Borealis Foods Inc.

Current report

The risk factors set forth below update and supplement the risk factors disclosed in the Annual Report. Except as set forth below, there have been no material changes from the risk factors disclosed in the Annual Report. The risk factors disclosed in the Annual Report, together with the updated and supplemental risk factors set forth below, should be carefully considered, together with the other information in this Quarterly Report and our other filings with the SEC, in evaluating the Company and our Common Shares and Warrants. The risks described in the Annual Report and below are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, or results of operations.

Current report

Approximately $33.3 million of related-party indebtedness is subject to contractual automatic conversion into Common Shares on or after July 1, 2026, and any such conversion will result in substantial dilution to existing shareholders.

Current report

On April 27, 2026, in connection with the Oxus Credit Agreement, we entered into a Conversion Agreement with Oxus Capital PTE Ltd. (“Oxus Capital”), our Chief Executive Officer Reza Soltanzadeh, and our Non-Executive Chairman Barthelemy Helg (together, the “Shareholders”), and a Subscription Agreement with Oxus Capital. Pursuant to the Subscription Agreement, we are obligated to use commercially reasonable efforts to consummate one or more equity financings resulting in aggregate gross proceeds of at least $70.0 million at a price of not less than $9.00 per share on or before July 1, 2026 (the “Equity Financing Condition”). If the Equity Financing Condition is not satisfied, the Conversion Agreement provides for the automatic conversion of approximately $29.1 million of indebtedness previously advanced by the Shareholders to the Company, plus approximately $4.3 million of accrued interest (calculated through June 30, 2026), into Common Shares.

Current report

We do not currently have any commitments for the equity financing contemplated by the Subscription Agreement, and the $9.00 per share threshold is substantially above recent trading prices of our Common Shares. As a result, we expect that the Equity Financing Condition will not be satisfied by July 1, 2026, and that the conversion contemplated by the Conversion Agreement will be triggered. The number of Common Shares issuable upon conversion will depend on the conversion price determined under the Conversion Agreement, and the conversion price is expected to be substantially below the $9.00 per share threshold contemplated by the Subscription Agreement. Accordingly, if and when the conversion is effected, the conversion will result in substantial dilution to our existing shareholders and a significant further increase in the beneficial ownership and voting power of Oxus Capital and its affiliates, who are already our controlling shareholder group.

Current report

As described in the following risk factor, the issuance of Common Shares upon the conversion contemplated by the Conversion Agreement is expected to require shareholder approval under Nasdaq Listing Rules 5635(b) and potentially 5635(d). The Conversion Agreement contains a “Required Approvals” provision that defers the conversion and correspondingly extends the maturity of the related indebtedness until such shareholder approvals are obtained. The interaction between the July 1, 2026 contractual conversion trigger and the Nasdaq-driven deferral creates a continuing overhang on our Common Shares, the duration and ultimate resolution of which depends on factors outside our control, including the timing of any shareholder meeting we are able to convene and the outcome of the shareholder vote.

Current report

Issuances of Common Shares upon conversion of related-party indebtedness require shareholder approval under Nasdaq Listing Rules 5635(b) and 5635(d), which approval has not been obtained and was not sought at our June 29, 2026 annual meeting of shareholders.

Current report

The issuance of Common Shares upon (i) the 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 $3.0 million convertible promissory note issued to Oxus Capital on May 29, 2026 described in Note 11 (collectively, the “Required Issuances”) is expected to require the prior approval of our shareholders under Nasdaq Listing Rule 5635(b) (change of control) and potentially Nasdaq Listing Rule 5635(d) (issuance of 20% or more of the outstanding Common Shares at a price less than the Nasdaq minimum price).

Current report

The Required Issuances were not submitted to a vote of our shareholders at our June 29, 2026 annual meeting of shareholders. The Conversion Agreement and the Note each defer the applicable conversion and extend the applicable maturity until the required shareholder approvals are obtained. We intend to convene a special meeting of shareholders, or to include the required proposals at our next annual meeting of shareholders, to seek the required approvals.

Current report

We cannot assure you that we will obtain the required shareholder approvals on a timely basis or at all. Under Nasdaq’s voting requirements applicable to issuances under Listing Rule 5635, the shares to be issued in the transactions, and shares held by Oxus Capital and its affiliates as interested parties, may be subject to limitations on voting on the related proposals. If we fail to obtain the required shareholder approvals, the conversion contemplated by the Conversion Agreement will continue to be deferred, the related indebtedness will remain outstanding (subject to the corresponding maturity extensions and continuing accrual of interest at the contractual rates), and the overhang created by the Conversion Agreement will continue to weigh on the trading price of our Common Shares. In addition, if we are required to restructure or amend the Conversion Agreement or the Oxus Credit Agreement in order to address the deferral or to obtain shareholder approval, any such restructuring or amendment could be on terms less favorable to us and our non-affiliated shareholders than the existing terms. Failure to obtain the required approvals could also adversely affect our continued listing on the Nasdaq Capital Market.

Current report

Substantial doubt about our ability to continue as a going concern has not been alleviated.

Current report

As disclosed in the Annual Report, our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern. Notwithstanding the refinancing of the FrontWell Capital Partners credit facility through the April 27, 2026 Oxus Credit Agreement and the additional $3.0 million provided under the May 29, 2026 amendment thereto, management has concluded under ASC 205-40 that substantial doubt has not been alleviated, because management’s plans cannot be assessed as probable of being effectively implemented. Material conditions continue to exist, including our need to consummate at least $70.0 million of equity financing at $9.00 per share on or before July 1, 2026 (for which we have no commitments), the conversion overhang and Nasdaq shareholder-approval requirements described above, our continued reliance on demand and past-due obligations to related parties, and the fact that our total liabilities continue to exceed our total assets. See Note 1 to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Current report

Oxus Capital and its controlling shareholder exercise significant influence over our Company and may increase that influence further upon conversion of related-party indebtedness.

Current report

Oxus Capital, our former SPAC sponsor, beneficially owns, through its controlling shareholder Kenges Rakishev, approximately 39.09% of our outstanding Common Shares. Oxus Capital is also our senior secured lender under the Oxus Credit Agreement (as amended), holds a portion of the related-party indebtedness subject to the Conversion Agreement, and is entitled to appoint two members of our Board of Directors, one of whom (Pavel Mynzhanov) was appointed in May 2026. As a result, Oxus Capital and Mr. Rakishev have significant influence over our business, strategy, financing, and governance, including the ability to influence or determine the outcome of most matters submitted to our shareholders for approval. If the conversion contemplated by the Conversion Agreement is effected following receipt of the required shareholder approvals, the beneficial ownership and voting power of Oxus Capital and its affiliates will increase further, potentially to a level that constitutes majority ownership and control of the Company. The interests of Oxus Capital and Mr. Rakishev may differ from those of our other shareholders, and conflicts of interest may arise in connection with related-party transactions, financings, and other matters in which Oxus Capital has a direct or indirect interest.

Current report

We are not yet confirmed as compliant with Nasdaq Listing Rule 5620(a).

Current report

On January 12, 2026, we received a notice from the Nasdaq Listing Qualifications Department that we were 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 each fiscal year. Nasdaq granted us an extension until June 29, 2026 to regain compliance. We held our annual meeting of shareholders on June 29, 2026. We expect to receive confirmation from Nasdaq that we have regained compliance with Listing Rule 5620(a); however, we have not received such confirmation as of the date of this Quarterly Report. If, contrary to our expectations, Nasdaq determines that we have not regained compliance, our Common Shares and Warrants could become subject to delisting from the Nasdaq Capital Market, which would materially and adversely affect the liquidity and trading price of our securities, our ability to raise additional capital, and our relationships with customers, suppliers, and other counterparties.

Previous report

The risk factor titled “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” is amended and restated as follows:

Previous report

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.

Previous report

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. As of the ninemonths ended September 30, 2025 the amount we owe on outstanding Notes exceed the amount of cash on hand and consequently, unless we are able to raise funds to pay off the Notes, generate sufficient cash to pay off the Notes or extend and amend the maturity dates the Company is at substantial risk that the noteholders could assert rights against the Company. There can be no assurance that we would be able to avoid insolvency or to make timely payments on our debt or payments to our Item suppliers. If we were to default, 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 of the Company, or seeking protection from creditors under bankruptcy or insolvency laws.

Previous report

The risk factor titled “We have a limited operating history which makes it difficult to evaluate our business and prospects” is amended and restated as follows:

Previous report

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

Previous report

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 September 30, 2025, we had cash-on-hand of $0.19 million and a negative working capital of $25.30 million USD. 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. 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:

Previous report

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.