Borealis Foods Inc.

Previous wording

Borealis Foods’ unaudited condensed consolidated financial statements were prepared in accordance with U.S. GAAP. See Note 1 to our unaudited condensed consolidated financial statements for a full description of our basis of presentation.

Current wording

Borealis Foods’ unaudited condensed consolidated financial statements were prepared in accordance with U.S. GAAP. See Note 1 to our unaudited condensed consolidated financial statements for a description of our basis of presentation.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2025 was $3.57 million, primarily driven by the net loss of $8.79 million, adjusted for non-cash charges of $0.95 million for depreciation and amortization, and $0.31 million for stock-based compensation. This represents an improvement from the $11.00 million used in the same period of 2024, as Borealis benefited from enhanced gross profit due to the performance of high-margin products like Chef Woo and Woodles, which partially offset operational expenses.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2025 was $3.8 million, primarily driven by the net loss of $12.6 million, adjusted for non-cash charges of $1.40 million for depreciation and amortization. This represents a 73% improvement from the $14.3 million used in the same period of 2024, as Borealis benefited from enhanced gross profit due to the performance of high-margin products like Chef Woo and Woodles, which partially offset operational expenses.

Previous wording

Net cash used in investing activities was $0.03 million for the six months ended June 30, 2025, primarily attributable to purchases of property and equipment to support production scale and efficiency improvements. This decrease from $1.21 million in 2024 aligns with our focused approach to capital expenditures, particularly as the Company seeks to improve asset utilization and operational efficiencies without significant expansion of its production line.

Current wording

Net cash used in investing activities was $0.6 million for the nine months ended September 30, 2025, primarily attributable to purchases of intangible assets to support production scale and efficiency improvements. This decrease from $1.7 million in 2024 aligns with our focused approach to capital expenditures, particularly as the Company seeks to improve asset utilization and operational efficiencies without significant expansion of its production line.

Previous wording

Net cash provided by financing activities during the six months ended June 30, 2025, was $3.15 million, financing was driven by advances from related parties. In comparison, net cash provided by financing activities in the six months ended, was $7.73 million, and largely attributable to borrowings on the line of credit and proceeds from convertible debt. The financing activities in 2025 primarily support working capital needs and strategic investments in growth initiatives.

Current wording

Net cash provided by financing activities during the nine months ended September 30, 2025, was $3.3 million, financing was driven by advances from related parties. In comparison, net cash provided by financing activities in the nine months ended 2024, was $9.1 million, and largely attributable to borrowings on the line of credit and proceeds from convertible debt. The financing activities in 2025 primarily support working capital needs and strategic investments in growth initiatives.

Previous wording

Total SG&A expenses for the quarter declined 51% to $3.87 million, compared to $5.61 million in the second quarter of 2024. Key drivers included:

Current wording

Total SG&A expenses decreased 38% year-over-year, to $3.0 million from $4.9 million in the third quarter of 2024. Key drivers included:

Previous wording

During the first half of 2025, the Chairman and Chief Executive Officer advanced funds totaling $3.43 million to support operations. The Company did not raise external capital during the period. If the Company cannot obtain adequate additional financing, it may be required to substantially curtail or limit research, marketing, production, or distribution activities, sell assets, or seek protection from creditors under bankruptcy laws.

Current wording

During the nine months ended September 30, 2025, the Chairman and the Chief Executive Officer have advanced funds totaling $3.7 million to support operations and the Chief Executive Officer deferred approximately $0.33 million of compensation. These advances are related-party transactions; we expect to disclose the key terms, including maturity, ranking, collateral (if any), and interest. The Company did not raise external capital during the period. If the Company cannot obtain adequate additional financing, it may be required to substantially curtail or limit research, marketing, production, or distribution activities, sell assets, or seek protection from creditors under bankruptcy laws.

Previous wording

Looking ahead, management expects that increased contribution from high-volume institutional channels, combined with disciplined cost control, will enhance cash conversion and support improved working capital efficiency in the second half of 2025.

Current wording

Looking ahead, management expects that increased contribution from high-volume institutional channels, combined with disciplined cost control, will enhance cash conversion and support improved working capital efficiency in the 4 th quarter of 2025.

Previous wording

We need additional capital to meet our funding requirements through fiscal year 2025, particularly to support our expansion into the premium retail segment with a prominent global brand. As of June 30, 2025, we had cash-on-hand of $0.21 million and negative working capital of $29.49 million. Our current business plan has mitigated some capital expenditure requirements, as operational efficiencies in existing production lines have reduced the need for immediate expansion. We are actively exploring additional financing options to strengthen liquidity; however, there can be no assurance that such funding will be available on favorable terms or at all. If we cannot obtain adequate additional financing, among other things, we may have to substantially curtail or limit our research, marketing, production or distribution activities, sell assets of the Company or seek protection from creditors under bankruptcy laws, which could materially and adversely affect our business plan. Inadequate financial resources could also continue to raise substantial doubt about our ability to continue as a going concern.

Current wording

We need additional capital to meet our funding requirements through fiscal year 2025, particularly to support our expansion into the premium retail segment with a prominent global brand. As of September 30, 2025, we had cash-on-hand of $0.1 million and negative working capital of $54.6 million. Our current business plan has mitigated some capital expenditure requirements, as operational efficiencies in existing production lines have reduced the need for immediate expansion. We are actively exploring additional financing options to strengthen liquidity; however, there can be no assurance that such funding will be available on favorable terms or at all. If we cannot obtain adequate additional financing, among other things, we may have to substantially curtail or limit our research, marketing, production or distribution activities, sell assets of the Company or seek protection from creditors under bankruptcy laws, which could materially and adversely affect our business plan. Inadequate financial resources could also continue to raise substantial doubt about our ability to continue as a going concern.

Previous wording

The Company has not raised external capital in the first half of 2025 but is actively evaluating financing alternatives, including debt and equity issuances, to support ongoing operations and strengthen the balance sheet.

Current wording

The Company did not raise external capital during the first nine months of 2025 but is actively evaluating several financing alternatives, including incremental debt capacity, equity issuances, and strategic partnerships tied to long-term supply programs.

Previous wording

For the six months ended June 30, 2025, “Adjusted EBITDA,” a non-GAAP measure, is defined as net income attributable to us before (1) income taxes, (2) depreciation and amortization, of $1.0 million, (3) interest expense, of $2.5 million, (4) new product launch of $1.2 million, (5) training, of $0.4 million, (6) deferred stock compensation $0.3 million, (7) business transaction costs, of $1.0 million, and (8) business development and other extraordinary charges, of $1.1 million. For the three months ended June 30, 2025, “Adjusted EBITDA,” a non-GAAP measure, is defined as net income attributable to us before (1) income taxes, (2) depreciation and amortization, of $0.5 million, (3) interest expense, of $1.2 million, (4) new product launch of $0.7 million, (5) training, of $0.2 million, (6) deferred stock compensation $0.3 million, (7) business transaction costs, of $0.5 million, and (8) business development and other extraordinary charges, of $0.5 million. Management and our Board of Directors use this non-GAAP measure for purposes of evaluating our performance. Furthermore, the Compensation Committee of our Board of Directors uses such measure to evaluate management’s performance. We, therefore, believe that the use of this non-GAAP measure provides useful information to investors and other stakeholders by allowing them to view our business through the eyes of management and our Board of Directors, facilitating comparisons of results across historical periods and focus on the underlying ongoing operating performance of our business. As noted above, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.

Current wording

For the nine months ended September 30, 2025, “Adjusted EBITDA,” a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, (2) depreciation and amortization, of $1.4 million, (3) interest expense, of $4.4 million, (4) new product launch of $1.8 million, (5) training, of $0.6 million, (6) deferred stock compensation $0.3 million, (7) professional fees, of $0.4 million, and (8) business development and other extraordinary charges, of $1.6 million. For the three months ended September 30, 2025, “Adjusted EBITDA,” a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, (2) depreciation and amortization, of $0.5 million, (3) interest expense, of $1.9 million, (4) new product launch of $0.6 million, (5) training, of $0.3 million, (6) deferred stock compensation $0.0 million, (7) business professional fees, of $0.4 million, and (8) business development and other extraordinary charges, of $0.5 million. Management and our Board of Directors use this non-GAAP measure for purposes of evaluating our performance. Furthermore, the Compensation Committee of our Board of Directors uses such measure to evaluate management’s performance. We, therefore, believe that the use of this non-GAAP measure provides useful information to investors and other stakeholders by allowing them to view our business through the eyes of management and our Board of Directors, facilitating comparisons of results across historical periods and focus on the underlying ongoing operating performance of our business. As noted above, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.

Previous wording

For the six months ended June 30, 2024, “Adjusted EBITDA,” a non-GAAP measure, is defined as net income attributable to us before (1) income taxes, (2) depreciation and amortization, of $1.4 million, (3) interest expense, of $2.6 million, (4) new product launch of $4.0 million, (5) training, of $0.9 million, (6) deferred stock compensation $1.3 million, (7) business transaction costs, of $1.5 million, and (8) business development and other extraordinary charges, of $2.1 million. For the three months ended June 30, 2024, “Adjusted EBITDA,” a non-GAAP measure, is defined as net income attributable to us before (1) income taxes, (2) depreciation and amortization, of $0.4 million, (3) interest expense, of $1.1 million, (4) new product launch of $2.4 million, (5) training, of $0.4 million, (6) deferred stock compensation $1.3 million, (7) business transaction costs, of $0.4 million, and (8) business development and other extraordinary charges, of $0.4 million. Management and our Board of Directors use this non-GAAP measure for purposes of evaluating our performance. Furthermore, the Compensation Committee of our Board of Directors uses such measure to evaluate management’s performance. We, therefore, believe that the use of this non-GAAP measure provides useful information to investors and other stakeholders by allowing them to view our business through the eyes of management and our Board of Directors, facilitating comparisons of results across historical periods and focus on the underlying ongoing operating performance of our business. As noted above, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.

Current wording

For the nine months ended September 30, 2024, “Adjusted EBITDA,” a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, of $0.0, (2) interest expense, of $3.8 million, (3) depreciation and amortization, of $1.9 million, (4) training, of $1.4 million, (5) business transaction costs, of $1.8 million, (6) new product launch of $5.1 million, (7) one time formulation and product development costs, of $2.5 million, and (8) deferred stock compensation $1.3 million. For the three months ended September 30, 2024, “Adjusted EBITDA," a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, (2) interest expense, of $1.2 million, (3) depreciation and amortization, of $0.5 million (4) other non-operating items, (5) training, of $0.5 million, (6) business transaction costs, of $0.3 million, (7) new product launch, of $1.1 million, (8) one-time formulation and product development costs, of $1.3 million. Management and our Board of Directors use this non-GAAP measure for purposes of evaluating our performance. Furthermore, the Compensation Committee of our Board of Directors uses such measure to evaluate management’s performance. We, therefore, believe that the use of this non-GAAP measure provides useful information to investors and other stakeholders by allowing them to view our business through the eyes of management and our Board of Directors, facilitating comparisons of results across historical periods and focus on the underlying ongoing operating performance of our business. As noted above, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.