,201,765 2,578,984 Interest income 5,159 4,010 Foreign exchange (loss) / gain ( 17,334 ) 1,073 Net loss $ ( 2,941,403 ) $ ( 302,544 ) Basic and diluted weighted average redeemable Class A ordinary shares outstanding 4,463,896 17,250,000 Basic and diluted net loss per redeemable Class A ordinary share $ ( 0.32 ) $ ( 0.01 ) Basic and diluted weighted average non-redeemable ordinary shares outstanding 4,612,500 4,612,500 Basic and diluted net loss per non-redeemable ordinary share $ ( 0.32 ) $ ( 0.01 ) The accompanying notes are an integral part of the financial statements. F- 4 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT For the Year Ended December 31, 2023 Class A Ordinary Shares Class B Ordinary Shares Additional Paid-in Accumulated Total Shareholders’ Shares Amount Shares Amount Capital Deficit Deficit Balance – January 1, 2023 300,000 $ 30 4,312,500 $ 431 $ — $ ( 1,584,820 ) $ ( 1,584,359 ) Remeasurement of Class A ordinary shares to redemption amount — — — — — ( 2,838,747 ) ( 2,838,747 ) Conversion of Class B ordinary shares to Class A ordinary shares 1,500,000 150 ( 1,500,000 ) ( 150 ) — — — Net loss — — — — — ( 2,941,403 ) ( 2,941,403 ) Balance – December 31, 2023 1,800,000 $ 180 2,812,500 $ 281 $ — $ ( 7,364,970 ) $ ( 7,364,509 ) For the Year Ended December 31, 2022 Class A Ordinary Shares Class B Ordinary Shares Additional Paid-in Accumulated Total Shareholders’ Shares Amount Shares Amount Capital Deficit Deficit Balance – January 1, 2022 300,000 $ 30 4,312,500 $ 431 $ 1,708,296 $ ( 407,624 ) $ 1,301,133 Remeasurement of Class A ordinary shares to redemption amount — — — — ( 1,708,296 ) ( 874,652 ) ( 2,582,948 ) Net loss — — — — — ( 302,544 ) ( 302,544 ) Balance – December 31, 2022 300,000 $ 30 4,312,500 $ 431 $ — $ ( 1,584,820 ) $ ( 1,584,359 ) The accompanying notes are an integral part of the financial statements. F- 5 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) STATEMENTS OF CASH FLOWS For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 Cash Flows from Operating Activities: Net loss $ ( 2,941,403 ) $ ( 302,544 ) Dividend income ( 2,201,765 ) ( 2,578,984 ) Foreign exchange loss/(gain) 17,334 ( 1,073 ) Adjustments to reconcile net loss to net cash used in operating activities: Changes in operating assets and liabilities: Accrued expenses 2,580,737 604,049 Prepaid expenses 206,402 172,834 Net cash used in operating activities ( 2,338,695 ) ( 2,105,718 ) Cash flows from Investing Activities: Deposit into the Trust Account ( 636,982 ) — Cash withdrawn from trust account in connection with redemptions of Class A ordinary shareholders 159,450,374 — Net cash provided by investing activities 158,813,392 — Cash flows from Financing Activities: Proceeds from promissory note - related party 2,488,000 1,500,000 Repayment of related party payable ( 100,000 ) — Proceeds from related party — 163,126 Payment for redemptions of Class A ordinary shares ( 159,450,374 ) — Net cash (used in) provided by financing activities ( 157,062,374 ) 1,663,126 Net Change in Cash: ( 587,677 ) ( 442,592 ) Cash - Beginning 680,792 1,123,384 Cash - Ending $ 93,115 $ 680,792 Supplemental disclosure of non-cash investing and financing activities: Remeasurement for Class A ordinary shares subject to redemption $ 2,838,747 $ 2,582,948 The accompanying notes are an integral part of the financial statements. F- 6 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS 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. As of the balance sheet date, 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 December 31, 2023 the Company had not commenced any operations. All activity for the period from February 3, 2021 (inception) through December 31, 2023, relates to the Company’s formation and the initial public offering (“ Initial Public Offering ”), which is described below, and since the offering identifying and evaluating prospective acquisition targets for a Business Combination. 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 or dividend income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end. On February 7, 2024, the Company completed its Business Combination and has since been an operating entity (refer to Note 9). 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. 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”). 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 trust account (the “ 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. F- 7 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS (Continued) 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 income 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, as amended (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. 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 15 % or more of the Public Shares, without the prior consent of the Company. F- 8 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS (Continued) 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 initially had until March 8, 2023 to complete a Business Combination, which was extended until December 8, 2023 (the “ Combination Period ”) after the approval obtained at an extraordinary meeting of shareholder held on March 2, 2023 (the “ Extension ”). On December 5, 2023, the Company filed an amendment (the “ Charter Amendment ”) to the Company’s Charter with the Registrar of Companies in the Cayman Islands to extend the date by which the Company must consummate its initial Business Combination from December 8, 2023 to June 8, 2024. 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 income 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 5) 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. 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. F- 9 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS (Continued) On February 23, 2023, the Company entered into a Business Combination agreement by and among the Company, 1000397116 Ontario Inc., a corporation incorporated under the laws of the province of Ontario, Canada (“ Newco ”) and a wholly-owned subsidiary of the Company, and Borealis Foods Inc (“ Borealis ”) (as may be amended and/or restated from time to time, the “ Business Combination Agreement ”). Pursuant to the Business Combination Agreement, among other things: (a) the Company will domesticate and continue as a corporation existing under the laws of the province of Ontario, Canada (the “ Continuance ” and, the Company 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 “ Transaction ”), with New Oxus surviving the New Oxus Amalgamation. The Business Combination Agreement was unanimously approved by Oxus’ and Borealis’ respective board of directors. 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 ”). On March 2, 2023, at the extraordinary general meeting of shareholders in connection with the Extension, the holders of 15,300,532 Class A ordinary shares of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 10.41 per share, for an aggregate redemption amount of approximately $ 159.34 million, leaving approximately $ 20.3 million in the Trust Account. On August 11, 2023, the Company, and Borealis, entered into an amendment (the “ Amendment ” ) to the Business Combination Agreement, to amend and restate certain terms of the Business Combination Agreement, including (i) Section 7.18(a), to change the number of awards of shares of New SPAC Shares to be granted under the New SPAC Equity Plan from 15 % to 5 %; (ii) to delete the form of the Plan of Arrangement attached as Exhibit B to the original Business Combination Agreement and replace it with the form attached as Exhibit A to the Amendment (the “Plan of Arrangement (Amended)”); and (iii) to delete the form of the New SPAC Bylaws attached as Exhibit G to the Business Combination Agreement and replace it with the form attached as Exhibit B to the Amendment (the “ New SPAC Bylaws (Amended) ”). The Plan of Arrangement (Amended) includes, among other things, certain changes to reflect a plan of arrangement under section 192 of the CBCA and section 182 of the OBCA and certain changes to provisions relating to the New Oxus Amalgamation, and the effects of such amalgamation. The New SPAC Bylaws (Amended) includes additional provisions relating to the appointment of an audit committee, and clarification on the quorum requirements for a meeting of shareholders. On August 14, 2023, the Company filed a registration statement on (“ Form S-4 ”) with the SEC relating to the proposed Business Combination with Borealis. On October 24, 2023, the Company filed an amendment to Form S-4 (“ Amendment 1 ”) with the SEC relating to the proposed business combination with Borealis. On November 13, 2023, the Company filed another amendment to Form S-4 (“ Amendment 2 ”) with the SEC relating to the proposed business combination with Borealis. F- 10 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS (Continued) On November 8, 2023, the Company’s shareholders filed a preliminary proxy statement announcing an extraordinary general meeting (the “Extraordinary General Meeting”) to consider and vote upon the following proposals: (a) as a special resolution, to amend the Company’s Second Amended and Restated Memorandum and the Charter pursuant to an amendment to the Charter in the form set forth in Annex A of the filed proxy statement to extend the date by which the Company must (1) consummate a Business Combination, (2) cease its operations except for the purpose of winding up if it fails to complete such Business Combination, and (3) redeem all of the Class A ordinary shares, included as part of the units sold in the Company’s Initial Public Offering if it fails to complete such Business Combination, for up to an additional six months, from the December 8, 2023 to up to June 8, 2024, or such earlier date as determined by the Company’s board of directors; and (b) as an ordinary resolution, to approve the adjournment of the Extraordinary General Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of the Extension Proposal (the “Adjournment Proposal”), which will only be presented at the Extraordinary General Meeting if, based on the tabulated votes, there are not sufficient votes at the time of the Extraordinary General Meeting to approve the Extension Proposal, in which case the Adjournment Proposal will be the only proposal presented at the Extraordinary General Meeting. On December 5, 2023, in connection with the Second Extraordinary General Meeting, the Company filed the Charter Amendment to extend the date by which the Company must consummate its initial Business Combination from December 8, 2023 to June 8, 2024, or such earlier date as determined by the Company’s board of directors (the “Extended Date”). The Company’s shareholders approved the Charter Amendment at the Extraordinary General Meeting on December 5, 2023. On December 5, 2023, at the Second Extraordinary General Meeting, the holders of 9,837 Class A ordinary shares of the Company properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 11.20 per share, for an aggregate redemption amount of approximately $ 0.11 million, leaving approximately $ 21.73 million in the Trust Account. On January 16, 2024, the Company’s S-4 registration statement was declared effective. On February 2, 2024, the Company held an extraordinary general meeting (the “ Third Extraordinary General Meeting ”) whereby shareholders holding 1,886,751 Class A ordinary shares of the Company exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s trust account. As a result, approximately $ 21.42 million (approximately $ 11.35 per share) was removed from the Company’s trust account to pay such shareholders. On February 7, 2024 (the “ Closing Date ”), Borealis, the Company, and Newco, consummated the Transaction, following the approval at the Third Extraordinary General Meeting. Shareholder Support Agreements Concurrently with the execution and delivery of the Business Combination Agreement, Oxus, Borealis and certain Borealis Shareholders entered into an agreement, pursuant to which, among other things, such Borealis Shareholders have agreed to vote their Borealis shares in favor of the Transaction and not sell or transfer their Borealis shares (the “ Shareholder Support Agreements ”). Sponsor Support Agreement Concurrently with the execution and delivery of the Business Combination Agreement, Oxus, Borealis and the Sponsor entered into an agreement, pursuant to which, among other things, Sponsor agreed to (A) vote its founder shares in favor of the 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 such agreement) (the “ Sponsor Support Agreement ”). Registration Rights Agreement In connection with the closing date (the “Closing”), Oxus and certain Borealis Shareholders and certain shareholders of Oxus (the “ Holders ”) will enter into an 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 “ Registration Rights Agreement ”). F- 11 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS (Continued) 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 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 “ Lock-Up Agreements ”). Liquidity and Going Concern As of December 31, 2023, the Company had $ 0.09 million in its operating bank account, $ 21.92 million of marketable securities 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 deficienc y of $ 7.36 million. In February 2024, the Company completed its Business Combination, resulting in approximately $ 50.3 million of convertible debt converting to equity. Also, the Company expects lower operating expenses in 2024 with the completion of the merger. In connection with the Company's assessment of going concern considerations in accordance with ASC Subtopic 205-40, Presentation of Financial Statements - Going Concern, the historical operating results raise substantial doubt about the Company's ability to continue as a going concern. The Company is taking proactive measures to address this concern and believes that the actions discussed below are likely to mitigate the doubt raised by its historical performance and meet its estimated liquidity needs for at least one year from the issuance date of these financial statements. Nevertheless, the Company cannot guarantee the success of these actions or their ability to generate the expected liquidity as currently planned. The Company's ability to continue as a going concern is contingent upon various factors, including its ability to meet financial requirements, secure additional capital, and execute successful future operations. The financial statements have not been adjusted to reflect the possible effects of the Company not continuing as a going concern. Management intends to finance the Company's operations through advances from existing lines of credit until such time as a merger or other investment can be secured. However, there are currently no formal agreements in place for such funding or issuance of securities, and there can be no assurance of their availability in the future. Nonetheless, management believes that this strategy provides a viable opportunity for the Company to continue as a going concern. Substantial doubt continues to exist about the ability of the Company to continue as a going concern within one year from the filing date. 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. F- 12 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS (Continued) Risks and Uncertainties (Continued) 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. The recent military conflict between Israel and militant groups led by Hamas has also caused uncertainty in the global markets. 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. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “ IR Act ”) was signed into federal law. The IR Act provides for, among other things, a U.S. federal 1 % excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. Because the Company may acquire a domestic corporation or engage in a transaction in which a domestic corporation becomes our parent to our affiliate and our securities trade on a U.S. stock exchange, the Company may become a “covered corporation” within the meaning of the IR Act. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchase. The amount of the excise tax is generally 1 % of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. The U.S. Department of the Treasury (the “ Treasury ”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“ GAAP ”) and pursuant to the rules and regulations of the SEC. 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. F- 13 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 2 – 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. Estimates made in preparing these financial statements include, among other things, the fair value measurement of shares transferred by the Sponsor to independent director nominees and fair value of shares to be transferred on completion of the Business Combination as per the Incentive agreements entered by the Sponsor and officers of the Company. Actual results could differ from those estimates. Cash and Cash Equivalents The Company had $0.9 million and $ 0.68 million in cash as of December 31, 2023, and December 31, 2022, 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 December 31, 2023, and December 31, 2022, respectively. Marketable Securities Held in Trust Account The Company’s marketable securities held in the Trust Account are classified as trading securities. Trading securities are presented on the balance sheets at fair value at the end of each reporting period. Gains and losses resulting from the change in fair value of marketable securities held in Trust Account are included in dividend income in the accompanying statements of operations. The estimated fair values of marketable securities held in Trust Account are determined using available market information. On December 31, 2023, and December 31, 2022, the Company had $21.87 million and $ 178.53 million, respectively, of marketable securities held in the Trust Account that were held in a money market fund for which the underlying assets are U.S. Treasury Securities. As of December 31, 2023 the amount $ 21.92 million includes deposit in transit of $ 0.05 million. 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 ASC 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. 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. F- 14 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Ordinary Shares Subject to Possible Redemption (Continued) As of December 31, 2023 and December 31, 2022, the Class A ordinary shares subject to possible redemption reflected on the balance sheets are reconciled in the following table: December 31, 2023 December 31, 2022 Balance brought forward $ 178,532,948 $ 175,950,000 Plus: Remeasurement of carrying value to redemption value 2,838,747 2,582,948 Redemption of Class A ordinary shares ( 159,450,374 ) - Class A ordinary shares subject to possible redemption $ 21,921,321 $ 178,532,948 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 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). F- 15 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS 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 redeemable ordinary share and the non-redeemable ordinary share by the weighted average number of ordinary share outstanding for each of the periods. 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 Year Ended December 31, 2023 For the Year Ended December 31, 2022 Ordinary shares subject to possible redemption Numerator: Net loss allocable to Class A ordinary shares subject to possible redemption $ ( 1,446,622 ) $ ( 238,714 ) Denominator: Weighted average redeemable Class A ordinary shares, basic and diluted 4,463,896 17,250,000 Basic and diluted net loss per share, redeemable Class A ordinary shares $ ( 0.32 ) $ ( 0.01 ) Non-redeemable ordinary shares Numerator: Net loss allocable to non-redeemable ordinary shares $ ( 1,494,781 ) $ ( 63,830 ) Denominator: Weighted average non-redeemable ordinary shares, basic and diluted 4,612,500 4,612,500 Basic and diluted net loss per share, non-redeemable ordinary shares $ ( 0.32 ) $ ( 0.01 ) 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. F- 16 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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 sheets. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions In accordance with ASC 740 on the basis of a two-step process whereby (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 % likely to be realized upon ultimate settlement with the related tax authority. The Company is considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction. The company is not presently subject to income taxes or income tax filing requirements in the Cayman Islands. As such, the company’s income tax provision was zero for the year ended December 31, 2023. 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 and they met the criteria for equity classification and are required to be recorded as part a component of additional paid-in capital at the time of issuance. F- 17 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Foreign Currency Transactions Certain transactions are denominated in a currency other than the Company’s functional currency of the U.S. dollar, and the Company generates assets and liabilities that are fixed in terms of the amount of foreign currency that will be received or paid. At each balance sheet date, the Company adjusts the assets and liabilities to reflect the current exchange rate, resulting in a translation gain or loss. Transaction gains and losses are also realized upon a settlement of a foreign currency transaction in determining net loss for the period in which the transaction is settled. Recently Adopted Accounting Pronouncements In June 2022, the FASB issued ASU 2022-03, which amends Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ ASU 2022-03 ”). ASU 2022-03 clarifies guidance for fair value measurement of an equity security subject to a contractual sale restriction and establishes new disclosure requirements for such equity securities. The Company elected to early adopt ASU 2022-03 on July 1, 2023, and applied the amendment in measuring fair value of shares to be transferred on closing of a Business Combination. 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 financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. This ASU will be effective for the annual period ending December 31, 2025. The Company is currently evaluating the timing and impacts of adoption of this ASU. In June 2016, the FASB issued ASU 2016-12, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 also requires additional disclosures regarding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. The Company adopted the provisions of this guidance with effect from January 1, 2023. The adoption did not have a material impact on the Company’s consolidated 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 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. F- 18 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 3 – INITIAL PUBLIC OFFERING (Continued) 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). 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 on September 13, 2021, 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. 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. The fair value of the allocated Founder Shares was measured at fair value using a Black Scholes simulation model. On May 31, 2022, Mr. Sergei Ivashkovsky resigned from his position as independent director within the Company and returned 50,000 Founder Shares to the Sponsor. On June 1, 2022, Mr. Karim Zahmoul was appointed as independent director. On June 7, 2022, 50,000 Founder Shares were transferred to Mr. Karim Zahmoul by the Sponsor. The fair value of the 50,000 Founder Shares granted to the Mr. Karim Zahmoul on June 7, 2022 was $ 0.02 million or $ 0.33 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. The fair value of the allocated Founder Shares was measured at fair value using a Monte Carlo simulation model. F- 19 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 5 – RELATED PARTY TRANSACTIONS (Continued) Founder Shares (Continued) As of December 31, 2023, 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. On September 13, 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 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. On April 5, 2023, in accordance with the provisions of the Memorandum and Articles of Association, the Sponsor exercised its right to convert 1,500,000 shares of Class B ordinary shares, par value $ 0.0001 per share, of the Company into 1,500,000 shares of Class A ordinary shares, par value $ 0.0001 per share, of the Company on a one-for-one basis. As of balance sheet date, following conversion, there were 2,812,500 Founder Shares issued and outstanding. 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 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. F- 20 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 5 – RELATED PARTY TRANSACTIONS (Continued) 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 or 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 and is no longer available. 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. Amended Note On September 8, 2022, the Company issued a promissory note for up to approximately $ 1.5 million (the “ Note ”) to the Sponsor. The Note is non-interest bearing. The principal balance of Note shall be payable on the date of a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination involving the Maker (as defined therein) and one or more businesses (such date the “ Maturity Date ”). The arrangement did not include any conversion feature. As of December 31, 2022, $ 1.5 million was drawn under the Note. On February 28, 2023, the Note was amended to increase its principal amount to $ 3.5 million (the “ Amended Note ”). The Amended Note remains payable at Maturity Date and is non-interest bearing. The principal balance of Note shall be payable on the date of a merger, share exchange, asset acquisition, share purchase, reorganization or similar Business Combination involving the Maker and one or more businesses (such date the “ Maturity Date ”). The arrangement did not include any conversion feature. In March 2023, $ 0.3 million was funded through the Amended Note, out of which $ 0.18 million was deposited in the Trust Account as the Extension Loan (defined below) and $ 0.12 million was for working capital purposes. From April to June 2023, $ 0.9 million was funded through the Amended Note, out of which $ 0.12 million was deposited into the Trust Account as an Extension Loan and $ 0.78 million was kept for working capital purposes. In addition, $ 0.15 million was repaid to the Sponsor. F- 21 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 5 – RELATED PARTY TRANSACTIONS (Continued) Amended Note (Continued) From July to September 2023, $ 0.8 million was funded through the Amended Note, out of which $ 0.12 million was deposited into the Trust Account as an Extension Loan and $ 0.68 million was kept for working capital purposes. On October 2, 2023, the Company entered into the Second Amended and Restated Promissory Note (the “ Second Amended Note ”) with the Sponsor pursuant to which the Company may borrow up to an aggregate principal amount of $ 6 million. The Second Amended Note, amended, replaced and superseded in its entirety the Amended Note and any unpaid principal balance of the indebtedness evidenced by the Amended Note has been merged into and evidenced by the Second Amended Note. The Second Amended Note is non-interest bearing and due on the date on which the Company consummates its initial business combination. If the Company completes a business combination, it would repay any loaned amounts, without interest, upon consummation of the business combination. In the event that a business combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay any loaned amounts but no proceeds from its Trust Account would be used for such repayment. On October 16, 2023, $ 0.1 million was drawn under the Second Amended Note, followed by a further draw down of $ 0.3 million on October 24, 2023. A portion of these funds in an amount of $ 120,000 was used to fund the Extension Loan. From October to December 2023, $ 0.64 million was funded through the Amended Note, out of which $ 0.17 million was deposited into the Trust Account as an Extension Loan and $ 0.47 million was kept for working capital purposes. As of December 3 1, 2023, $ 4 million was ou tstanding under the Amended Note, which comprises the entire balance of the Promissory Note – Related Party on the balance sheet as of December 31, 2023. Extension Funds The Sponsor has agreed to loan the Company (i) the lesser of (a) an aggregate of $0.18 million or (b) $0.12 per public share that remain outstanding and is not redeemed in connection with the Extension plus (ii) the lesser of (a) an aggregate of $60,000 or (b) $0.04 per public share that remain outstanding and is not redeemed in connection with the Extension for each of the six subsequent calendar months commencing on June 8, 2023 (the “ Extension Loan ”), which amount will be deposited into the Trust Account. On March 3, 2023, $ 0.18 million was deposited into the Trust Account as the initial deposit of the Extension Loan, which was funded through the Amended Note. On May 25 and June 13, 2023, $ 0.06 million was deposited into the Trust Account, respectively. On July 31 and August 31, 2023, $ 0.06 million was deposited into the Trust Account, respectively. On October 10, 2023 and October 30, 2023, $ 0.06 million was deposited into the Trust Account, respectively. On December 11, 2023 and January 3, 2024, $ 0.05 million was deposited into the Trust Account, respectively. As of December 31, 2023, the amount outstanding was $ 0.59 million. New Oxus Shares On September 22, 2023, the Sponsor entered into incentive agreements with each of Kanat Mynzhanov, the Chief Executive Officer of the Company (the “ CEO ”) and Askar Mametov, the Chief Financial Officer of the Company (the “ CFO ”), pursuant to which, solely upon and subject to successful completion of the Business Combination, the Sponsor will transfer to the CEO, 200,000 of its shares of the New Oxus and to the CFO, 50,000 of its shares of New Oxus. Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date. The fair value of these shares at September 22, 2023 was $ 2.73 million or $ 10.91 per share. The Class A shares were granted subject to a performance condition (i.e., the consummation of a Business Combination). Compensation expense related to the transfer of New Oxus shares is recognized only when the performance condition is met under the applicable accounting literature in this circumstance. The closing share price of the Class A shares of the Company on the grant date was determined to be fair value. F- 22 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS 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. As of December 31, 2023, $ 0.07 million was due to the Sponsor in connection with professional fees paid on behalf of the Company, after the repayment of an amount of $ 0.10 million to the Sponsor, in connection to an over-funding. As of December 31, 2022, $ 0.16 million was outstanding, which comprised of $ 0.06 million due to the Sponsor in connection with professional fees paid on behalf of the Company, in addition of an amount of $ 0.10 million in connection to an over-funding. 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. This arrangement was further extended to June 8, 2024 (refer to Note 1 for details). For the year ended December 31, 2023, the Company incurred $ 0.12 million for these services, of which such amount is included in the operating costs on the accompanying statements of operations. For the year ended December 31, 2022, the Company incurred $ 0.12 million for these services, of which such amount is included in the operating costs on the accompanying statements of operations. Registration Rights Pursuant to the 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. Business Combination Marketing Agreement The Company has engaged the Underwriters 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 the Underwriters a cash fee for such services upon the consummation of a Business Combination of $ 5.2 million that equals to 3.0 % of the gross proceeds of Initial Public Offering (exclusive of any applicable finders’ fees which might become payable). Legal Success Fee As a contingent arrangement, an additional fee up to $ 0.2 million is payable to the Company’s legal counsel in the event that the Company completes a Business Combination. Advisory Service Agreement On January 16, 2024, the Company entered into an agreement with IB Capital LLC (“IB CAP”) for advisory services, with the term beginning on January 16, 2024 (“the Effective Term Date ”) and ending upon upon the earlier of (i) the consummation of the Business Combination or (ii) three (3) months from the Effective Date (the “ Term End Date ”), stipulating a payment of $ 0.1 million at Effective Term Date, followed by $ 0.14 million payment on the Term End Date. F- 23 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 7 – SHAREHOLDERS’ DEFICIT Preferred Shares The Company is authorized to issue 5,000,000 preferred shares with a par value of $ 0.0001 per preferred share. On December 31, 2023, and December 31, 2022, there were no shares of preferred stock 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. On April 5, 2023, in accordance with the provisions of the Memorandum and Articles of Association, the Sponsor exercised its right to convert 1,500,000 shares of Class B ordinary shares, par value $ 0.0001 per share, of the Company into 1,500,000 shares of Class A ordinary shares, par value $ 0.0001 per share, of the Company on a one-for-one basis. As of December 31, 2023 there were 1,800,000 non-redeemable shares of Class A ordinary shares issued and outstanding, and as of December 31, 2022, there were 300,000 non-redeemable shares of Class A ordinary shares issued and outstanding. This number excludes 1,939,631 shares of Class A ordinary shares as of December 31, 2023 and 17,250,000 shares of Class A ordinary shares as of December 31, 2022, that were outstanding and 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 . All shares and associated amounts have been retroactively adjusted to reflect the share surrender. 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. F- 24 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 7 – SHAREHOLDERS’ DEFICIT (Continued) Class B Ordinary Shares (Continued) On April 5, 2023, in accordance with the provisions of the Memorandum and Articles of Association of the Company, the Sponsor exercised its right to convert 1,500,000 shares of Class B ordinary shares, par value $ 0.0001 per share, of the Company into 1,500,000 shares of Class A ordinary shares, par value $ 0.0001 per share, of the Company on a one-for-one basis. As of December 31, 2023, there were 2,812,500 shares of Class B ordinary shares issued and outstanding. As of December 31, 2022, there were 4,312,500 shares of Class B ordinary shares issued and outstanding. 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 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. F- 25 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS 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. 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, 2023, 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 $ 21,921,321 $ — $ — $ 21,921,321 $ — $ — As of December 31, 2023 the amount $ 21.92 million includes deposit in transit of $ 0.05 million. 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, 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 $ 178,532,948 $ - $ - $ 178,532,948 $ - $ - F- 26 BOREALIS FOODS INC. (FORMERLY KNOWN AS OXUS ACQUISITION CORP.) NOTES TO THE FINANCIAL STATEMENTS NOTE 9 – SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Based upon this review, the Company did not identify any subsequent events, other than already disclosed, that would have required adjustment or disclosure in the financial statements. On February 2, 2024, the Company held an extraordinary general meeting of shareholders (the “ Second Extraordinary General Meeting ”) in connection with the Transaction, whereby the holders of 1,886,751 Class A ordinary shares of the Company exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s trust account. As a result, approximately $ 21.42 million (approximately $ 11.35 per share) was removed from the Company’s Trust Account to pay such shareholders. On the Closing Date, the Transaction was consummated, following shareholder approval at the Second Extraordinary General Meeting. On February 6, 2024, a repayment of $ 0.95 million was made in connection with the Second Amended Note. On February 7, 2024, Borealis, promises to pay to the order of the Sponsor or its registered assigns or successors in interest, or order, the principal sum of $ 7.60 million in lawful money of the United States of America. No interest shall accrue on the unpaid principal balance of this Note. This Sponsor Note amends, replaces, and supersedes in its entirety that certain Second Amended Note, dated October 2, 2023, made by the Company, in favor of the sponsor, and the unpaid principal balance of the indebtedness evidenced by the Second Amended Note is being merged into and will hereafter be evidenced by this Sponsor Note. F-27