Borealis Foods Inc.
For the period ended Mar 31, 2026. Filed Jun 30, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Jun 30, 2026
BRLS$0.91-19.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-19.
0001213900-25-112699
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-06-30.
0001213900-26-073767
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 83 previous paragraphs and 91 current paragraphs.
41 unchanged; 9 reworded; 41 added; 28 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
The first quarter of 2026 reflects continued operational progress against our core strategic priorities: institutional channel expansion, gross margin defense, and SG&A rationalization. Net revenue increased 8.0% year-over-year to $7.37 million, loss from operations improved 29.3% to $(2.06) million from $(2.92) million in Q1 2025, and total SG&A declined 24.0% to $2.90 million. Net loss improved 16.1% to $(3.51) million from $(4.19) million in the prior year period.
Current report
Consistent with Borealis Foods’ strategy of partnership with prominent national and international food producers, retailers and distributors, the Company expanded institutional manufacturing partnerships and food service customer base through the addition of two global food manufacturers. One production arrangement was entered into during the first quarter of 2026 and the second was entered shortly after quarter-end. Under these arrangements, a leading global cereal and snack food company and a major multinational consumer packaged goods company now have production arrangements with the Company for manufacturing at our Saluda, South Carolina facility.
Current report
These relationships build upon the Company’s existing network of institutional partnerships and further expand our contracted demand pipeline and accelerate the path toward higher capacity utilization. Management believes these partnerships are an important step in the continued development of the Company’s institutional manufacturing business. The Company believes these relationships reflect confidence in the quality and capabilities of the PGF facility; as production volumes under these arrangements increase, the Company expects they may contribute to improved capacity utilization and greater absorption of fixed manufacturing costs, although the timing and extent of such benefits will depend on customer demand and production schedules.
Current report
The unaudited condensed consolidated financial statements included in this Quarterly Report have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
Current report
Net revenue increased 8.0% year-over-year to $7.37 million for the three months ended March 31, 2026, compared to $6.85 million for the three months ended March 31, 2025. Gross sales increased 8.0% to $7.78 million from $7.23 million in the prior year period. The growth was driven by continued expansion of our institutional food service channel, including increased volumes from existing partners and the initial contribution from new major manufacturing partnerships entered into during the first quarter.
Current report
The quarter marks the beginning of a meaningful expansion in our customer base and contracted production volume. During Q1 2026, the Company entered into production arrangements with two globally recognized consumer food companies, one a leading global cereal and snack manufacturer and the other a major multinational consumer packaged goods company with an extensive food and beverage portfolio. These arrangements add two significant sources of contracted volume to our existing institutional relationships and are expected to contribute meaningfully to revenue and capacity utilization beginning in the second quarter of 2026 and accelerating through the remainder of the year.
Current report
The annualized revenue run-rate implied by Q1 2026 net revenue is approximately $29.47 million. Management anticipates this run-rate to increase materially as the new co-packing arrangements and expanded institutional volumes ramp through the remainder of 2026. Revenue concentration with any single mass retail partner has continued to decline, consistent with our strategic objective of building a diversified, high-quality institutional manufacturing portfolio that generates consistent large-order volume at favorable margins.
Current report
Sales discounts and allowances were $0.41 million for Q1 2026, or 6.0% of gross sales, consistent with Q1 2025 at $0.38 million (also 6.0% of gross sales), reflecting stable promotional discipline as our customer mix continues to evolve toward institutional and manufacturing channels with lower promotional requirements.
Current report
Gross profit for the three months ended March 31, 2026 was $0.84 million (11.0% of net revenue), compared to $0.90 million (13.0% of net revenue) for the three months ended March 31, 2025, a decrease of $0.06 million. Non-GAAP gross margin, less depreciation, was 16.0% for Q1 2026 compared to 20.0% for Q1 2025. The year-over-year margin comparison reflects a product mix shift in Q1 2026 as we onboard new partners initial production runs which typically carry lower per-unit margins as lines are qualified and production efficiencies are established. Management expects gross margin to recover and expand as these new relationships scale to full volume and line efficiencies are optimized.
Current report
The primary drivers of the gross profit variance are:
Current report
Volume-driven COGS increase: Cost of goods sold, excluding depreciation, increased $0.68 million year-over-year commensurate with the 8.0% increase in revenue, reflecting higher raw material and direct labor costs on the larger production base. As a percentage of net revenue, cost of goods sold (excluding depreciation) was 83.4% in Q1 2026 versus 80.0% in Q1 2025.
Current report
New customer onboarding costs: Q1 2026 reflects the initial production qualification runs and related efficiency ramp-up costs associated with the new major manufacturing partnerships. These are transitional costs that are expected to normalize as production volumes reach steady-state.
Current report
Depreciation reduction: Depreciation within cost of goods sold declined to $0.39 million in Q1 2026 from $0.48 million in Q1 2025, a reduction of $0.09 million, reflecting the continued benefit of the machine-hours depreciation method under which charges vary with actual production utilization.
Current report
The capacity utilization opportunity remains the most powerful lever available to the Company. Our Saluda, South Carolina facility operates at an installed capacity of 600 million meals per year, and current production levels represent a small fraction of that capacity. The addition of the new manufacturing partnerships in Q1 2026 is the most direct mechanism available to us for increasing utilization. We believe the contracted demand pipeline now in place with our institutional and co-packing partners provides the clearest pathway we have had to date toward achieving that utilization level.’
Current report
Total selling, general and administrative expenses declined 24.0% year-over-year to $2.90 million, or 39.0% of net revenue, for the three months ended March 31, 2026, compared to $3.82 million, or 56.0% of net revenue, for the three months ended March 31, 2025. This represents the continuation of the structural SG&A reduction that accelerated in the second half of fiscal 2025. The $0.92 million reduction in Q1 2026 SG&A is broad-based across all expense categories and reflects normalization of our cost base as the food service channel matures.
Current report
Key drivers of the Q1 2026 SG&A improvement include:
Current report
The Q1 2026 annualized SG&A run-rate of approximately $11.60 million continues the downward trajectory. Management expects this run-rate to remain stable or continue to improve, with the new manufacturing relationships not expected to require material incremental SG&A investment given the institutional nature of those arrangements.
Current report
As of March 31, 2026, our primary sources of liquidity were borrowings under the FrontWell Capital Partners credit facility and advances from related parties, as cash generated from operations were not sufficient to fund our operating requirements. As of the balance sheet date, we had cash and cash equivalents of approximately $0.48 million and a working capital deficit of approximately $(65.02) million. The Company was reliant on related party funding and vendor payment timing to meet near-term obligations as of March 31, 2026.
Current report
As of March 31, 2026, the FrontWell term facility carried a balloon payment of approximately $14.08 million due in August 2026, with an additional $2.21 million outstanding under the revolving line of credit. This scheduled maturity, occurring within twelve months of the balance sheet date, represented the most significant near-term capital structure risk as of March 31, 2026. Management was actively engaged in discussions with FrontWell and evaluating alternative secured financing arrangements supported by the Company’s $43.51 million net PP&E asset base in order to refinance or extend this obligation prior to its maturity.
Current report
The addition of two major global food manufacturers as manufacturing customers, one at the end of Q1 2026 and one shortly thereafter, is expected to improve the Company’s liquidity trajectory by generating contracted, large-order institutional volume that improves working capital predictability and strengthens the borrowing base. Management believes this expanded demand pipeline positions the Company to improve its working capital profile as these relationships reach full production volume in the quarters ahead.
Current report
Subsequent to March 31, 2026, the Company completed two related-party financing transactions that materially changed its capital structure and liquidity position. The April 27, 2026 Oxus Credit Agreement was previously disclosed in the Company's Annual Report on Form 10-K; the May 29, 2026 Oxus Convertible Promissory Note was not.
Current report
On April 27, 2026, the FrontWell credit facility was retired in full through a $17.00 million term loan from Oxus Capital, a related-party major shareholder controlled by Kenges Rakishev, eliminating the August 2026 balloon maturity. On May 29, 2026, the Company issued a separate $3.0 million senior unsecured convertible promissory note to Oxus Capital, bearing interest at 10% per annum and maturing August 29, 2026 (subject to automatic extension pending receipt of required shareholder approvals), convertible at Oxus Capital's election at maturity into Common Shares at $1.45 per share, subject to a 49.9% beneficial ownership blocker. These transactions are described in detail under “Subsequent Events” above and are not reflected in the March 31, 2026 balance sheet.
Current report
The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As of March 31, 2026, conditions existed that raised substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued. Those conditions included: (i) recurring net losses, including a net loss of $3.51 million for the three months ended March 31, 2026; (ii) net cash used in operating activities of approximately $0.12 millon for the three months ended March 31, 2026; (iii) a working capital deficit of approximately $(65.02) million as of March 31, 2026; and (iv) the FrontWell term facility balloon payment of approximately $14.08 million due in August 2026, which was within twelve months of the balance sheet date.
Current report
As of March 31, 2026, management’s plans to address the going concern conditions included the following:
Current report
FrontWell Refinancing: Management was actively engaged in discussions with FrontWell Capital Partners regarding the refinancing, amendment, or extension of the term facility prior to its August 2026 maturity. The Company’s $43.51 million net PP&E asset base, representing one of the most advanced ramen manufacturing facilities in North America, was expected to support asset-based refinancing at a scale sufficient to materially extend the Company’s debt runway.
Current report
New Institutional Manufacturing Partnerships: During the first quarter of 2026 and shortly thereafter, the Company entered into production arrangements with two major global food manufacturers. These relationships were expected to generate meaningful contracted production volume beginning in Q2 2026, improving capacity utilization, revenue predictability, and the Company’s borrowing base.
Current report
Continued Related Party Financial Support: The Company’s Chairman and CEO have historically provided, and as of March 31, 2026 were expected to continue providing, financial support as needed. Advances of $2.05 million and $0.28 million, respectively, had been provided by the Chairman and CEO subsequent to December 31, 2025 and prior to the filing date of the Annual Report on Form 10-K and their continued support was considered a mitigating factor in management’s going concern assessment.
Current report
Additional Financing: The Company was actively pursuing additional equity offerings, convertible debt, and strategic financing arrangements to provide working capital to support the institutional production ramp and to strengthen the balance sheet.
Current report
SG&A Cost Reduction: Total SG&A for the three months ended March 31, 2026 was $2.90 million, a 24.0% reduction from the prior year period, reflecting a lower and more sustainable operating cost structure that reduces the amount of revenue required to achieve operating breakeven.
Current report
Subsequent to March 31, 2026, the Company executed certain elements of its plan: on April 27, 2026, the FrontWell credit facility was retired in full through the $17.0 million Oxus Credit Agreement with Oxus Capital, a related-party major shareholder controlled by Kenges Rakishev, and on May 29, 2026, the Company issued a separate $3.00 million unsecured convertible promissory note to Oxus Capital. These transactions eliminate the August 2026 FrontWell balloon maturity that was the most significant near-term capital structure risk identified as of the balance sheet date. Notwithstanding these transactions, management has concluded under ASC 205-40 that substantial doubt about the Company's ability to continue as a going concern has not been alleviated. Material conditions remain, including: (i) the requirement to consummate at least $70.00 million of equity financing at $9.00 per share on or before July 1, 2026, for which the Company has no commitments and which threshold is substantially above recent trading prices of the Common Shares; (ii) if such financing is not consummated, the contractual conversion of approximately $29.13 million of related-party indebtedness (plus approximately $4.26 million of accrued interest as of June 30, 2026) into Common Shares, which conversion is itself subject to receipt of shareholder approvals required under Nasdaq Listing Rules 5635(b) and 5635(d) that have not been obtained; (iii) the Company’s continued reliance on demand and past-due obligations to related parties; and (iv) the fact that the Company’s total liabilities continue to exceed total assets.
Current report
Subsequent Events
Current report
The Company evaluated events and transactions occurring after March 31, 2026 through the date these financial statements were available to be issued. The following subsequent events are disclosed as they are material to the financial condition and results of operations of the Company.
Current report
Related Party Refinancing — April 27, 2026
Current report
On April 27, 2026, the Company's subsidiaries entered into the Oxus Credit Agreement with Oxus Capital PTE Ltd., a major shareholder of the Company controlled by Kenges Rakishev (the beneficial owner of approximately 39.09% of the Company's outstanding Common Shares), as more fully described in Note 4 and Note 11 to the unaudited condensed consolidated financial statements. The proceeds from this loan were used to: (i) retire in full the outstanding principal and accrued interest under the FrontWell Capital Partners credit facility, including both the term loan (with an approximately $14.08 million balloon that had been due in August 2026) and the revolving line of credit (approximately $2.69 million outstanding as of December 31, 2025); and (ii) repay a portion of existing related party obligations. The transaction eliminates the August 2026 FrontWell maturity event that had been identified as the most significant near-term capital structure risk in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Current report
Conversion Agreement. In connection with the Oxus Credit Agreement, the Company entered into a Conversion Agreement with Oxus Capital, Reza Soltanzadeh (“CEO”), and Barthelemy Helg (“Non-Executive Chairman”) (collectively, the “Shareholders”). Pursuant to the Conversion Agreement, approximately $29.1 million in aggregate principal amount of indebtedness previously advanced by the Shareholders to the Company, plus approximately $4.3 million in accrued interest (calculated through June 30, 2026), 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 on or before July 1, 2026. The term loan under the Oxus Credit Agreement is expressly excluded from the indebtedness subject to conversion. If the automatic conversion occurs, existing shareholders would experience substantial dilution. Board Reconstitution. Pursuant to the Oxus Credit Agreement, the Company was required, no later than May 11, 2026, to reconstitute its Board of Directors by appointing Pavel Mynzhanov and Zaure Algaziyeva (or such other individuals acceptable to Oxus Capital). Pavel Mynzhanov, who has served as a Director of Oxus Capital since June 2022, was appointed to the Board in May 2026.
Current report
Nasdaq Shareholder Approval Requirements. The issuance of Common Shares upon (i) the automatic conversion of approximately $29.1 million of related-party indebtedness (plus approximately $4.3 million of accrued interest as of June 30, 2026) under the Conversion Agreement and (ii) the conversion of the Oxus Convertible Promissory Note described above is expected to require shareholder approval under Nasdaq Listing Rules 5635(b) (change of control) and potentially 5635(d) (issuance of 20% or more of outstanding Common Shares at a price below the Nasdaq minimum price). Shareholder approval of these matters was not sought at the Company’s June 29, 2026 annual meeting. The Conversion Agreement and the Note each contain provisions that defer the applicable conversion and extend the applicable maturity until the required shareholder approvals are obtained. The Company intends to convene a special meeting of shareholders, or to include the required proposals at its next annual meeting, to seek the required approvals. There can be no assurance that such approvals will be obtained.
Current report
Additional Related Party Financing — May 29, 2026
Current report
On May 29, 2026, the Company issued a $3.0 million senior unsecured convertible promissory note to Oxus Capital, bearing interest at 10% per annum and maturing August 29, 2026 (subject to automatic extension if required shareholder approvals for conversion have not been obtained). The Note is convertible at Oxus Capital's election at maturity into Common Shares at $1.45 per share, subject to a 49.9% beneficial ownership blocker. The Note constitutes a related party transaction. See Note 11.
Current report
The April 27, 2026 and May 29, 2026 related party financings collectively: (i) eliminate the August 2026 FrontWell balloon maturity that had constituted the most critical near-term going concern trigger; (ii) consolidate the Company’s secured debt into related party obligations with, management believes, more flexible repayment terms; and (iii) provide $3.00 million in incremental working capital to support the operational ramp. Notwithstanding these transactions, substantial doubt about the Company’s ability to continue as a going concern has not been alleviated under ASC 205-40, as more fully described above under “Going Concern” and in Note 1 to the unaudited condensed consolidated financial statements.
Current report
EarlyBirdCapital Escrow Shares. As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, in November 2025, in connection with the extension of a promissory note originally issued to EarlyBirdCapital, Inc. (“EBC”), Barthelemy Helg and Reza Soltanzadeh (through Zagros Alpine Capital ULC) each provided 500,000 Common Shares as collateral. Following an alleged default under the note, the escrowed shares were transferred to EBC. In late April 2026, EBC advised the Company that a portion of such shares had been sold and the proceeds applied against amounts outstanding. On May 8, 2026, the Board of Directors determined that such shares had been provided solely for the benefit of the Company and resolved that the Company would take appropriate steps to make Mr. Helg and Mr. Soltanzadeh whole. As of the date of this Quarterly Report, no replacement shares have been issued.
Showing the first 40 of 41 passages. Open the source sections for the rest.
Removed paragraphs (28)
Previous report
The Company continued to execute a strategic repositioning of its revenue base and customer portfolio in 2025, with an emphasis on gross margin expansion and operational efficiency. While total revenue declined compared to the prior year, gross profit turned positive, reflecting improved pricing dynamics, a more favorable product mix, and a deliberate move away from low-margin, high-volume retail partnerships.
Previous report
The Reverse Recapitalization
Previous report
On February 23, 2023, Borealis Foods Inc., a corporation incorporated under the laws of Canada (“Legacy Borealis”), entered into a Business Combination Agreement (as amended, amended and restated, supplemented, or otherwise modified from time to time, the “Business Combination Agreement”) with Oxus Acquisition Corp. (“Oxus”) and 1000397116 Ontario Inc., an Ontario corporation and a wholly owned subsidiary of Oxus (“Newco”). On February 7, 2024, Legacy Borealis, Oxus, and Newco consummated the transactions (collectively, the “Reverse Recapitalization”) contemplated by the Business Combination Agreement by means of a statutory arrangement under the Canada Business Corporations Act and the Business Corporations Act (Ontario), implemented in accordance with the terms and conditions set forth in the Business Combination Agreement and the related plan of arrangement (as amended, amended and restated, supplemented, or otherwise modified from time to time, the “Plan of Arrangement”) following the approval at an extraordinary general meeting of the shareholders of Oxus held on February 2, 2024.
Previous report
Pursuant to the terms of the Business Combination Agreement, among other things: (i) Oxus domesticated and continued as a corporation under the laws of Ontario, Canada (“New Oxus”); and (ii) pursuant to the Plan of Arrangement, (a) Newco and Legacy Borealis amalgamated (the “Legacy Borealis Amalgamation”, and the amalgamated corporation resulting therefrom, “Amalco”), with Amalco surviving the Legacy Borealis Amalgamation as a wholly-owned subsidiary of New Oxus; and (b) following the Legacy Borealis Amalgamation, New Oxus and Amalco amalgamated (the “Borealis Amalgamation,” and together with the Legacy Borealis Amalgamation, the “Amalgamations,” and the corporation resulting therefrom. “Borealis,” as a corporation amalgamated under the Business Corporations Act (Ontario)), with Borealis surviving the Borealis Amalgamation. Borealis continues under the name “Borealis Foods Inc.”.
Previous report
Unless otherwise indicated, references to the “Company,” “our,” “us” or “we” in this Item 2 refer to Oxus Acquisition Corp., or Oxus, before the consummation of the Transaction. References to our “management” or our “management team” refer to our officers and directors, and references to the “sponsor” refer to Oxus Capital Pte. Ltd. The term “New Borealis” refers to Borealis Foods Inc. after the consummation of the Business Combination.
Previous report
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 report
Net revenue for the nine months ended September 30, 2025 was $21.1 million, a slight increase from $20.9 million in 2024. The increase was primarily driven by continued growth in institutional channels and branded sales, offset by the planned exit from certain low-margin retail programs.
Previous report
Gross profit improved to $2.5 million (12% of net revenue) from $1.9 million (9%) in the prior-year period, an increase of $0.6 million (32%). Excluding depreciation, non-GAAP gross margin was approximately 18%, consistent with 18% in 2024.
Previous report
Total SG&A expenses declined 40% year-over-year to $10.7 million from $17.7 million in 2024. This reduction resulted from:
Previous report
Loss from operations improved to $8.2 million, compared with $15.8 million in the prior year, a 48% improvement. Adjusted EBITDA loss (non-GAAP) was $2.0 million, compared to $2.0 million in 2024. Net loss narrowed to $12.6 million, compared with $19.6 million, a 36% improvement year-over-year.
Previous report
Revenue and Customer Trends
Previous report
Net revenue for the three months ended September 30, 2025 was $7.1 million, compared to $7.7 million in the same period of 2024, representing a slight decline of $0.6 million (8%). The modest reduction reflects timing of customer shipments and completion of certain mass retail programs offset by continued growth from institutional and branded accounts including Ramen Express, and Chef Woo.
Previous report
The Company continued its transition toward food-service and institutional markets, which provide improved pricing power and stable recurring demand. Retail exposure was intentionally reduced during the period as management concentrated on higher-margin SKUs and branded products aligned with institutional growth.
Previous report
Product Mix and Margin Performance
Previous report
Gross profit for the quarter totaled $1.0 million (14% of net revenue) versus $1.3 million (17%) in the prior-year quarter. The year-over-year change reflects temporary shifts in production and product mix ahead of the seasonal rollouts, along with higher packaging costs and promotional timing. Depreciation expense was consistent at $0.5 million, and excluding depreciation, non-GAAP gross margin approximated 21%, compared with 23% in 2024.
Previous report
Margin expansion is expected to resume as new higher-margin branded products, including Woodles and Chef Woo, begin shipping in the fourth quarter and extend through April.
Previous report
As the Company enters its primary seasonal production window, investments in business development and R&D were made to support new high-margin SKUs and expanded institutional partnerships.
Previous report
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 report
Loss from operations improved to $1.9 million, compared with $3.6 million in the prior-year period, while net loss narrowed to $3.8 million from $4.8 million. Adjusted EBITDA (non-GAAP) was $0.3 million, compared with $0.0 million in the prior year, reflecting timing of higher-margin shipments now expected in Q4 2025 through early 2026.
Previous report
As of September 30, 2025, the Company continued to operate under liquidity constraints. However, ongoing improvements in product mix, operating efficiency, and SG&A reductions have begun to stabilize working capital requirements. Management remains focused on cash preservation and aligning inventory purchases with committed demand from large institutional customers.
Previous report
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 report
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 report
Management has evaluated whether conditions and events raise substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance of these unaudited condensed consolidated financial statements (November 19, 2025). While the Company has historically experienced recurring operating losses and liquidity constraints, the financial results through the nine months ended September 30, 2025 reflect meaningful and measurable progress toward operational stabilization, improved margins, and a more durable customer and product mix.
Previous report
During the third quarter of 2025, the Company executed a significant cost-structure reset and achieved sustained financial improvements across several key areas:
Previous report
Although these improvements represent a clearer operating trajectory than in prior periods, the Company’s current cash position and forecasted operating requirements indicate that additional capital will be necessary to fund operations over the next twelve months. As of September 30, 2025, current liabilities included approximately $10.1 million outstanding under our revolving line of credit, approximately $15.00 million under our term loan, $5.2 million of current notes payable, and $19.1 million due to related parties (including demand notes and near-term maturities). Our debt facilities contain financial and other covenants; failure to maintain compliance, or to obtain waivers, could result in acceleration and foreclosure on collateral. As of September 30, 2025, cash was approximately $0.1 million, and current liabilities significantly exceeded current assets, reflecting continuing liquidity pressure, including current maturities of debt and related-party obligations. The Company has had extended payment terms and past-due accounts payable with the majority of its vendors and suppliers. These vendors and suppliers have had long term relationships with the Company and have been supporting in providing accommodations that help manage working capital needs to meet production demands as the Company advances its capital-raising efforts to strengthen its balance sheet.
Previous report
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 report
Management believes the strengthened margin profile, the shift to recurring institutional demand, and the structural reduction in SG&A provide a foundation for improved financial performance in future periods. Nonetheless, there can be no assurance that external financing will be available on acceptable terms or at all. If adequate funding is not secured, the Company may be required to reduce production, delay capital expenditures, implement additional cost-reduction measures, divest certain assets, or seek protection under U.S. bankruptcy laws.
Previous report
Because these conditions continue to raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date of issuance (November 19, 2025), the accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern and do not include adjustments that might result from this uncertainty.
Reworded paragraphs (9)
Previous wording
Borealis Foods is a pioneering, integrated food science and manufacturing company that is redefining affordable nutrition. Known for popular ramen noodle brands like the high protein Chef Woo, Chef Ramsay, Ramen Express, and Woodles, Borealis Foods brings innovative fusion flavors from diverse culinary traditions, creating delicious and nutritious meal options for consumers. With U.S.-based production facilities, the company’s portfolio reflects a commitment to quality, innovation, and sustainability.
Current wording
Borealis Foods is a pioneering, integrated food science and manufacturing company that is redefining affordable nutrition. Known for popular ramen noodle brands including the high-protein Chef Woo, Chef Ramsay, Ramen Express, and Woodles, Borealis Foods brings innovative fusion flavors from diverse culinary traditions, creating delicious and nutritious meal options for consumers. With U.S.-based production facilities, the company’s portfolio reflects a commitment to quality, innovation, and sustainability.
Previous 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.
Current wording
Net cash used in operating activities for the three months ended March 31, 2026 was $0.12 million, primarily driven by the net loss of $3.51 million, adjusted for non-cash charges of $0.39 million for depreciation and amortization. This represents a 91% improvement from the $1.37 million used in the same period of 2025 primarily as a result of favorable changes in working capital, including a $0.87 million decrease in accounts receivable and a $1.08 million decrease in inventories, partially offset by a slight year-over-year decline in gross profit ($0.84 million in Q1 2026 compared to $0.90 million in Q1 2025).
Previous 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.
Current wording
Net cash used in investing activities was $0 million for the three months ended March 31, 2026. This decrease from $0.03 million in the three months ended March 31, 2025 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 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.
Current wording
Net cash provided by financing activities during the three months ended March 31, 2026, was $0.54 million, financing was driven by advances from related parties. In comparison, net cash provided by financing activities in the three months ended March 31, 2025, was $0.94 million, and largely attributable to borrowings on the line of credit, proceeds from convertible debt and related party advances.
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 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.
Current wording
We need additional capital to meet our funding requirements through the next twelve months, particularly to support our expansion into the premium retail segment with a prominent global brand. As of March 31, 2026, we had cash-on-hand of $0.48 million and negative working capital of $65.02 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 following represents a summary of warrants outstanding and exercisable on September 30, 2025 and December 31, 2024:
Current wording
The following represents a summary of warrants outstanding and exercisable as of March 31, 2026:
Previous wording
Following the closing of the Reverse Recapitalization, Borealis Foods has the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of Common Shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 days within a 30 trading day period commencing once the warrants become exercisable and ending on the third trading day prior to the date on which Borealis Foods gives proper notice of such redemption and provided certain other conditions are met.
Current wording
Following the closing of the Reverse Recapitalization, Borealis has the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of Common Shares equals or exceeds $18.00 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 days within a 30 trading day period commencing once the warrants become exercisable and ending on the third trading day prior to the date on which Borealis gives proper notice of such redemption and provided certain other conditions are met.
Previous wording
The public warrants are identical to the private placement warrants in material terms and provisions due to the expiration on the transfer of, the private placement warrants 30 days after the completion of the Reverse Recapitalization.
Current wording
The public warrants are identical to the 2021 private placement warrants in material terms and provisions, except the private placement warrants were not transferable, assignable or salable until 30 days after the completion of the Reverse Recapitalization.
Previous 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.
Current wording
For the three months ended March 31, 2026, “Adjusted EBITDA,” a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, (2) depreciation and amortization, of $0.39 million, (3) interest expense, of $1.45 million, (4) new product launch of $0.46 million, (5) training, of $0.13 million, (6) deferred stock compensation $0.04 million, (7) professional fees, of $0.42 million, and (8) business development and other extraordinary charges, of $0.44 million. For the three months ended March 31, 2025, “Adjusted EBITDA,” a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, (2) depreciation and amortization, of $0.48 million, (3) interest expense, of $1.26 million, (4) new product launch of $0.57 million, (5) training, of $0.20 million, (6) deferred stock compensation $0.04 million, (7) business professional fees, of $0.48 million, and (8) business development and other extraordinary charges, of $0.61 million. Management and our Board of Directors use this non-GAAP measure for purposes of evaluating our performance. Furthermore, the Compensation Committee of our Board of Directors uses such measure to evaluate management’s performance. We, therefore, believe that the use of this non-GAAP measure provides useful information to investors and other stakeholders by allowing them to view our business through the eyes of management and our Board of Directors, facilitating comparisons of results across historical periods and focus on the underlying ongoing operating performance of our business. As noted above, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Comparison of the Nine Months Ended September 30, 2025 and 2024
Previous report — wording carried elsewhere
The following sets forth a summary of our results of operations for the presented months ($ in thousands):
Previous report — wording carried elsewhere
Adjusted EBITDA is a non-GAAP financial metric. See “How we Evaluate Our Operations” below for an explanation of the terms EBITDA and Adjusted EBITDA and a reconciliation of net income to EBITDA and Adjusted EBITDA for each applicable period.
Previous report — wording carried elsewhere
Operating Expenses and SG&A Trends
Previous report — wording carried elsewhere
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.