Borealis Foods Inc.

Borealis Foods Inc. is an integrated food science and manufacturing company that redefines affordable nutrition through popular ramen noodle brands including Chef Woo, Chef Ramsay, Ramen Express, and Woodles. The company operates with U.S.-based production facilities and serves as an innovation partner to prominent national and international food producers, retailers, and distributors. Borealis Foods has developed the first complete protein dough containing all nine essential amino acids and entered the market with ready-to-eat meals featuring 20 grams of complete plant-based protein per serving, distributed through both retail and institutional or foodservice channels. The company’s innovative technology was used in the development of its first vertical, ramen noodles, which are produced and packaged by its wholly-owned technologically advanced manufacturing company, Palmetto Gourmet Foods, located in Saluda, South Carolina.

The company’s products are currently available in approximately 30,000 points of distribution primarily in the U.S., Canada, Mexico, and Latin America, across channels including mass merchandisers like Walmart, club stores like Costco and Sam’s Club, limited assortment retailers like Aldi and Publix, traditional supermarkets like Albertsons, Winn-Dixie, and Save Mart, regional retailer channels, and e-commerce distributors like Amazon, Walmart.com, and Instacart. Borealis Foods was founded in 2019 with a vision of building sustainable, affordable, and nutritious food products, developed in response to growing global challenges in health, climate change, natural resource use, and world hunger. The company’s manufacturing facility in Saluda, South Carolina is over 200,000 square feet, is British Retail Consortium AA+ rated food-grade facility certified, and currently has four fully automated cup and pillow production lines with the capacity to host six instant noodle production lines capable of producing 600 million meals per year.

For the fiscal year ended December 31, 2025, net revenue grew 8.7% year-over-year to $30.08 million ¹, gross profit improved 60% to $3.51 million ², and total SG&A declined 35.6% from the prior year. The net loss of $18.98 million ³ for fiscal 2025 reflects the lingering burden of a capital structure shaped by the 2024 Reverse Recapitalization. As of December 31, 2025, the company had cash and cash equivalents of approximately $0.06 million ⁴, a working capital deficit of approximately $(61.76) million ⁵, and an accumulated deficit of approximately $109.8 million ⁶. The company’s independent registered public accounting firm has expressed substantial doubt about its ability to continue as a going concern in its reports on the 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 a new Credit Agreement with Oxus Capital PTE Ltd., a related party and a major shareholder. On April 27, 2026, certain wholly owned subsidiaries entered into a Credit Agreement with Oxus Capital PTE Ltd. providing for a term loan of up to $17.0 million ⁷, secured by substantially all of the company’s assets, including mortgages on the manufacturing facility and distribution center in Saluda, South Carolina. 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.

The company’s largest customer represented approximately 23% of revenues in 2025 ⁸, and its two largest customers in the aggregate represented approximately 35% of net revenues ⁹, with no single customer representing more than 23% of net revenues. The company had 140 full-time employees as of December 31, 2025, including 117 in manufacturing operations, one in research and development, nine in sales and marketing, two in human resources, five in finance, two in legal, and four in administration.

Management has identified recurring losses and negative cash flows from operations as factors raising substantial doubt about the company’s ability to continue as a going concern. The company is focused on executing strategic initiatives to drive revenue growth, manage expenses, and secure additional financing to address these risks. Management believes the going concern condition is a capital structure challenge, not a reflection of the operating business, and that the manufacturing facility, institutional customer base, and improving unit economics are intact and improving.

Management has implemented strategic and operational initiatives to address the going concern conditions, including continued expansion of the institutional food service channel with committed demand from several partners. Chef Woo, the flagship high-protein brand, continues to grow and carries the company’s highest product margins. The food service channel launched in fiscal 2024 has grown into a meaningful revenue contributor and is expected to be a major driver of the company’s future revenues and margin expansion. The company has not generated a negative gross margin quarter since the second quarter of 2025.

The company has contracted institutional relationships with leading global retailers, multinational food and beverage companies, and other food service customers whose combined demand, if fulfilled, would bring the facility to and beyond the utilization levels needed for sustained profitability. Management believes these relationships represent real contracted revenue and provide the most direct path to the volume levels that transform the fixed cost structure from a headwind into an advantage.

Subsequent to December 31, 2025, the company completed the refinancing of the FrontWell credit facility through the Oxus Capital Term Loan, which was used to repay and fully discharge the FrontWell credit facility. The Oxus Term Loan bears interest at 12% per annum, is interest-only during Year 1, amortizes on a straight-line basis over 48 months commencing May 2027, and matures in April 2031. The completion of the Oxus Term Loan in April 2026 has resolved the most critical capital structure constraint identified at year-end 2025 and materially reduces the total external capital required to reach operational sustainability.

The company is pursuing equity offerings, convertible debt, strategic partnerships, and other financing alternatives to provide the working capital required to scale production and normalize vendor payment terms. 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 ¹⁰, which would reduce the debt burden but result in substantial dilution to existing shareholders. As of the date of the Annual Report, the company has not completed the Required Equity Financing, and completion of a $70 million equity offering at $9.00 per share would require raising proceeds at a price substantially above recent trading prices.

The company expects operating cash usage to continue to moderate as gross margins expand and revenue grows toward the volume levels at which fixed overhead is more fully leveraged. Management is confident that the combination of operational progress, institutional demand pipeline, asset base, and ongoing financing initiatives provides a credible pathway to financial sustainability, though there can be no assurance that management’s plans will be achieved within the timeframes required.

The company faces material risks related to its financial condition, including having minimal cash on hand of approximately $0.06 million ⁴ as of December 31, 2025, a working capital deficit of approximately $(61.76) million ⁵, and substantial doubt about its ability to continue as a going concern expressed by its independent registered public accounting firm. The company’s senior secured debt is held by Oxus Capital PTE Ltd., a related party and the company’s largest shareholder, which creates potential conflicts of interest and limits financial flexibility. Approximately $33.3 million of shareholder debt may automatically convert into Common Shares on or after July 1, 2026 ¹⁰ if the company does not complete equity financings of at least $70 million at $9.00 per share, resulting in substantial dilution to existing shareholders. The company is not currently in compliance with certain Nasdaq listing requirements and failure to regain compliance by June 29, 2026 could result in delisting of its securities. The company’s business operations and financial results have been and could continue to be adversely affected by the 2026 Iran war, including the closure of the Strait of Hormuz and resulting disruptions to global energy, commodity, and supply chain markets, with the Federal Reserve Bank of Dallas estimating that the Strait of Hormuz closure could reduce global real GDP growth by approximately 2.9 percentage points on an annualized basis. The company is also subject to risks from the evolving U.S.-Canada trade environment, including tariffs under Section 232 and Section 122 of applicable U.S. trade laws, Canadian counter-tariffs, and the outcome of the CUSMA review process scheduled for July 1, 2026. A significant portion of revenue is concentrated with a limited number of customers, with sales to two customers accounting for approximately 35% of net revenues for the year ended December 31, 2025 ⁹.

Management’s message to shareholders emphasizes that the company continued to execute its strategic repositioning and channel diversification in 2025, with emphasis on institutional and food service growth, gross margin expansion, and structural cost reduction. Management states that the net loss of $18.98 million for fiscal 2025 reflects the lingering burden of a capital structure shaped by the 2024 Reverse Recapitalization, not operational underperformance, and that management is actively engaged in refinancing discussions and financing initiatives designed to resolve this mismatch and fully unlock the earnings power of improving operations. The two or three strategic priorities emphasized include continued expansion of the institutional food service channel with committed demand from several partners, the growth of Chef Woo as the flagship high-protein brand carrying the company’s highest product margins, and the completion of the Oxus Capital Term Loan refinancing which extends the primary debt maturity to April 2031.