Borealis Foods Inc.

You should consider carefully the risks and uncertainties described below, together with all of the other information contained in this Annual Report. If any of the following events occur, our business, financial condition, operating results and cash flow may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business or results of operations.

The following is a summary of some of the risks and uncertainties as of the date of the filing of this Annual Report on Form 10- K that could materially adversely affect our business, financial condition, results of operations and cash flow. You should read this summary together with the more detailed description of each risk factor contained below in the section titled “Risk Factors.”

Risks Related to Our Financial Condition

Risks Related to Our Business

Risks Related to Technology and Intellectual Property

Risks Related to Legal and Regulatory Matters

Risks Related to Ownership of Our Securities

General Risk Factors

Risks Related to Our Financial Condition

We have minimal cash on hand, substantial indebtedness, and there is substantial doubt about our ability to continue as a going concern.

As of December 31, 2025, we had cash and cash equivalents of approximately $0.06 million and a working capital deficit of approximately $(61.76) million. Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern in its reports on our consolidated financial statements for the years ended December 31, 2025 and 2024.

Subsequent to December 31, 2025, the Company completed the refinancing of its former credit facility with Frontwell Capital Partners Inc. through the Oxus Credit Agreement described below, which eliminated the near-term maturity risk associated with the Frontwell facility. However, we continue to have recurring losses, negative cash flows from operations, and a highly leveraged capital structure. Our ability to continue as a going concern depends on our ability to generate sufficient revenue and cash flow from operations, manage our debt service obligations under the Oxus Credit Agreement (which bears interest at 12% per annum), and obtain additional financing.

In addition, if the Required Equity Financing under the Conversion Agreement is not completed by July 1, 2026, approximately $33.3 million of shareholder debt will automatically convert into Common Shares, which would reduce our debt burden but result in substantial dilution to existing shareholders. Even if the conversion occurs, we may continue to require additional capital to fund our operations and service our remaining debt obligations. There can be no assurance that we will be able to obtain additional financing on acceptable terms, or at all.

If we are unable to generate sufficient cash flow or obtain additional financing, we may be required to further curtail our operations, sell assets, or seek protection under applicable bankruptcy or insolvency laws. Any of these events could result in the total loss of your investment.

Our historical financial statements have been prepared under the assumption that we will continue as a going concern. Our registered public accounting firm has issued a report on our consolidated financial statements for the years ended December 31, 2025 and 2024, that includes an explanatory paragraph expressing substantial doubt in our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to obtain additional equity or debt financing. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. However, if adequate funds are not available to us when we need them, we could be unable to fund our ongoing business, which, in turn, could cause our customers or suppliers to decrease the amount of business they do with us or terminate their relationship with us, or we could go into default on our outstanding indebtedness, which, in turn, would permit our creditors to enforce remedies against us and cause us to consider reducing, discontinuing, or selling operations or seeking protection from creditors, and further raise substantial doubt about our ability to continue as a going concern. The substantial doubt regarding our ability to continue as a going concern may adversely affect our ability to obtain new financing on reasonable terms or at all. Additionally, if we are unable to continue as a going concern, our shareholders may lose some or all of their investment in our Company. Any one or more of such events would have a material adverse effect on our business, financial condition, results of operations and cash flow and our shareholders could lose some or all of their investment.

Our potential insolvency, inability to pay our debt, or bankruptcy would have a material adverse effect on our business, financial condition, results of operations, cash flow, cash available for distribution as well as our ability to service our debt obligations, and could result in our inability to continue as a going concern.

If we were to default on our debt obligations, it would likely cause a significant or complete reduction in the operating cash flow generated by our product sales. There can be no assurance that we would be able to avoid insolvency, make timely payments on our debt or payments to creditors or suppliers. If a default were to occur, we may incur substantial costs, that could have a severe adverse effect on our business, financial condition, results of operations and cash flow, and we might take actions to respond to any default including the curtailment or reduction in operations, the sale of assets or the Company, or seeking protection from creditors under bankruptcy or insolvency laws. Any such action could materially adversely affect our business, financial condition, results of operation and cash flow.

Our senior secured debt is held by Oxus Capital PTE Ltd., a related party and our largest shareholder. The concentration of our debt with a related party lender that also has board appointment rights and significant equity ownership creates potential conflicts of interest and limits our financial flexibility.

On April 27, 2026, certain of our wholly owned subsidiaries entered into a Credit Agreement with Oxus Capital PTE Ltd. (“Oxus”), providing for a term loan of up to $17.0 million, secured by substantially all of our assets, including mortgages on our manufacturing facility and distribution center in Saluda, South Carolina. Oxus is the Company’s former SPAC sponsor and, through its controlling shareholder Kenges Rakishev, a beneficial owner of approximately 24.7% of our outstanding Common Shares. Pavel Mynzhanov, a Director of Oxus, was appointed to our Board in connection with the Oxus Credit Agreement.

The term loan matures on April 27, 2031, bears interest at 12% per annum (14% upon default), and requires 48 consecutive monthly principal and interest payments commencing May 1, 2027. At Oxus’s election, accrued interest from the closing date through April 30, 2027 (approximately $2.0 million) may be converted into Common Shares at the average closing market price for the 60 trading days preceding May 1, 2027.

The Oxus Credit Agreement contains customary affirmative and negative covenants and events of default. Among other things, the departure of Reza Soltanzadeh from his position as president or in a similar senior management role constitutes an event of default, subject to a 180-day cure period. A default under, or challenge to the validity of, the Conversion Agreement described below also constitutes an event of default. The Oxus Credit Agreement also limits our ability to make capital expenditures in excess of 120% of budgeted amounts and restricts our ability to make restricted payments without the Lender’s prior written consent.

Our senior debt is concentrated with a single related party lender that also holds a significant equity position, has the right to appoint directors to our Board, and is a party to the Conversion Agreement described below. This concentration creates potential conflicts of interest between Oxus’s interests as our lender, equity holder, and board-appointing party and the interests of other shareholders. There can be no assurance that decisions made in connection with the Oxus Credit Agreement, including the exercise of remedies upon default or the conversion of interest into equity, will be aligned with the interests of our other shareholders.

If we are unable to generate sufficient cash flow to service our debt obligations, or if we experience an event of default under the Oxus Credit Agreement, Oxus may accelerate the outstanding obligations, foreclose on our assets (which constitute substantially all of our property), and exercise other remedies, any of which could have a material adverse effect on our business, financial condition, and results of operations and could result in the loss of our manufacturing facility and other assets.

Approximately $33.3 million of shareholder debt may automatically convert into Common Shares on or after July 1, 2026, which could result in substantial dilution to existing shareholders.

In connection with the Oxus Credit Agreement, we entered into a Conversion Agreement with Oxus Capital PTE Ltd., Reza Soltanzadeh (our Chief Executive Officer), and Barthelemy Helg (our Non-Executive Chairman) (collectively, the “Shareholders”). Pursuant to the Conversion Agreement, approximately $29.1 million in aggregate principal amount of indebtedness, plus approximately $4.2 million in accrued interest (calculated through June 30, 2026), previously advanced by the Shareholders to the Company, will automatically convert into Common Shares if the Company does not consummate one or more equity financings resulting in aggregate gross proceeds of at least $70 million at a price of $9.00 per share (the “Required Equity Financing”) on or before July 1, 2026 (the “Equity Raise Deadline”).

The conversion price will be based on the volume weighted average closing price of our Common Shares for the 20 consecutive trading days ending on the trading day immediately preceding July 1, 2026. Based on the Company’s approximately 21.4 million Common Shares currently outstanding and recent trading prices, the conversion of the full amount of the indebtedness could result in the issuance of a very significant number of additional Common Shares.

As of the date of this Annual Report, we have not completed the Required Equity Financing. Completion of a $70 million equity offering at $9.00 per share would require raising proceeds at a price that is substantially above recent trading prices for our Common Shares. There can be no assurance that the Required Equity Financing will be completed on or before the Equity Raise Deadline, or at all. If the Required Equity Financing is not completed, the conversion will occur automatically, and the resulting dilution to existing shareholders could be substantial.

In addition, the Conversion Agreement contains restrictions on our ability to issue equity securities prior to the Equity Raise Deadline without the consent of the Shareholders, which may limit our ability to pursue alternative financing arrangements. Shares issuable pursuant to the Conversion Agreement would be issued in reliance on applicable exemptions from registration under the Securities Act and would constitute “restricted securities” within the meaning of Rule 144 under the Securities Act. The Conversion Shares would bear customary restrictive legends and may not be offered, sold or transferred absent registration or an applicable exemption from registration. The Company also agreed to use commercially reasonable efforts to maintain compliance with SEC reporting requirements to preserve the availability of Rule 144 for resales of the Conversion Shares.

The conversion of the indebtedness into Common Shares would eliminate a significant portion of our outstanding debt and related interest obligations, which could improve our balance sheet. However, the dilutive impact on existing shareholders could be material, and the issuance of a large number of shares could adversely affect the trading price of our Common Shares and our ability to raise capital in the future.

Our lender has the option to convert approximately $2.0 million in Year 1 accrued interest into Common Shares, which would further dilute existing shareholders.

Under the Oxus Credit Agreement, Oxus may elect, at its sole discretion, on or before May 1, 2027, to convert all accrued interest from the closing date through April 30, 2027 (approximately $2.0 million) into Common Shares at the average closing market price for the 60 trading days preceding May 1, 2027. If Oxus elects to convert, existing shareholders would experience additional dilution beyond the dilution that may result from the Conversion Agreement described above. The election to convert is entirely within Oxus’s discretion, and we have no ability to prevent or control the conversion or the resulting dilution.

We will require substantial capital investment in the future, and our inability to raise adequate capital could affect our ability to continue as a going concern.

We will require significant funding to continue our operations and execute our business plan. Our ability to raise additional capital, on timely and favorable terms or at all, depends on various factors, including macroeconomic conditions and market conditions as well as our liquidity, financial condition and results of operations. If these factors deteriorate, our ability to raise capital to fund ongoing operations, capital needs and business activities could be significantly negatively impacted. Additionally, our ability to raise capital may be affected by developments under our senior secured term loan with Oxus Capital PTE Ltd. and the terms of the Conversion Agreement, which restricts our ability to issue equity securities prior to July 1, 2026 without the consent of certain shareholders. If we cannot obtain adequate additional financing on acceptable terms, we may need to substantially curtail or limit our production activities, sell assets or the Company or seek protection from creditors under bankruptcy laws, which could materially and adversely affect our business plan. Inadequate financial resources could also raise substantial doubt about our ability to continue as a going concern.

Our financial results and future growth have been, and could in the future be, harmed by currency exchange rate fluctuations.

As our international business grows, our results of operations have been and could in the future be materially adversely impacted by changes in foreign currency exchange rates. Revenues and certain expenses in markets outside of the United States are recognized in local foreign currencies, and we are exposed to gains or losses from the translation of those amounts into U.S. dollars for consolidation into our financial statements. In addition, the business of our suppliers may also be disrupted by currency exchange rate fluctuations by making their purchases of raw materials more expensive and more difficult to finance. As a result, foreign currency exchange rate fluctuations may materially adversely impact our results of operations.

Insolvency, credit problems or other financial difficulties that could confront our retail partners could expose us to financial risk.

We sell to many of our retail partners on open account terms and do not require collateral or a security interest in the inventory we sell them. Consequently, our accounts receivable with our retail partners are unsecured. Insolvency, credit problems, or other financial difficulties confronting our retail partners could expose us to financial risk. These actions could expose us to risks if they are unable to pay for the products they purchase from us. Financial difficulties of our retail partners could also cause them to reduce the number or size of stores, and the amount of shelf space dedicated to our products. Further, economic conditions resulting in diminished liquidity or credit availability, increases in inflation rates, rising interest rates, declines in consumer confidence, declines in economic growth, or uncertainty about economic stability, may lead to a material reduction in sales of our products by our retail partners. Any reduction in sales by, or loss of, our current retail partners or customer demand, or credit risks associated with our retail partners, could harm our business, financial condition, results of operations, and cash flow.

Risks Related to Our Business

We have a limited operating history which makes it difficult to evaluate our business and prospects.

We have a limited operating history, which makes it difficult to evaluate our business and prospects to forecast our future results. We were founded in 2019. Although we have experienced substantial revenue growth on an annual basis, we have incurred losses since inception. As of December 31, 2025, we had an approximate accumulated deficit of $(109.8) million USD. There can be no assurance that revenue growth will continue in the future. In addition, we may experience substantial fluctuations in operating results in the future caused by various factors, including:

As a strategic response to a changing competitive environment, we may elect from time to time to make, among other things, certain pricing, product, or marketing decisions, and any such decisions could have a material adverse effect on our periodic results of operations, including revenue and profits from quarter to quarter.

The loss of key personnel, or failure to attract and retain other highly qualified personnel in the future, could harm our business.

Our success depends to a significant degree upon the continued contributions of our senior operating management, including our co-founders, Reza Soltanzadeh, Chief Executive Officer, and Barthelemy Helg, non-executive Chairman of the Board. The loss of the services of Mr. Soltanzadeh or Mr. Helg could have a material adverse effect on our business, financial condition, results of operations, and cash flow. Our success and future growth also will depend on our ability to attract and retain qualified management, manufacturing, technical and sales and marketing personnel. Competition for such personnel in the industry is intense. There can be no assurance that we will be successful in attracting and retaining such personnel.

Some members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage being a public company that is subject to significant regulatory oversight and reporting obligations under the federal, foreign and state or provincial securities laws and the continuous scrutiny of securities analysts and investors. These obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm its business, financial condition, results of operations, and cash flow.

Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) collectively have limited prior experience managing a public company and limited prior public company financial reporting experience. They are and will continue to be heavily dependent on engaging and dealing with outside professional advisors, primarily accountants, lawyers, and financial advisors who are not and will not be affiliated with our independent auditors. We do not have any formal arrangements with professionals to help our CEO and CFO and cannot provide any assurances that we will be able to establish arrangements with professionals on terms or costs that are acceptable or affordable to us.

As a public company, we incur significant legal, accounting, and other expenses that we did not incur as a private company. We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which will require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules adopted by the SEC and The Nasdaq Capital Market to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial reporting controls and changes in corporate governance practices. Further, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, imposes significant corporate governance and executive compensation related provisions on public companies. Recent legislation permits companies that are emerging growth companies within the meaning of the federal securities laws (each, an “EGC”) to implement many of these requirements over a longer period and up to five years from the pricing of their initial public offering. Shareholder activism, the current political environment and government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways that cannot currently be anticipated.

It is anticipated that the rules and regulations applicable to public companies have increased and will continue to increase substantially the legal and financial compliance costs incurred by us and make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have an adverse effect on our business. The increased costs will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of its products or services. For example, it is expected that these rules and regulations will make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage. The amount or timing of additional costs we may incur to respond to these requirements cannot be predicted or estimated. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or our board committees or as executive officers.

Our dependence on suppliers may materially adversely affect our operating results and financial position.

We have no long-term contracts with our suppliers. Although we attempt to maintain generally a minimum of two vendors for each required food ingredient, certain raw materials and products used by us in processing our products are currently acquired or available from only one source. For example, Puris Foods is our preferred supplier of the pea protein used for our ramen products. We have from time-to-time experienced significant delays in the receipt of certain of our ingredients. In the event of a disruption or other business issue with our preferred provider, we would source our pea protein from one of our other providers. A failure by a supplier to deliver quality ingredients on a timely basis, or the inability to develop alternative sources if and as required, could result in delays which could materially adversely affect our operating results and financial position.

Manufacturing and production forecasts are based on multiple assumptions. We must adequately estimate our manufacturing capacity and inventory supply. If we overestimate our demand and overbuild our capacity or inventory, we may have significantly underutilized assets. Underutilization of our manufacturing facilities can adversely affect our gross margin and other operating results.

We must accurately forecast demand for each of our products and inventory needs in order to ensure we have adequate available manufacturing capacity for each such product and to ensure we are effectively managing our inventory. Our forecasts are based on multiple assumptions which may cause our estimates to be inaccurate and affect our ability to obtain adequate manufacturing capacity and adequate inventory supply in order to meet the demand for our products, which could prevent us from meeting increased customer demand and harm our brand and our business and, in some cases, may result in fines or indemnification obligations we must pay customers or distributors if we are unable to fulfill orders placed by them in a timely manner or at all. If we overestimate our demand and overbuild our capacity or inventory, we may have significantly underutilized assets. Underutilization of our manufacturing facilities can adversely affect our gross margin and other operating results. If demand for our products experiences a prolonged decrease, we may be required to terminate or make penalty-type payments under certain supply chain arrangements, close or idle facilities and write down our long-lived assets, which would increase expenses.

If demand does not materialize at the rate forecasted, we may not be able to scale back our manufacturing expenses or overhead costs quickly enough to correspond to the lower than expected demand. If product demand decreases or we fail to forecast demand accurately, our results may be adversely impacted due to higher costs resulting from lower manufacturing utilization, causing higher fixed costs per unit produced. Further, we may be required to recognize excess or obsolete inventory write-off charges, or excess capacity charges, which would have a material negative impact on our business, financial condition, results of operations and cash flow.

We may experience volatility in costs for ingredients and packaging due to conditions that are difficult to predict.

We purchase large quantities of food ingredients. In addition, we purchase and use significant quantities of paper and film to package our products. Costs of food ingredients and packaging are volatile and can fluctuate due to conditions that are difficult to predict, including global competition for resources, weather conditions, consumer demand, and changes in governmental trade and agricultural programs. Volatility in the prices of ingredients and other supplies we purchase could increase our cost of sales and reduce our profitability. Moreover, we may not be able to implement price increases for our products to cover any increased costs, and any price increases we do implement may result in lower sales volumes. If we are not successful in managing our ingredient and packaging costs, if we are unable to increase our prices to cover increased costs or if such price increases reduce our sales volumes, then such increases in costs may materially adversely affect our business, financial condition, results of operations and cash flow.

These risks have been significantly heightened by the 2026 Iran war and the closure of the Strait of Hormuz, which have disrupted global markets for energy, petrochemicals, and fertilizer. The resulting increases in energy costs directly affect our utility, freight, and packaging costs, while fertilizer price increases may increase the cost of wheat, flour, and other crop-based ingredients used in our products. These cost pressures may persist for an extended period regardless of when the geopolitical conflict is resolved and may not be fully offset through pricing actions or other mitigation measures.

Our future success will depend, in part, on our ability to maintain our technological leadership, enhance our current food products, develop new food products that meet changing customer needs and preferences, advertise and market our food products, and influence and respond to emerging industry standards and other technological changes on a timely and cost- effective basis.

The market for processing our food products is characterized by rapidly changing technology, evolving industry standards, changes in customer needs and preferences and frequent new product introductions. Our future success will depend, in part, on our ability to maintain our technological leadership, enhance our current food products, develop new food products that meet changing customer needs and preferences, advertise and market our food products, and influence and respond to emerging industry standards and other technological changes on a timely and cost-effective basis. There can be no assurance that we will be successful in developing new food products or enhancing our existing food products on a timely basis, or that such new food products or enhancements will achieve market acceptance. In addition, there can be no assurance that food products or technologies developed by others will not render our food products or technology uncompetitive or obsolete.

Adverse climate conditions may have an adverse effect on our business. We may take various actions to mitigate our business risks associated with climate change, which may require us to incur substantial costs and may not be successful, due to, among other things, the uncertainty associated with the longer-term projections associated with managing climate risks.

Increasing concentrations of greenhouse gases in the atmosphere have generally been concluded to lead to increased ambient global temperatures, as well as changes in weather patterns and the frequency and severity of extreme weather and natural disasters. Adverse climate conditions, weather patterns, and the impact of such conditions and patterns such as drought, flood, wildfires, and rising ambient temperatures adversely impact product cultivation conditions for farmers and agricultural productivity, including by disrupting ecosystems and severely altering the growing conditions, nutrient levels, soil moisture, and water availability necessary for the growth and cultivation of crops, which would adversely affect the product quality, availability or cost of certain commodities that are necessary for our products, such as flour, paper, and edible oil. Due to climate change, we may also be subjected to decreased availability of water, deteriorated quality of water or less favorable pricing for water, which could adversely impact our manufacturing and distribution operations. These and other changes to the physical environment may adversely impact our operations or those of the suppliers on whom we rely. While we may take various actions to mitigate our business risks associated with climate change, this may require us to incur substantial costs and may not be successful, due to, among other things, the uncertainty associated with managing climate risks. Such climate risks may materially adversely affect our business, results of operations and financial condition.

The spread of contagious diseases, natural disasters, severe weather, actual or threatened hostilities or war, terrorist activity, political unrest, civil strife, and other geopolitical uncertainty may cause global economic disruption, and its impact on our business is uncertain.

The global economy can be negatively impacted by a variety of factors such as the spread or fear of spread of contagious diseases (pandemics, epidemics, or other public health crises) in locations where our products are sold, man-made or natural disasters, severe weather, actual or threatened hostilities or war, terrorist activity, political unrest, civil strife, and other geopolitical uncertainty. Such adverse and uncertain economic conditions may impact distributor, retailer, foodservice, and consumer demand for our products and may lead to material and volatile increases in commodity pricing of raw materials used by us and in other costs incurred by us. For example, in connection with the war in Ukraine, governments in the U.S., U.K. and the EU have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. The uncertainty resulting from the military conflict in Europe has given rise and may continue to give rise to increases in costs of goods and services, scarcity of certain ingredients, increased trade barriers or restrictions on global trade. Further escalation of geopolitical tensions could have a broader impact that expands into other markets where we do business, which could materially adversely affect our business and/or our supply chain, business partners or customers in the broader region, including potential destabilizing effects that such conflicts may pose for the European continent or the global oil and natural gas markets. In addition, our ability to manage normal commercial relationships with our suppliers, co-manufacturers, distributors, retailers, foodservice customers, consumers, and creditors may suffer.

As global economic conditions and commodity pricing of raw materials used by us continue to be volatile or uncertain and recessionary or inflationary pressures exist, trends in consumer discretionary spending also remain unpredictable and subject to changes. We have seen consumers shift purchases to lower-priced or other perceived value offerings during economic downturns as a result of various factors, including job losses, inflation, higher taxes, reduced access to credit, change in federal economic policy and recent international trade disputes. In particular, consumers have reduced the amount of plant-based food products that they purchase where there are conventional animal-based protein offerings, which generally have lower retail prices. In addition, consumers may choose to purchase private label products, rather than branded products, because they are generally less expensive. Distributors, retailers and foodservice customers have become more conservative in response to these conditions and have sought to reduce their inventories. Our results of operations depend upon, among other things, our ability to maintain and increase sales volume with our existing distributors, retailer and foodservice customers, our ability to attract new consumers, the financial condition of our consumers and our ability to provide products that appeal to consumers at the right price. Decreases in demand for our products without a corresponding decrease in costs could put downward pressure on margins and may materially adversely impact our financial results and financial position. Prolonged unfavorable economic conditions or uncertainty would be expected to have an adverse effect on our sales and profitability, which could be material, and may result in consumers making long-lasting changes to their discretionary spending behavior on a more permanent basis.

Consumer spending habits, including discretionary spending on food products such as ours, are affected by many factors including:

Weakness or uncertainty regarding the economy, both domestic and international, as a result of reactions to consumer credit availability, increasing energy prices, inflation, increasing interest rates, tariffs, unemployment, pandemics and other outbreaks of illness, such as a higher than average rate of influenza, adverse weather conditions, natural disasters, war, terrorist activity or other unforeseen events could materially adversely affect consumer spending habits, which may result in lower operating revenue and materially adversely affect our business, financial condition, results of operations and cash flow.

We face market competition, and if we are unable to compete effectively with our competitors, our business and operating results could be materially adversely affected.

The food and agriculture business is highly competitive, and faces increased competition as a result of consolidation, channel proliferation, and the growth of online food retailers and new market participants. Currently, the leading providers of food and agriculture products include large food and agriculture companies, as well as a number of smaller companies. Many of these companies possess financial resources significantly greater than those of ours, and accordingly, could initiate and support prolonged price competition to gain market share. In particular, the large food and agriculture companies could significantly undercut our pricing for our products. If significant price competition were to develop, we likely would be forced to lower our prices, possibly for a protracted period, which would have a material adverse effect on our business, financial condition, results of operations and cash flow and could threaten our economic viability. In addition, many of these large competitors possess marketing, agricultural and food processing resources greater than those of ours. Smaller competitors, although often faced with financial barriers, typically compete on the basis of their ability to create niche markets by rapidly introducing products of interest to local customers and then expanding. The resulting price pressure and niche loyalties could present substantial competitive challenges for us.

A portion of our revenue is derived from key customers, and changes in these relationships could affect our business.

We generate a portion of our revenue from a group of significant customers. While our customer base has become more diversified, our business remains dependent on maintaining relationships with key customers.

Changes in these relationships, including reductions in orders, changes in purchasing patterns, or the loss of one or more significant customers, could adversely affect our revenue and results of operations.

In addition, customer demand for our products may fluctuate due to factors beyond our control, including changes in consumer preferences, inventory management practices, and broader economic conditions.

We may not continue to grow or maintain our active customer base, may not be able to achieve or maintain profitability, and may not be aligned with customer trends and preferences.

There are a number of trends in consumer preferences which have an impact on us and the food industry as a whole. These include, among others, preferences for speed, convenience and ease of food preparation, natural, nutritious, and well- proportioned meals, products that are sustainably sourced and produced and are otherwise environmentally friendly, as well as a recent trend toward meat substitutes. Concerns as to the health impacts and nutritional value of certain foods may increasingly result in food producers being encouraged or required to produce products with reduced levels of salt, sugar, and fat and to eliminate trans-fatty acids and certain other ingredients. Consumer preferences are also shaped by concern over waste reduction and the environmental impact of products. Our success depends on both the continued appeal of our products and, given the varied backgrounds and tastes of our customer base, our ability to offer a sufficient range of products to satisfy a broad spectrum of preferences. Any shift in consumer preferences in the material markets in which we operate could have a material adverse effect on our business. Consumer tastes are also susceptible to change. In addition, the growing presence of alternative retail channels could negatively impact our sales if we fail to adapt. For example, consumers with increasingly busy lifestyles are choosing the online grocery channel as a more convenient and faster way of purchasing their food products, and are also increasingly using the internet for meal ideas. Our competitiveness, therefore, depends on our ability to predict and quickly adapt to consumer preferences and trends, exploiting profitable opportunities for product development without alienating our existing consumer base or focusing excessive resources or attention on unprofitable or short-lived trends. All of these efforts require significant research and development and marketing investments. If we are unable to respond on a timely and appropriate basis to changes in demand or consumer preferences and trends, our sales volumes and margins could be materially adversely affected.

If we fail to maintain adequate operational and financial resources, particularly if we continue to grow rapidly, we may be unable to execute our business plan or maintain our competitive position and high-level customer satisfaction.

We must continue to expand in order to maintain our competitive position and continue to meet our customers’ increasing demands for product, variety, quality and availability, and price/performance targets. Our ability to grow depends, to a significant extent, on our ability to expand our food processing operations, which requires significant advance capital expenditures, as well as advance expenditures and commitments for facilities, personnel, and advertising. Timely access to capital markets is essential for us to achieve our business plan. We will need to raise additional capital from equity or debt sources in order to finance our growth and capital expenditures contemplated for future periods. There can be no assurance that we will be able to raise such capital on favorable terms or at all. In the event that we are unable to obtain such additional capital, we may be required to reduce the scope of our presently anticipated expansion. Our inability to achieve projected growth could have a material adverse effect on our financial condition, results of operations and cash flow and could adversely impact our ability to compete.

We are currently experiencing rapid growth and expansion. This rapid growth has placed, and is expected to continue to place, a significant strain on our administrative, operational, and financial resources and increased demands on our systems and controls. While we believe that our operating and financial control systems and controls are adequate to address expansion plans for the next 12 months, there can be no assurance that such systems and controls will be adequate to maintain and effectively monitor future growth. Failure to continue to upgrade our operating and financial control systems or unexpected expansion difficulties could adversely affect our business, financial condition, results of operations and cash flow. We anticipate that our continued growth will require us to recruit and hire a substantial number of new managerial, agricultural and food processing, and sales and marketing personnel.

Geopolitical conflicts, including the war in Iran and the closure of the Strait of Hormuz, have disrupted global energy and commodity markets and could materially adversely affect our business.

The ongoing war involving the United States and Israel against Iran, which began on February 28, 2026, has caused severe disruption to global energy, commodity, and supply chain markets. Iran’s closure of the Strait of Hormuz, a critical maritime chokepoint through which approximately 20% of the world’s seaborne oil and a significant share of global liquefied natural gas pass, has been described by the International Energy Agency as the largest supply disruption in the history of the global oil market. Oil prices have surged significantly since the conflict began, and the closure has disrupted global trade in energy, fertilizer, petrochemicals, and other commodities.

These disruptions directly affect our business in several ways:

Peace talks between the United States and Iran have not yielded a resolution as of the date of this filing, and the duration and geographic scope of the conflict remain uncertain. If the Strait of Hormuz remains closed for an extended period, or if the conflict escalates further, the impact on global commodity markets, supply chains, and macroeconomic conditions could be severe and prolonged. Industry analysts have projected that the impact on food prices and packaging costs may persist for 12 to 24 months even after the underlying geopolitical conflict is resolved.

In addition, the continuing war in Ukraine and related sanctions continue to contribute to volatility in energy and grain markets. The combined effect of these geopolitical events on global energy, food, and commodity markets could materially adversely affect our business, financial condition, results of operations, and cash flows.

We are subject to risks related to the availability and cost of agricultural commodities and ingredients, which are largely dependent on factors outside of our control.

Our ability to secure a consistent supply of ingredients at competitive prices depends on factors beyond our control, including agricultural conditions, the availability and scale of farms producing key crops (such as wheat and peas), the financial stability of suppliers, and broader economic conditions. These factors may be further affected by geopolitical events, including ongoing conflicts in Ukraine and the Middle East, related sanctions, trade restrictions, and disruptions to global energy markets, transportation routes, and supply chains.

The ingredients used in our products are vulnerable to adverse weather conditions and natural disasters, such as floods, droughts, earthquakes, hurricanes, extreme temperatures, frosts, and pest infestations, as well as longer-term shifts in climate patterns. These conditions can reduce crop yields and quality and increase volatility in supply and pricing, which may increase our cost of goods sold and adversely affect our margins.

We source certain ingredients and materials internationally, and their price and availability may be affected by political instability, tariffs, trade policies, currency fluctuations, and the outbreak or escalation of hostilities or war, as well as disruptions to shipping routes or ports. In addition, we compete with other food producers for key ingredients, and supply constraints or increased demand may result in higher costs or limited availability.

If we are unable to obtain sufficient quantities of ingredients that meet our quality standards on favorable terms, or at all, our ability to manufacture and supply products may be adversely affected, which could materially adversely affect our business, financial condition, results of operations, and cash flows.

Our business may be affected by evolving expectations relating to environmental and sustainability matters.

Stakeholders, including customers and investors, have expressed and may continue to express expectations regarding environmental, sustainability, and sourcing practices. These expectations may influence purchasing decisions, brand perception, and business relationships.

In addition, our public statements or initiatives relating to these matters may expose us to reputational risk if such statements are challenged or not achieved. Conversely, our decisions regarding whether and how to address these matters may also impact our brand and customer relationships.

Changes in commodity costs and other operating costs could materially adversely affect our results of operations.

Our profitability depends in part on our ability to manage changes in commodity costs, including key ingredients such as grains and plant-based inputs, as well as fuel, utilities, distribution, and labor costs. These costs are subject to volatility due to factors beyond our control, including general economic conditions, inflation, supply and demand dynamics, and energy prices.

Increases in commodity and operating costs may not be fully offset through pricing actions or other cost mitigation measures, and any inability to do so could adversely affect our margins and results of operations.

In addition, weather variability and longer-term changes in climate patterns may impact the availability and cost of certain ingredients. Our efforts to source ingredients that meet our product specifications and sourcing standards may also result in higher or more variable input costs.

These risks have been heightened by the 2026 Iran war and the closure of the Strait of Hormuz. The resulting disruptions to global energy and petrochemical markets have increased our utility, freight, and packaging costs and may continue to do so for an extended period. In addition, fertilizer price increases attributable to the disruption of Strait of Hormuz trade routes may increase the cost of wheat, flour, and other crop-based ingredients used in our products.

Risks Related to Technology and Intellectual Property

Our success depends in part on our ability to innovate and respond to changing consumer preferences and industry developments.

The market for our products is characterized by evolving consumer preferences, changing industry standards, and ongoing product innovation. Our future success depends, in part, on our ability to enhance existing products, develop new products that meet changing customer needs, and respond to technological and industry developments in a timely and cost-effective manner.

There can be no assurance that we will successfully develop new products or improve existing products, or that such products will achieve market acceptance. In addition, products or technologies developed by competitors may render our offerings less competitive or obsolete.

Our business depends on our ability to protect our intellectual property and proprietary technology.

Our success and ability to compete depend in part on our proprietary technology, formulations, and processes. We rely on a combination of patent, trademark, copyright, and trade secret laws, as well as contractual protections, to protect our intellectual property.

These protections may be limited, and there can be no assurance that they will prevent misappropriation or unauthorized use of our technology, or that competitors will not independently develop similar or superior technologies.

Our intellectual property rights may be difficult to enforce and may not provide meaningful protection.

Our commercial success depends in part on our ability to secure and enforce intellectual property rights. We may not be successful in obtaining or maintaining patent protection for our technologies, and any patents that are issued may be challenged, invalidated, or circumvented.

In addition, intellectual property laws, including patent laws, are complex and subject to evolving interpretation, which may affect the scope and enforceability of our rights. As a result, our intellectual property may not provide us with a sustained competitive advantage.

Cybersecurity incidents or disruptions to our information technology systems could adversely affect our business.

We rely on information technology systems and third-party service providers to support our operations. These systems may be vulnerable to cybersecurity incidents, including unauthorized access, data breaches, malware, phishing, and other attacks.

A cybersecurity incident could result in the loss, theft, or unauthorized disclosure of sensitive information, disruption of our operations, reputational harm, and potential legal or financial exposure. While we maintain measures designed to protect our systems, such measures may not be effective against all threats, which continue to evolve in sophistication.

We also rely on third-party service providers, including cloud-based platforms, and any failure of these providers to maintain adequate security could adversely affect our operations.

We have experienced cybersecurity incidents in the past, and while such incidents have not had a material impact to date, there can be no assurance that future incidents will not have a material adverse effect on our business.

Our insurance coverage may be insufficient to cover certain risks.

Our insurance coverage, including general liability and cyber liability insurance, may not be available on acceptable terms or in sufficient amounts to cover potential claims. In addition, insurers may deny coverage for certain claims.

Any uninsured or underinsured losses, or changes in insurance coverage, including increased premiums or deductibles, could adversely affect our financial condition and results of operations.

Risks Related to Legal and Regulatory Matters

We are subject to government regulation and failure to comply could adversely affect our business.

Our operations are subject to extensive regulation by the FDA, the U.S. Department of Agriculture and other national, state, and local authorities. Specifically, we are subject to the Food, Drug and Cosmetic Act and regulations promulgated thereunder by the FDA. This comprehensive regulatory program governs, among other things, the manufacturing, composition and ingredients, packaging, and safety of food. Under this program the FDA regulates manufacturing practices for foods through its current good manufacturing practices (“GMPs”) regulations and specifies the recipes for certain foods. Our processing facilities and products are subject to periodic inspection by federal, state, and local authorities.

We seek to comply with applicable regulations through a combination of employing internal personnel to ensure quality-assurance compliance and contracting with third- party laboratories that conduct analyses of products for the nutritional-labeling requirements. However, failure to comply with applicable laws, regulations, or permit and licensing requirements could result in fines, injunctions, product recalls, seizures, or other enforcement actions, which could adversely affect our business, financial condition, and results of operations.

Changes in laws and regulations could adversely affect our business.

The manufacture and marketing of food products is highly regulated. We are subject to a variety of laws and regulations, which apply to many aspects of our business, including the sourcing of raw materials, manufacturing, packaging, labeling, distribution, advertising, sale, quality, and safety of our products. Laws and regulations are subject to change or to the adoption of new laws and regulations. Since the food industry is rapidly changing due to technological and other developments, there is a material likelihood that the laws and regulations applicable to us and our business will change or be newly adopted, particularly since we expect to be a developer or early adopter of technological and other developments in the food industry.

For example, regulatory authorities in the United States, Canada, Europe, and other jurisdictions may impose restrictions on the terminology used to describe plant-based products. If we are required to modify product labeling or marketing practices, or if our products are deemed misbranded, we could be subject to enforcement actions or required to recall or relabel products, which could adversely affect our business.

Changes in or the adoption of laws and regulations could have a material effect on us, our business, financial condition, results of operations and cash flow.

We are subject to risks associated with international sales and expansion.

A key component of our strategy is to expand sales of our products into international markets. Our existing and future international sales expose us to risks associated with operating across multiple jurisdictions, including compliance with varying regulatory requirements, tariffs and trade restrictions, and changes in trade policies.

In addition, international sales may involve longer payment cycles, increased logistics complexity, currency fluctuations, and reliance on distributors or other third parties.

Our ability to expand international sales will depend on a number of factors, including our ability to obtain sufficient financing, establish and maintain relationships with distributors and customers, navigate regulatory requirements, and compete effectively in new markets. There can be no assurance that we will be successful in executing our international sales strategy.

Climate-related laws, regulations and evolving expectations may adversely affect our business.

Federal, state, and local governments, as well as customers, consumers, and investors, have increased their focus on climate change and other environmental matters. As a result, we may be subject to new or evolving laws, regulations, and disclosure requirements relating to environmental matters.

Compliance with such requirements may increase our costs, require changes to our operations or sourcing practices, or impact how we market our products. In addition, evolving stakeholder expectations may influence purchasing decisions, customer relationships, and investor sentiment.

Failure to comply with applicable requirements, or to meet evolving expectations, could adversely affect our business, financial condition, and results of operations.

Risks Related to Ownership of Our Securities

Until such time, if ever, as we can generate substantial revenues from product sales, we expect to finance our cash needs through a combination of equity offerings, debt financings, collaboration, and distribution arrangements. We do not have any committed source of additional capital. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders’ interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our shareholders’ rights as a common shareholder. Any debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, selling our assets, making capital expenditures, declaring dividends or encumbering our assets to secure future indebtedness.

If we raise additional funds through collaboration, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed or on terms acceptable to us, we would be required to delay, limit, reduce or terminate our business operations, sell assets of the Company or seek protection from creditors under bankruptcy laws.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our Common Shares. As described in Item 9.A, “Controls and Procedures,” management has identified a material weakness in our internal control over financial reporting as of December 31, 2025 relating to insufficient accounting and financial reporting resources, lack of segregation of duties, and inadequate controls over related party transactions and debt covenant compliance. This material weakness has not been remediated as of the date of this Annual Report.

Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with our review of the adequacy of our disclosure controls and procedures or internal controls over financial reporting, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement.

We will be required to disclose changes made in our internal controls and procedures on a quarterly basis and our management will be required to assess the effectiveness of these controls annually. However, for as long as we are an EGC, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal controls over financial reporting. We could be an EGC for up to five years. An independent assessment of the effectiveness of our internal controls over financial reporting could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls over financial reporting could lead to restatements of our financial statements and require us to incur the expense of remediation.

Our Articles, together with our By-laws, and Canadian laws and regulations applicable to us may adversely affect our ability to take actions that could be deemed beneficial to our shareholders.

As an Ontario, Canada company, we are subject to different corporate requirements than a corporation organized under the laws of the United States. Our Articles, our By-laws as well as the Ontario Business Corporation Act (“OBCA”), set forth various rights and obligations that are unique to us as an Ontario company. These requirements may limit or otherwise adversely affect our ability to take actions that could be beneficial to our shareholders.

Provisions of the laws of the Province of Ontario and the federal laws of Canada may also have the effect of delaying or preventing a change of control or changes in our management. For example, the OBCA includes provisions that require any shareholder proposal that includes nominations for the election of directors to be signed by one or more holders of shares representing in the aggregate not less than 5% of the shares or 5% of the shares of a class of shares of the corporation entitled to vote at the meeting to which the proposal is to be presented.

The Investment Canada Act (or “ICA”) requires that a non-Canadian must file an application for review with the Minister responsible for the ICA and obtain approval of the Minister prior to acquiring direct control of a “Canadian business” within the meaning of the ICA, where prescribed financial thresholds are exceeded. As a “Canadian business,” an acquisition of control of us by a non-Canadian would be subject to a suspensory review if these thresholds are exceeded. Furthermore, limitations on the ability to acquire and hold our Common Shares may be imposed by the Competition Act (Canada). This legislation permits the Commissioner of Competition appointed under the Competition Act (Canada) to review any acquisition or establishment, directly or indirectly, including through the acquisition of shares, of control over or of a significant interest in us.

We are a corporation organized under the laws of the Province of Ontario, Canada with our registered office and domicile in Ontario. Moreover, a number of our directors and executive officers are not residents of the United States, and all or a substantial portion of the assets of such persons are or may be located outside the United States. As a result, investors may not be able to effect service of process within the United States upon the Company or upon such persons, or to enforce judgments obtained against the Company or such persons in U.S. courts, including judgments in actions predicated upon the civil liability provisions of the federal securities laws of the United States. It is uncertain as to whether the courts of Ontario would entertain original actions based on U.S. federal or state securities laws, or enforce judgments from U.S. courts against us or our officers and directors which originated from actions alleging civil liability under U.S. federal or state securities laws. The United States and Canada currently do not have a treaty providing for the reciprocal recognition and enforcement of judgments.

The price of our Common Shares may be volatile, and you could lose all or part of your investment.

The trading price of our Common Shares has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume. These factors include:

We may issue additional shares or other equity securities without your approval, which would dilute your ownership interest in us and may depress the market price of our shares.

We may issue additional shares or other equity securities in the future in connection with, among other things, future acquisitions, repayment of outstanding indebtedness or grants under the Incentive Plan without shareholder approval in a number of circumstances.

The issuance of additional shares or other equity securities could have one or more of the following effects:

We are not currently in compliance with certain Nasdaq listing requirements, and failure to regain compliance could result in delisting of our securities.

On January 12, 2026, we received written notice from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) indicating that we are not in compliance with Nasdaq Listing Rule 5620(a), which requires listed companies to hold an annual meeting of shareholders within twelve months of the end of their fiscal year. On March 2, 2026, Nasdaq accepted our compliance plan and granted us an extension until June 29, 2026 to hold our annual shareholders’ meeting and regain compliance.

If we fail to hold our annual meeting by June 29, 2026, Nasdaq may issue a delisting determination, although we would have the right to appeal. A delisting of our Common Shares from Nasdaq could materially adversely affect the liquidity and trading price of our securities, limit our ability to raise capital, and reduce the value of your investment.

In addition, our Common Shares may become subject to additional listing requirements, including minimum bid price, market capitalization, and other continued listing standards. Our ability to satisfy these requirements depends on factors including our financial condition, the market price of our Common Shares, and investor sentiment, which may be adversely affected by the events described in these risk factors. There can be no assurance that we will maintain compliance with all applicable Nasdaq listing requirements.

Our Board of Directors has been reconstituted at the direction of our lender, and two of our directors were appointed pursuant to requirements of the Oxus Credit Agreement.

Pursuant to the Oxus Credit Agreement, the Company was required, no later than May 11, 2026, to revise the composition of its Board of Directors and appointing Pavel Mynzhanov and Zaure Algaziyeva(or such other individuals acceptable to the Lender in its sole discretion). Mr. Mynzhanov has served as a Director of Oxus Capital PTE Ltd. since June 2022.

The appointment of lender-designated directors may affect the Board’s ability to act independently of Oxus’s interests as our creditor, equity holder, and party to the Conversion Agreement. There can be no assurance that the interests of the lender-appointed directors will be aligned with the interests of our other shareholders in all circumstances, including in connection with decisions regarding the Conversion Agreement, additional financing, asset dispositions, or other material transactions.

General Risk Factors

The global scope of our business subjects us to risks that could negatively affect our business.

We operate in multiple countries and are subject to differing and evolving economic, regulatory, and geopolitical conditions. Our ability to achieve our business objectives depends, in part, on our ability to operate effectively across these environments.

Our international sales expose us to risks including changes in trade policies, tariffs, sanctions, and other governmental actions, as well as geopolitical instability, including acts of war or other hostilities. These factors may impact our supply chain, costs, and customer demand.

In addition, certain markets may present increased risks, including political or economic instability, regulatory uncertainty, and challenges in enforcing contractual rights. Our failure to manage these risks could adversely affect our business and financial results.

Unfavorable general economic conditions could adversely affect our business, financial condition, results of operation and cash flow.

Our business, financial condition, results of operations and cash flow are substantially affected by economic conditions, including inflationary pressures, which can vary significantly by market and can impact consumer disposable income levels and spending habits. Economic conditions can be impacted by a variety of factors, including hostilities, epidemics, pandemics and actions taken by governments to manage national and international economic matters, whether through austerity, stimulus measures or trade measures, and initiatives intended to control wages, unemployment, credit availability, inflation, taxation and other economic drivers. Sustained adverse economic conditions or periodic adverse changes in economic conditions put pressure on our operating performance and business continuity disruption planning, and our business, financial condition, results of operations and cash flow may suffer as a result.

Tariffs, trade restrictions, and the evolving U.S.-Canada trade environment, including the outcome of the CUSMA review process, could increase our costs and adversely affect our operations.

Our business is subject to tariffs, duties, and other trade restrictions that may increase our input costs, affect our supply chain, or limit our ability to source materials or sell products in certain markets.

Since early 2025, the United States and Canada have been engaged in a significant trade dispute involving reciprocal tariffs. In February 2026, the U.S. Supreme Court struck down certain tariffs previously imposed under the International Emergency Economic Powers Act. The U.S. administration subsequently imposed a global 10% tariff under Section 122 of the Trade Act of 1974, with CUSMA-compliant goods generally exempt. However, tariffs on steel, aluminum, and certain derivative products remain in effect at elevated rates under Section 232 of the Trade Expansion Act of 1962, with no CUSMA exemption. Canada has imposed retaliatory counter-tariffs on certain U.S. imports, including tariffs on steel and aluminum products.

As a Canadian-incorporated company with U.S.-based manufacturing operations, we face a complex and evolving tariff environment. Our products are manufactured in the United States and sold domestically and internationally, including in Canada and Latin America. We source certain ingredients and materials from suppliers in the United States, Canada, and other jurisdictions. Changes in tariff rates, the availability or scope of CUSMA exemptions, the outcome of the CUSMA review process (which is currently scheduled for July 1, 2026), or the imposition of new tariffs or trade restrictions by the United States, Canada, or other countries could increase our raw material or distribution costs, affect the competitiveness of our products, or disrupt our supply chain.

We may not be able to shift supply arrangements to alternative sources on acceptable terms, or at all. Price increases to offset higher costs could reduce demand for our products. The imposition of tariffs or trade restrictions by foreign jurisdictions on our products could make our products less competitive in those markets. Any of these factors could materially adversely affect our business, financial condition, results of operations, and cash flows.

We are also subject to importation-related regulations, including those enforced by U.S. Customs and Border Protection (“CBP”), such as withhold release orders. The imposition of duties, quotas, or other trade measures, the withdrawal or modification of trade agreements, or delays or detentions of our shipments by CBP could disrupt our supply chain and adversely affect our operations and financial results.

The 2026 Iran war and related energy market disruptions may contribute to a broader economic downturn, inflation, and recession, which could materially adversely affect consumer demand for our products and impair our ability to raise capital.

The 2026 Iran war and the closure of the Strait of Hormuz have triggered a global energy supply disruption that has been characterized as the largest in the history of the world oil market. The resulting surge in oil, natural gas, and petrochemical prices has contributed to broad-based inflationary pressures across the global economy, including elevated fuel costs, transportation costs, and food prices. Central banks may delay or reverse planned interest rate reductions in response to higher inflation, which could further constrain consumer spending and economic growth.

The Federal Reserve Bank of Dallas has estimated that the Strait of Hormuz closure could reduce global real GDP growth by approximately 2.9 percentage points on an annualized basis. Industry observers have projected that elevated food and packaging costs may persist for 12 to 24 months even after the conflict ends. If these conditions result in a sustained economic downturn, recession, or prolonged period of elevated inflation, consumer demand for our products could decline, and our ability to maintain pricing, margins, and profitability could be adversely affected.

In addition, our ability to raise capital, refinance our debt, and attract new investors or lenders may be adversely affected by broader market volatility and investor risk aversion associated with geopolitical uncertainty and macroeconomic deterioration. These conditions may compound the liquidity and going concern risks described elsewhere in these risk factors.

Economic recessions or downturns could impair our company and harm our business, financial condition, operating results and cash flow.

Our Company may be susceptible to economic slowdowns or recessions and may be unable to repay our loans during these periods. Adverse economic conditions also may decrease the value of collateral securing some of our loans. Economic slowdowns or recessions could lead to financial losses and a decrease in revenues, net income and assets. Unfavorable economic conditions also could increase our funding costs, limit our access to the capital markets or result in a decision by lenders not to extend credit to us. These events could prevent us from increasing investments and harm our operating results.

Our failure to satisfy financial or operating covenants imposed by our lenders could lead to defaults and, potentially, termination of our loans and foreclosure on our secured assets, which could trigger cross-defaults under other agreements and jeopardize our ability to meet our obligations under the debt securities that we hold. We may incur expenses to the extent necessary to seek recovery upon default or to negotiate new terms.

Inflationary pressures have been elevated in recent years, and there is a risk of the economy entering a recession. Any such recession could negatively impact the businesses in which we operate in. These impacts may include: