What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-04-15 compared with 2024-04-15 · 799 added, 1873 removed, 129 unchanged (95% of the section changed)

Financial Statements and Supplementary Data.

The financial statements required to be filed

pursuant to this Item 8 are appended to this Annual Report.

An index of those financial statements is found in Item 15 of Part IV of this

Annual Report.

Changed in and Disagreements with Accountants on Accounting and Financial Disclosure.

On February 7, 2024, we approved the appointment

of Berkowitz Pollack Brant, Advisors + CPAs (“ BPB ”) as our independent registered public accounting firm to audit our

consolidated financial statements for the year ended December 31, 2024.

BPB served as the independent registered public accounting firm

of Legacy Borealis prior to the Transaction.

Accordingly, Marcum LLP (“ Marcum ”), Oxus’ independent registered

public accounting firm prior to the Transaction, was informed on February 7, 2024 that it will be dismissed as our independent registered

public accounting firm, effective immediately upon the filing of this Annual Report for Oxus, pre-business combination SPAC.

The report of Marcum on Oxus’ balance sheet

as of December 31, 2023 and December 31, 2022 and the related statements of operations, changes in shareholders’ (deficit) equity

and cash flows for the year ended December 31, 2022 and for the period from February 3, 2021 (inception) through December 31, 2021, did

not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope, or accounting

principles, except for an explanatory paragraph in such report regarding the substantial doubt about Oxus’ ability to continue as

a going concern.

During the period from February 3, 2021 (inception)

through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, there were no “disagreements”

(as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act) between Oxus and Marcum on any matter of accounting principles

or practices, financial disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum,

would have caused it to make reference to the subject matter of the disagreements in its reports on Oxus’ financial statements for

such periods.

During the period from February 3, 2021 (inception)

through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, there were no “reportable

events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act), except that for the quarters ended September

30, 2021, December 31, 2021, March 31, 2022, June 30, 2022, September 30, 2022, December 31, 2022, March 31, 2023, June 30, 2023, September

30, 2023 and December 31, 2023, based upon an evaluation of the effectiveness of the design and operation of its disclosure controls and

procedures, the Chief Executive Officer and the Chief Financial Officer of Oxus concluded that its disclosure controls and procedures

(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to its accounting for complex financial instruments

and prepaid expenses, as well as the chief executive officer having administrative access to the Company’s financial

reporting system.

Based on the foregoing, it was determined that Oxus had material weaknesses as of December 31, 2023 relating to its

internal controls over financial reporting.

During the period from February 3, 2021 (inception)

through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, we did not consult with BPB

regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed;

or the type of

audit opinion that might be rendered on the financial statements of Oxus or us, and no written report or oral advice was provided that

BPB concluded was an important factor considered by us in reaching a decision as to the accounting, auditing, or financial reporting issue;

or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K under

the Exchange Act) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act).

The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report.

An index of those financial statements is found in Item 15 of Part IV of this Annual Report.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

On February 7, 2024, we approved the appointment of Berkowitz Pollack Brant, Advisors + CPAs (“ BPB ”) as our independent registered public accounting firm to audit our consolidated financial statements for the year ended December 31, 2024.

BPB served as the independent registered public accounting firm of Legacy Borealis Foods prior to the Transaction.

Accordingly, Marcum LLP (“ Marcum ”), Oxus’ independent registered public accounting firm prior to the Transaction, was informed on February 7, 2024 that it will be dismissed as our independent registered public accounting firm, effective immediately upon the filing of this Annual Report for Oxus, pre-business combination SPAC.

The report of Marcum on Oxus’ balance sheet as of December 31, 2023 and December 31, 2022 and the related statements of operations, changes in shareholders’ (deficit) equity and cash flows for the year ended December 31, 2022 and for the period from February 3, 2021 (inception) through December 31, 2021, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope, or accounting principles, except for an explanatory paragraph in such report regarding the substantial doubt about Oxus’ ability to continue as a going concern.

During the period from February 3, 2021 (inception) through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, there were no “disagreements” (as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act) between Oxus and Marcum on any matter of accounting principles or practices, financial disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused it to make reference to the subject matter of the disagreements in its reports on Oxus’ financial statements for such periods.

During the period from February 3, 2021 (inception) through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act), except that for the quarters ended September 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022, September 30, 2022, December 31, 2022, March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023, based upon an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures, the Chief Executive Officer and the Chief Financial Officer of Oxus concluded that its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective due to its accounting for complex financial instruments and prepaid expenses, as well as the chief executive officer having administrative access to the Company’s financial reporting system.

Based on the foregoing, it was determined that Oxus had material weaknesses as of December 31, 2023 relating to its internal controls over financial reporting.

During the period from February 3, 2021 (inception) through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, we did not consult with BPB regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed;

or the type of audit opinion that might be rendered on the financial statements of Oxus or us, and no written report or oral advice was provided that BPB concluded was an important factor considered by us in reaching a decision as to the accounting, auditing, or financial reporting issue;

or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act).

Controls and Procedures

Limitations on effectiveness of controls and

In designing and evaluating our disclosure controls

and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable

assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the

fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls

and procedures relative to their costs.

Limitations on effectiveness of controls and procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of disclosure controls and procedures

Our management, with the participation of our

Chief Executive Officer and Chief Financial Officer, has evaluated, as of the end of the period covered by this Annual Report, the effectiveness

of Oxus’ disclosure controls and procedures (as defined in Rules 13a-15e and 15d-15e under the Exchange Act).

Based on such evaluation,

our Chief Executive Officer and Chief Financial Officer concluded that Oxus’ disclosure controls and procedures were not effective

at the reasonable assurance level.

Management’s annual report on internal

control over financial reporting

As required by SEC rules and regulations implementing

Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial

reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Oxus’ internal control over financial reporting

was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements

for external reporting purposes in accordance with GAAP.

Oxus’ internal control over financial reporting includes those policies

and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions

and dispositions of the assets of our company,

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial

statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our

management and directors, and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use

or disposition of our assets that could have a material effect on the financial statements.

Our management conducted an assessment of the

effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations

of the Treadway Commission (COSO) in “Internal Control — Integrated Framework (2013).” Based on this assessment, our

management concluded that our internal control over financial reporting was not effective as of December 31, 2023, due to its accounting

for complex financial instruments and the Company has not evidenced review of the Oxus’ financial statements, which includes

the review of journal entries, balance sheet reconciliations, prepaid expenses, as well as the chief executive officer having administrative

access to the Oxus financial reporting system.

Attestation report of the registered public

accounting firm

This Annual Report does not include an attestation

report of our independent registered public accounting firm due to an exemption established by the JOBS Act for “emerging growth

Changes in internal control over financial

There were no changes in our internal control

over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2023

that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated, as of the end of the period covered by this Annual Report, the effectiveness of Oxus’ disclosure

controls and procedures (as defined in Rules 13a-15e and 15d-15e under the Exchange Act).

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that Oxus’ disclosure controls and procedures were not effective at the reasonable assurance level.

Management’s annual report on internal control over financial reporting

As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Borealis Foods’ internal control over financial reporting was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP.

Borealis Foods’ internal control over financial reporting includes those policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company,

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“ COSO ”) in “Internal Control — Integrated Framework (2013).” Based on this assessment, our management concluded that our internal control over financial reporting is effective and provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.

Attestation report of the registered public accounting firm

This Annual Report does not include an attestation report of our independent registered public accounting firm due to an exemption established by the JOBS Act for “emerging growth companies.”

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

2 unchanged sentences

Directors, Executive Officers, and Corporate Governance.

Directors and Executive Officers

The following table sets forth, as of March 22,

2024, the name, age, and position of each of our executive officers and directors.

Position/Title

Executive Officers:

Reza Soltanzadeh

Director and Chief Executive Officer

Pouneh Rahimi

Chief Legal Officer

Stephen Wegrzyn

Chief Financial Officer

Chief Strategy Officer

Chief Marketing Officer

Ertharin Cousin

Barthelemy Helg

Non-executive Chairman and Director

Shukhrat Ibragimov

Kanat Mynzhanov (1)(2)(3)

Steven Oyer (1)(2)(3)

Shiv Vikram Khemka (1)(2)(3)

Member of the audit committee

Member of the compensation committee

Member of the nominating and corporate governance committee

Reza Soltanzadeh , M.D.

is a co-founder

and has served as our Chief Executive Officer and a member of our board of directors since July 2019.

Prior to our founding, Dr.

served as the Chief Executive Officer of IIIC Investment Group, an emerging markets multibillion-dollar food-focused buyout firm, from

February 2003 to May 2016.

Soltanzadeh has continued to serve as a founder and partner of Z Ventures, Inc., an early-stage green technology

investment company, since its founding in March 2008.

Soltanzadeh obtained his M.D.

from the University of Manipal, India.

is qualified to serve on our Board due to his business and technical expertise, along with his strategic insight into our business as

our current Chief Executive Officer.

Barthelemy Helg is a co-founder

and has served as the Chairman of our board of directors since July 2019.

Helg has served as Chairman of Dara Capital AG, a FINRA

and SEC registered investment advisory and wealth management company since March 2015.

Helg currently serves as a Director of AB2

Bio Ltd, a biotech company he co-founded focused on treatment of rare autoimmune diseases since July 2010.

Helg served as Managing

Partner of Lombard Odier & Co, where he was a member of the Finance Risk and Credit committees, from April 2000 to December 2006.

Prior to that, he was Vice President for Mergers and Acquisitions of Nestle S.A.

from January 1998 to March 2000.

Helg began his carrier

as an investment banker at Goldman Sachs.

Helg obtained his M.L.

from the University of Geneva, Switzerland, his L.L.M.

from New York

University and an MBA from Harvard Business School.

He is also admitted to the New York Bar.

Helg is qualified to serve on our Board

due to his extensive experience working with entrepreneurial companies and his experience in the food industry.

Pouneh Rahimi has served as our

Chief Legal Officer since July 2019.

Rahimi also serves as legal counsel at Rahimi Law Office, a position she has held since September

In this role, Ms.

Rahimi serves as part-time general counsel to select technology companies, addressing their day-to-day legal matters

arising in connection with ongoing operations including negotiation of strategic contracts and technology licensing.

Rahimi has over

25 years of experience working with companies in the high-tech industry both as a lawyer and trusted business advisor.

practice has focused on general corporate and business matters including corporate governance and compliance, intellectual property development

and licensing, trademarks (in the U.S.

and Canada), and private debt and equity financing.

Earlier in her career, Ms.

Rahimi served as

a general counsel to MRO Software, Inc.

formally a publicly traded company on Nasdaq, as well as a corporate associate at Nixon Peabody

Rahimi obtained her J.D.

from the New England School of Law and her B.A.

from McGill University.

Rahimi is licensed to practice

law in New York, Massachusetts, and Ontario.

Steve Wegrzyn has served as our

Chief Financial Officer since July 2020.

Prior to joining us, Mr.

Wegrzyn served as the Interim Chief Financial Officer and Integration

Specialist for Shed Financial Services, a financial services company, from January 2019 to July 2020.

Prior to Shed Financial Services,

Wegrzyn served as Chief Financial Officer for Diesel Laptops, an automotive software company, from January 2018 to November 2018.

Wegrzyn held several interim CFO consulting positions from January 2015 to March 2018 in various industries including computer manufacturing,

chemical manufacturing, waste transportation, trucking, and food manufacturing.

Wegrzyn began his career as an accountant at Ernst

Wegrzyn obtained his B.S.

in Accounting and Finance from the Darla Moore School of Business of the University of South

Matt Talle has served as Chief Strategy

Officer of Palmetto Food Group (a subsidiary of ours) since January 2020.

Prior to joining Palmetto Food Group, Mr.

Talle held multiple

leadership roles with increasing responsibility at Nissin Foods U.S.

where he worked for 30 years.

During his tenure at Nissin Foods,

Talle served as Vice President of Business Development from June 2015 to December 2019, as Executive Vice President, Board of Director

from March 2010 to June 2015, and from March 2008 to June 2010, Mr.

Talle served as of Vice President of sales and Marketing.

obtained his B.S., Ag-Business from California Polytechnic University.

Henry Wong has served as Chief Marketing

Officer of Palmetto Food Group (a subsidiary of ours) since 2021.

Wong has also served as President and Creative Strategist of Vyoo

Brand + Content, a branding and marketing agency, since September 2016.

His past experience also includes being Sr.

VP of Global Ad Agency

Saatchi & Saatchi as well as marketing for such food brands as Maple Leaf Foods, P&G, and Hormel Foods.

Wong holds bachelor

degrees from Toronto Metropolitan University and the University of Toronto in Media Studies and Film.

Ertharin Cousin became a director

of ours on February 7, 2024 pursuant to the terms of the Plan of Arrangement.

Since September 2019, Ms.

Cousin has served as Founder,

President and Chief Executive Officer of Food Systems For The Future Institute, a non-profit organization to catalyze, enable and scale

market-driven agtech, foodtech, and food innovations, and also as Visiting Scholar, Spogli Institute for the Study of International Relations,

Center for Food and Environment at Stanford University.

She has served as Distinguished Fellow of The Chicago Council on Global Affairs,

a global affairs think tank, since June 2017.

Cousin previously served at Stanford University as Payne Distinguished Lecturer and

Visiting Fellow, Spogli Institute for the Study of International Relations, Center for Food and Environment from September 2017 to June

From April 2012 to April 2017, Ms.

Cousin served as Executive Director of the United Nations World Food Programme, the food-assistance

branch of the United Nations, and she served as Ambassador and Permanent Representative to the United Nations Food and Agriculture Agencies

on behalf of the U.S.

Department of State from August 2009 to April 2012.

Cousin previously served in a variety of executive roles

between 1987 and 2009, including Founding President and Chief Executive Officer of The Polk Street Group, a management services company;

Executive Vice President and Chief Operating Officer of America’s Second Harvest;

Senior Vice President, Public Affairs for Albertsons

White House Liaison and Special Advisor to the Secretary for the 2016 Olympics for the U.S.

Department of State;

and Assistant

Attorney General for The State of Illinois.

Cousin currently serves a member of the Supervisory Board of Bayer AG and the Board of

Directors of Mondelez International, Inc.

Cousin earned a B.A.

at the University of Illinois at Chicago and received her J.D.

the University of Georgia School of Law.

Shukhrat Ibragimov became a director

of ours on February 7, 2024 pursuant to the terms of the Plan of Arrangement.

Ibragimov serves as member of the Board of Directors

of Eurasian Resources Group (ERG), a leading natural resources (ferrochrome, iron, aluminum) company with the integrated mining, processing,

energy, logistics and marketing operations based mainly in Kazakhstan and operating globally (extraction and processing of metals), since

Prior to his appointment to the Board of Directors of ERG, Mr.

Ibragimov served as ERG’s Head of Business Development

Ibragimov currently also serves as member of the Boards of Directors of Eurasia Insurance Company JSC, Eurasian Financial

Company JSC, Eurasian Bank JSC.

Ibragimov founded Eurasian Space Ventures LLP (ESV) based in Kazakhstan, venture fund investing

in startups in aerospace industry.

Through ESV, Mr.

Ibragimov controls BITEEU, a cryptocurrency exchange operating globally.

also is a co-founder of SPRK Music, a music platform that helps musicians to be discovered via a dedicated platform.

Ibragimov graduated

from the European Business School London with bachelor degree and the Beijing Language and Culture University with masters’ degree.

Kanat Mynzhanov became a director

of ours on February 7, 2024 pursuant to the terms of the Plan of Arrangement.

Mynzhanov has served as Oxus’ Chief Executive

Officer and director since Oxus’ inception in February 2021.

Mynzhanov led and co-founded a hedge fund, Bellprescot Prime Fund,

and asset management firm Bellprescot Asset Management in September 2016.

He served as the director of the investment advisory firm, Bellprescot

from September 2016 until April 2021.

He served as the chief investment officer of Bellprescot Asset Management from September 2016

to June 2020.

The hedge fund’s primary focus of investments was technology driven public companies with leading and disruptive products

and service, including internet of things and cloud, autonomous driving, artificial intelligence, machine learning, semiconductors, cybersecurity

and robotics.

Since 2018, Mr.

Mynzhanov advised on several private equities deals in fintech (payments, remittances and alternative financing),

mobility (including EV battery metals and EV battery technology) and structured products, including tokenization and syndicated co-lending.

Prior to founding the hedge fund, Mr.

Mynzhanov served as the head of investments at Kazatomprom-Damu, an investment subsidiary of NAC

Kazatomprom JSC, where he led and mentored a team of highly skilled investment managers responsible for mergers and acquisitions, joint

ventures and business development across metals & mining, rare metals and alternative energy industries.

Mynzhanov joined NAC

Kazatomprom JSC in 2014 as an investment manager and during his time, he oversaw numerous projects and established strong connections

with some of the largest global firms in the industry.

From March 2011 to March 2014, Mr.

Mynzhanov consulted and led the business development

of a tungsten concentrate producer in CIS region.

From November 2008 to March 2011, Mr.

Mynzhanov led and participated in operational,

commercial and investment management of oil tankers firm in London.

Over the years, Mr.

Mynzhanov consulted for various firms, including

those in the metals and mining sector, on raising capital through initial public offerings, as well as restructuring and various business

developments.

Mynzhanov holds a Master of Science from University of Westminster.

Steven Oyer became a director of

ours on February 7, 2024 pursuant to the terms of the Plan of Arrangement.

Oyer is a seasoned finance executive with over 40 years

of business and investment experience.

Since January 2023, Mr.

Oyer served as the Managing Partner of Sustainable Finance Partnerships

(SFP) where he advises companies in capital transactions and business development.

Prior to that, Mr.

Oyer served as Chief Executive Officer

of i(x) Net Zero, a publicly traded holding company focused on energy transition and sustainability.

From September 2015 to February 2018,

Oyer served as Senior Vice President at Lazard Asset Management where he led their Global Family Office Advisory Group.

experience includes a senior position at the Private Funds Group of Brookfield Asset Management focused on Real Assets and Renewable Investments.

Additionally, Mr.

Oyer served as interim Chief Executive Officer and led the restructuring of Saflink Corporation, a NASDAQ listed biometric

software company.

Oyer served as a board member and audit chair of Salton, Inc., a designer, marketer, manufacturer, and distributor

of a broad range of branded small appliances.

Oyer was the founder of Quake Capital, an accelerator that fosters early-stage ventures

led by student and faculty entrepreneurs from university ecosystems and still serves in an advisory capacity.

Oyer is currently a

board member of The Truth Initiative, a nonprofit public health organization committed to tobacco use prevention and nicotine addiction.

He also has served as a member of the investment committee for the Florida Atlantic University’s Foundation.

Oyer attended the

University of Massachusetts.

Shiv Vikram Khemka became a director

of ours on February 7, 2024 pursuant to the terms of the Plan of Arrangement.

Khemka has served as one of Oxus’ independent

directors commencing since September 2021.

Khemka is a vice-chairman of SUN Group, a 120-year-old family enterprise comprised of both

operating and investment companies.

He has served as a vice-chairman of SUN Group since 1990.

SUN Group is active in asset management,

natural resources, green infrastructure and high technology.

SUN has partnered to establish SUN Mobility, an energy tech company focused

on becoming a leader in EV energy.

SUN is also a significant investor in a leading EV solid state battery manufacturer.

The group has

been active in various regions around the world, including India, the Middle East, Central and South-East Asia.

Khemka is the chairman

of the Entrepreneurship Sports Generation, also executive chairman of the Global Education and Leadership Foundation.

He is currently

a member of the board of governors at Junior Achievement Worldwide and is a member of the Leadership Council at the Brooking Centre for

Universal Education.

The World Economic Forum elected Mr.

Khemka a “Global Leader for Tomorrow” and he was also a member of

the organization’s Global Agenda Council on Education.

He has served on both the Brown University and Yale University’s President’s

Khemka has also served as a board member on the Stanford Philanthropy and Civic Society (PACS) centre.

He is currently a

founding member of V20, a global community of values experts and practitioners that engage with G20, and is the chairman of Aikido Aikikai

Foundation of India.

He was awarded the Dr.

Jean Mayer Global Citizenship Award from Tufts University, the Outstanding Contribution to

Education Prize and the India Alumni Award from the Wharton School of Business.

Khemka studied at Eton College, earned a BA in economics

from Brown (1985), an MBA/MA with distinction from the Wharton School of Business and the Lauder Institute at the University of Pennsylvania

Corporate Governance

Audit Committee

We have a separately designated standing audit

committee that consists of Shiv Vikram Khemka, Kanat Mynzhanov, and Steven Oyer, with Mr.

Oyer serving as our Chairman.

All members of

our audit committee meet the requirements for financial literacy under the applicable Nasdaq rules and regulations.

Our board has determined

that each member of our audit committee qualifies as “independent” under Nasdaq’s additional standards applicable to

audit committee members and Rule 10A-3 of the Exchange Act applicable to audit committee members.

In addition, our Board has determined

that Steven Oyer qualifies as an “audit committee financial expert,” as defined in applicable SEC rules and has accounting

or related financial management expertise.

Code of Business Conduct and Ethics

We have a Code of Business Conduct and Ethics

that applies to all of our executive officers, directors and employees, including our principal executive officer, principal financial

officer, principal accounting officer or controller or persons performing similar functions.

The Code of Business Conduct and Ethics is

available on our website, www.investors.borealisfoods.com/overview/default.aspx, under the “Governance” section.

We intend to make any legally required disclosures

regarding amendments to, or waivers of, provisions of our Code of Business Conduct and Ethics on our website rather than by filing a Current

Report on Form 8-K.

Compensation Committee Interlocks and Insider

Participation

During 2023, our compensation committee was comprised

of former directors of Oxus.

No member of the compensation committee was at any time during fiscal year 2023, or at any other time, one

of our officers or employees.

None of our executive officers has served as a director or member of a compensation committee (or other

committee serving an equivalent function) of any entity, one of whose executive officers served as a director of our Board or member of

our compensation committee.

We have adopted a Code of Conduct and Ethics that applies to all officers, directors and employees.

The Code of Conduct and Ethics codifies the business and ethical principles that govern all aspects of our business, reflecting our commitment to this culture of honesty, integrity and accountability.

In addition to following the Code of Conduct and Ethics, officers, directors and employees are expected to seek guidance in situations where there is a question regarding compliance issues, whether with the letter or the spirit of our policies and applicable laws.

Borealis Foods’ Code of Conduct and Ethics applies to all of the executive officers, directors and employees of Borealis Foods and its subsidiaries.

We will provide, without charge, upon request, copies of the Code of Ethics.

Our Code of Conduct and Ethics is available on our website.

Borealis Foods’ website and the information contained on, or that can be accessed through, such website is not deemed to be incorporated by reference in, and are not considered part of, this Annual Report.

We have adopted an Insider Trading Policy that governs the purchase, sale, and/or other transactions of our securities by our directors, officers, and employees, and the Company itself.

We believe that the

Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the listing standards of Nasdaq.

The foregoing summary of the Company’s Insider Trading Policy does not purport to be complete and is qualified in its entirety by reference to the full text thereof filed herewith as Exhibit 19.1.

The additional information required by this Item 10 will either be (i) included in an amendment to this Annual Report on Form 10-K, or (ii) incorporated by reference from our definitive proxy statement to be filed not later than 120 days after the end of our 2024 fiscal year.

Executive Compensation.

Executive and Director Compensation of Oxus

Prior to the Consummation of the Transaction

As of December 31, 2023, Oxus had two executive

officers, Kanat Mynzhanov (Chief Executive Officer and Director) and Askar Mametov (Chief Financial Officer).

Upon the consummation of

the Transaction, and in accordance with the terms of the Business Combination Agreement, each of the Oxus executive officers ceased serving

in such capacities.

Executive and Director Compensation of Borealis

This section discusses the material components

of the executive compensation program for our executive officers who are named in the “Summary Compensation Table” below.

In 2023, our “named executive officers” and their positions were as follows:

● Reza Soltanzadeh, Director and Chief Executive Officer;

● Pouneh Rahimi, Chief Legal Officer;

● Stephen Wegrzyn, Chief Financial Officer;

● Henry Wong, Chief Marketing Officer;

● Matt Talle, Chief Strategy Officer.

This discussion may contain forward-looking statements

that are based on our current plans, considerations, expectations, and determinations regarding future compensation programs.

Summary Compensation Table

The following table sets forth information concerning

the compensation of our names executive officers for the years ended December 31, 2023 and December 31, 2022.

Principal Position

Reza Soltanzadeh

President and Chief Executive Officer (1)

Chief Strategy Officer

Steve Wegrzyn

Chief Financial Officer (2)

Soltanzadeh did not receive any compensation for his service

rendered to us in 2022 or 2023.

Wegrzyn was awarded 300,000 shares with an option exercise price of $0.60.

Narrative Disclosure to the Summary Compensation

Certain of the compensation paid to our named

executive officers (“ NEOs ”) reflected in the Summary Compensation Table was provided pursuant to plans and programs

which are summarized below.

Soltanzadeh, Mr.

Talle, and Mr.

Wegrzyn were not party to an employment agreement during 2023 or 2022.

For a discussion of benefits, please see below.

Elements of Compensation

In 2023, our compensation program consisted primarily

of the following elements:

base salary, long-term incentives, and benefit and perquisite programs.

2023 Base Salary

Historically, we have provided base salary as

a fixed source of compensation for our executive officers.

Base salaries for NEOs are established based on the scope of their responsibilities,

competencies, and their prior relevant experience, taking into account compensation paid in the market for similar positions and the market

demand for such NEO’s total compensation package.

Base salaries are reviewed annually and increased for merit reasons based on the

executive’s success in meeting or exceeding individual objectives.

Additionally, base salaries can be adjusted as warranted throughout

the year to reflect promotions or other changes in the scope of breadth of an executive’s role or responsibilities, as well as to

maintain market competitiveness.

Long Term Equity Compensation Plans

The Incentive Plan was previously approved by

Oxus’ and Borealis’ board of directors and shareholders on February 2, 2024, and subsequently approved and ratified by our

Board upon the Closing of the Transaction.

The Incentive Plan became effective immediately upon the consummation of the Transaction.

Incentive Plan initially makes available a maximum number of 1,125,869 Common Shares.

The aggregate number of Common Shares that is (i)

issued to an officer, director, 10% stockholder and anyone who possesses material non-public information because of his or her relationship

with the company or with an officer, director or principal stockholder of the company (“ Insiders ”) under the Incentive

Plan or any other proposed or established share compensation arrangement within any one-year period will not exceed 10% of the total issued

and outstanding Common Shares subject to the Incentive Plan from time to time and (ii) issuable to a non-employee director under the Incentive

Plan during any of our fiscal years may not have a “fair value” as of the date of grant, as determined in accordance with

ASC Topic 718 (or any other applicable accounting guidance), that exceeds $300,000 in the aggregate.

Health and Welfare Plans

Our named executive officers are eligible to participate

in the employee benefit plans that we offer to our employees generally, including medical, life and accidental death and dismemberment,

and short- and long-term disability benefits in Canada and the United States, and basic and extended health care, dental, counseling services,

disability, life and accidental death and dismemberment insurance and survivor benefits in Canada.

Clawback Policy

We have adopted a compensation recovery policy

(the Company’s Clawback Policy), which was effective March 27,2024, that is compliant with the Nasdaq Listing Rules, as required

by the Dodd-Frank Act.

Outstanding Equity Awards at Fiscal Year End

The following table summarizes the outstanding

equity awards held by each of our named executive officers as of December 31, 2023, which were granted under our Stock Plan.

in the following table have not been adjusted to reflect any adjustment in contemplation of the Transaction.

Option Awards

Unexercisable

Matt Talle, Chief Strategy Officer (1)(2)

1,225,000 (5)

January 10, 2033

Steve Wegrzyn, Chief Financial Officer (3)(4)

January 10, 2032

Talle’s stock options are subject to a five-year vesting schedule, with 100% of the options

vesting on January 10, 2027, subject to Mr.

Talle’s continuous service through each vesting date.

(2) In the event of a change of control event, the optioned shares will automatically vest in full, immediately

prior to the occurrence of the change of control event.

Wegrzyn’s stock options are subject to a five-year vesting schedule, with 100% of the options

vesting on January 10, 2027, subject to Mr.

Wegrzyn’s continuous service through each vesting date.

(4) In the event of a change of control event, the optioned shares will automatically vest in full, immediately

prior to the occurrence of the change of control event.

(5) The equity award was granted in 2022.

Director Compensation

No non-employee directors received any cash or equity compensation

for services rendered to us during the year ended December 31, 2023.

Option Awards

Barthelemy Helg (1)

Helg was not compensated for his services rendered to us in 2023.

We determine the annual compensation to be paid to the members of our

Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.

The following table sets forth beneficial ownership

of our common stock as of March 22, 2024 by:

● each person who is the beneficial owner of more than 5% of the issued and outstanding Common Shares;

● each of our named executive officers and directors.

Beneficial ownership is determined according to

the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she, or it possesses sole or

shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within

60 days of March 22, 2024.

Our beneficial ownership is based on 21,378,890

Common Shares issued and outstanding as of March 22, 2024.

Unless otherwise indicated, we believe that all

persons named in the table below have sole voting and investment power with respect to all Common Shares beneficially owned by them.

our knowledge, no Common Shares beneficially owned by any executive officer or director have been pledged as security.

The following table illustrates varying beneficial

ownership levels in Borealis Foods with the percentage of outstanding shares based on Common Shares as of March 22, 2024:

Name and Address of Beneficial Owner

Directors and Named Executive Officers of New Borealis (1)

Reza Soltanzadeh (2)

Barthelemy Helg (3)

Stephen Wegrzyn (4)

Pouneh Rahimi (5)

Matt Talle (6)

Henry Wong (7)

Kanat Mynzhanov (8)

Shiv Vikram Khemka (9)

Shukhrat Ibragimov (10)

Steven Oyer (11)

Ertharin Cousin

All directors and executive officers as a group (11 individuals)

Five or more Percent Holders

Reza Soltanzadeh (2)

Oxus Capital Pte.

Barthelemy Helg (3)

* Less than 1%.

(1) Unless otherwise noted, the business address of each of the following entities or individuals is c/o Borealis Foods Inc.

1540 Cornwall

Road, Suite 104, Oakville, Ontario L6J 7W5.

(2) Consists of (i) 3,532,505 Common Shares held by Zagros Alpine Capital ULC and (ii) 127,947 Common Shares

held by Z Ventures Inc.

Reza Soltanzadeh is the President of Zagros Alpine Capital ULC and Z Ventures Inc.

and has sole voting and dispositive

control over the shares held by Zagros Alpine Capital ULC and Z Ventures Inc.

(3) Consists of 3,205,556 Common Shares.

(4) Consists of 33,046 Common Shares.

(5) Consists of 192,368 Common Shares held by Zagros Alpine Capital ULC.

Rahimi does not have voting or

dispositive control over the shares held by Zagros Alpine Capital ULC.

(6) Consists of (i) 80,962 Common Shares and (ii) 133,703 Common Shares held by Zagros Alpine Capital ULC.

Talle does not have voting or dispositive control over the shares held by Zagros Alpine Capital ULC.

(7) Consists of 14,334 Common Shares.

(8) Consists of 200,000 Common Shares.

(9) Consists of 50,000 Common Shares.

(10) Consists of (i) 2,848,955 Common Shares held by Belphar Ltd.

and (ii) 375,925 Common Shares held by GSS

Overseas LTD.

Ibragimov is the sole shareholder of Belphar Ltd.

and GSS Overseas LTD.

and has sole voting and dispositive control

over the shares of Belphar Ltd.

and GSS Overseas LTD.

(11) Consists of 2,000 Common Shares.

(12) Consists of 5,352,477 Common Shares.

Kenges Rakishev is the controlling shareholder.

(13) Consists of 2,848,955 Common Shares.

Ibragimov is the controlling shareholder.

The information required by this Item will be included in the 2025 Proxy Statement and is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by this Item 12 will either be (i) included in an amendment to this Annual Report on Form 10-K, or (ii) incorporated by reference from our definitive proxy statement for the 2025 annual meeting of stockholders, in either case to be filed not later than 120 days after the end of our 2024 fiscal year.

Certain Relationships and Related Transactions, and Director Independence.

Legacy Borealis Pre-Business Combination Arrangements

Our Relationship with Zagros

On November 29, 2022, Reza Soltanzadeh, on behalf

of Zagros Ventures, Inc.

(“ Zagros ”) entered into a Postponement of Shareholder Loans Agreement, by and between Borealis

and Zagros Ventures Inc., pursuant to which in consideration of Oxus making the Oxus Loan or any part thereof to Borealis and in consideration

of the premises, Zagros agreed that any claim of Oxus in respect of the Oxus Loans will take precedence over and be fully paid in priority

to the loan made by Zagros and repayment be postponed in favor of Oxus, including any right, title and interest in any security in respect

of such loans made by Zagros to Borealis.

Our Relationship with Barthelemy Helg

On November 29, 2022, Barthelemy Helg entered

into a Postponement of Shareholder Loans Agreement, by and between Borealis and Mr.

Helg, pursuant to which in consideration of Oxus making

the Oxus Loan or any part thereof to Borealis and in consideration of the premises, Mr.

Helg agreed that any claim of Oxus in respect

of the Oxus Loans will take precedence over and be fully paid in priority to the loan made by Mr.

Helg and repayment be postponed in favor

of Oxus, including any right, title and interest in any security in respect of such loans made by Mr.

Helg to Borealis.

On December 31, 2019, Borealis issued two demand

promissory notes to Barthelemy Helg, pursuant to which Borealis borrowed an aggregate principal amount of $1.2 million.

On December 31,

2020, Borealis issued two demand promissory notes to Barthelemy Helg, pursuant to which Borealis borrowed an aggregate principal amount

of $3.0 million.

On February 2, March 18, March 31, June 8, June 23, and December 1, 2022, Borealis issued demand promissory notes to

Barthelemy Helg, pursuant to which Borealis borrowed a principal amount of $1.5 million, $1.0 million, $937,167, $500,000, $350,000, and

$36,625, respectively.

The principal amount of each such loan bears interest at the annual rate of 10%.

Our Relationship with the Sponsor

On October 21, 2022, Borealis and the Sponsor

executed a note purchase agreement in the amount of $2,500,000 at 10% per annum interest (“ Initial Sponsor Note ”).

On November 14, 2022, Borealis and the Sponsor executed a second note purchase agreement in the amount of $17,500,000 at 10% per annum

interest (“ Second Sponsor Note , and collectively with the Initial Sponsor Note, “ Sponsor Convertible Notes ”).

The conversion of both notes into Borealis Shares was to be at a $120,000,000 valuation divided by the fully diluted number of outstanding

shares and discounted by five percent (5%).

Our Relationship with Belphar Ltd.

and Frontwell

Capital Partners Inc.

On August 10, 2023, Borealis, Belphar Ltd.

Frontwell Capital Partners Inc.

entered into a Subordination and Intercreditor Agreement granting Belphar Ltd.

a security interest and

lien upon all or substantially all of Borealis’ assets as security for the repayment of the Note Purchase Agreement, dated February

The Note Purchase Agreement granted that convertible notes with an aggregate principal amount of up to $20,000,000.00 may be

issued to Borealis executed by PGF in favor of Belphar Ltd.

Shareholder Support Agreements

Concurrently with the execution of the Business

Combination Agreement, Legacy Borealis entered into Shareholder Support Agreements with Oxus and certain Legacy Borealis shareholders.

Pursuant to the Shareholder Support Agreements, among other things, such Legacy Borealis shareholders agreed to vote their Legacy Borealis

Common Shares in favor of the Transaction and not to sell or transfer their Legacy Borealis Common Shares.

The Shareholder Support Agreements are described

in the Proxy Statement/Prospectus in the sections entitled “ Certain Agreements Related to the Business Combination – Shareholder

Support Agreements ” beginning on pages 5 and 121, respectively, of the Proxy Statement/Prospectus.

The foregoing description of the Shareholder Support

Agreements does not purport to be complete and is qualified in its entirety by the full text of the form of the Shareholder Support Agreements,

which is incorporated herein by reference.

Sponsor Support Agreement

Concurrently with the execution of the Business

Combination Agreement, Legacy Borealis entered into a Sponsor Support Agreement with Oxus and the Sponsor, pursuant to which, among other

things, the Sponsor agreed to (A) vote its Founder Shares in favor of the Transaction and the Oxus Proposals, (B) not redeem its Founder

Shares, (C) waive certain of its anti-dilution rights, (D) convert the Sponsor Convertible Notes, and (E) forfeit certain Sponsor Founder

Shares as a part of incentive equity compensation for directors, officers and employees of Legacy Borealis.

The Sponsor Support Agreement is described in

the Proxy Statement/Prospectus in the section titled “ Certain Agreements Related to the Business Combination Agreement –

Sponsor Support Agreement ” beginning on pages 5 and 121, respectively, of the Proxy Statement/Prospectus.

The foregoing description of the Sponsor Support

Agreement does not purport to be complete and is qualified in its entirety by the full text of the Sponsor Support Agreement, which is

incorporated herein by reference.

Policies and Procedures for Related Person

Our Board has adopted a written Related Person

Transaction Policy, setting forth the policies and procedures for the review and approval or ratification of related person transactions.

Under the policy, our Audit Committee shall review

the material facts of all related party transactions and shall approve or disapprove of the entry into the related party transaction.

In the event that advance Audit Committee review of a related party transaction is not feasible or has otherwise not been obtained, then

the related party transaction shall be reviewed subsequently by the Audit Committee (and such transaction may be ratified subsequently

by the Audit Committee).

The Audit Committee may also disapprove of a previously entered into related party transaction and may require

that our management team take all reasonable efforts to terminate, unwind, cancel or annul the related party transaction.

In connection

with its review of a related party transaction, the Audit Committee will take into account, among other factors it deems appropriate,

whether the related party transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under

the same or similar circumstances and the extent of the Related Party’s interest in the related party transaction.

Director Independence

The information contained under the heading “Director

Independence” in Part III, Item 10.

“Directors, Executive Officers and Corporate Governance” is incorporated by reference

The information required by this Item 13 will either be (i) included in an amendment to this Annual Report on Form 10-K, or (ii) incorporated herein by reference from our definitive proxy statement for the 2025 annual meeting of stockholders, in either case to be filed not later than 120 days after the end of our 2024 fiscal year.

Principal Accountant Fees and Services.

The following table summarizes the fees of Marcum

LLP, Oxus’ independent registered public accounting firm prior to the consummation of the Transaction, billed to us in each of the

last two fiscal years for audit services and billed to us in each of the last two fiscal years for other services:

(in thousands)

Audit Fees (1)

Audit-Related Fees (2)

All Other Fees(4)

Audit fees consist of fees billed for

professional services rendered for the audit of our year-end financial statements and services that are normally provided by Marcum

in connection with regulatory filings.

Audit-Related Fees.

Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance

of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest

services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.

Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice.

All Other Fees.

All other fees consist of fees billed for all other services.

Audit Committee Pre-Approval Policy and Procedures

Oxus’ audit committee was formed in connection

with the effectiveness of our registration statement for its initial public offering.

As a result, the audit committee did not pre-approve all

of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by the Oxus Board.

Since the formation of its audit committee, and on a going-forward basis, the audit committee has and will pre-approve all audit

services and permitted non-audit services to be performed for it by its auditors, including the fees and terms thereof (subject to

the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit

committee prior to the completion of the audit).

The information required by this Item 14 will either be (i)included in the 2024 Proxy Statement, and is an amendment to this Annual Report on Form 10-K, or (ii) incorporated herein by reference from our definitive proxy statement for the 2025 annual meeting of stockholders, in either case to be filed not later than 120 days after the end of our 2024 fiscal year.

Exhibits and Financial Statement Schedules

(a)(1) Financial Statements.

The following documents are included on pages F-1 through F-27 attached

hereto and are filed as part of this Annual Report on Form 10-K.

Index to Financial Statement

Report of Independent Registered Public Accounting Firm

Financial Statements

Balance Sheet

Statements of Operations

Statements of Changes in Shareholders’ Deficit

Statements of Cash Flows

Notes to Financial Statements

The following documents are included on pages 44 through 51 attached hereto and are filed as part of this Annual Report on Form 10-K.

(a)(2) Financial Statement Schedules.

All financial statement schedules have been omitted because they are

not applicable, not required or the information required is shown in the financial statements or the notes thereto.

All financial statement schedules have been omitted because they are not applicable, not required or the information required is shown in the financial statements or the notes thereto.

(a)(3) Exhibits.

The following is a list of exhibits filed, furnished, or incorporated

by reference as part of this Annual Report on Form 10-K.

The following is a list of exhibits filed, furnished, or incorporated by reference as part of this Annual Report on Form 10-K.

Exhibit Number Description

Business Combination Agreement, dated as of February 23, 2023, by and among Oxus Acquisition Corp., 1000397116 Ontario Inc., and Borealis Foods Inc.

9 unchanged sentences

3.2* Form of Borealis Articles of Continuance (incorporated by reference to Exhibit 10.8 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023).

4.1 Description of Registrant’s Securities

Form of Shareholder Support Agreement, dated as of February 23, 2023, by and among Oxus Acquisition Corp.

and certain shareholders of Borealis Foods Inc.

(incorporated by reference to Exhibit 10.4 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023).

(incorporated by reference to Exhibit 10.

10 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023).

Sponsor Support Agreement, dated as of February 23, 2023, by and among Oxus Acquisition Corp., Oxus Capital Pte.

17 unchanged sentences

(incorporated by reference to Exhibit 10.42 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on January 5, 2024).

Form of Equity Incentive Plan (incorporated by reference on Exhibit 10.4 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023).

10.11* Borealis Foods, Inc.

Form of Equity Incentive Plan (incorporated herein by reference to Exhibit 3.4 of Borealis Foods Inc.’s Quarterly Report on Form 10-Q, filed with the SEC on May 21, 2024).

14.1* Borealis Foods Inc.

Code of Business Conduct and Ethics (incorporated herein by reference to Exhibit 14.1 to Borealis Foods Inc.’s Form 8-K, filed with the SEC on February 13, 2024).

14.2* Borealis Foods Inc.

Executive Compensation Recovery Policy (incorporated herein by reference to Exhibit 97.0 to Borealis Foods Inc.’s Annual Report on Form 10-K, filed with the SEC on April 15, 2024).

16.1* Letter from Marcum LLP to the SEC, dated February 13, 2024 (incorporated herein by reference to Exhibit 16.1 to Borealis Foods Inc.’s Form 8-K, filed with the SEC on February 13, 2024).

19.1 Borealis Foods Inc.

Insider Trading Policy

23.1 Consent of Independent Registered Public Accounting Firm

31.1 Certification of Principal Executive Officer Pursuant to Rules 13A-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

4 unchanged sentences

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Oxus Acquisition Corp.

Clawback Policy

Inline XBRL Instance Document.

Inline XBRL Taxonomy Extension Schema Document.

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

Inline XBRL Taxonomy Extension Definition Linkbase Document.

Inline XBRL Taxonomy Extension Label Linkbase Document.

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.INS* Inline XBRL Instance Document.

101.SCH* Inline XBRL Taxonomy Extension Schema Document.

101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

1 unchanged sentence

+ Annexes, schedules, and exhibits to this Exhibit omitted pursuant to Item 601(b)(2) of Regulation S-K.

The Registrant agrees to furnish

supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

Form 10-K Summary.

Pursuant to the requirements of Section 13 or

15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned,

thereunto duly authorized.

The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Borealis Foods Inc.

/s/ Reza Soltanzadeh

Chief Executive Officer

Pursuant to the requirements of the Securities

Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on

the dates indicated.

/s/ Reza Soltanzadeh

Chief Executive Officer and Director

April 15, 2024

Reza Soltanzadeh

(principal executive officer)

/s/ Stephen Wegrzyn

Chief Financial Officer

April 15, 2024

Stephen Wegrzyn

(principal financial officer)

/s/ Barthelemy Helg

April 15, 2024

Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name Title Date

/s/ Reza Soltanzadeh Chief Executive Officer and Director 4/15/2025

Reza Soltanzadeh (principal executive officer)

/s/ Stephen Wegrzyn Chief Financial Officer 4/15/2025

Stephen Wegrzyn (principal financial officer)

/s/ Barthelemy Helg Director 4/15/2025

Barthelemy Helg

/s/ Ertharin Cousin

April 15, 2024

/s/ Ertharin Cousin Director 4/15/2025

Ertharin Cousin

/s/ Shukhrat Ibragimov

April 15, 2024

/s/ Shukhrat Ibragimov Director 4/15/2025

Shukhrat Ibragimov

/s/ Kanat Mynzhanov

April 15, 2024

Kanat Mynzhanov

/s/ Steven Oyer

April 15, 2024

/s/ Shiv Vikram Khemka

April 15, 2024

/s/ Steven Oyer Director 4/15/2025

/s/ Shiv Vikram Khemka Director 4/15/2025

Shiv Vikram Khemka

BOREALIS FOODS INC.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2024

FINANCIAL INFORMATION

FINANCIAL INFORMATION Page

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Financial Statements

Balance Sheets as of December 31, 2023 and 2022 F-3

Statements of Operations for the Year Ended December 31, 2023 and 2022 F-4

Statements of Changes in Shareholders’ Deficit for the Year Ended December 31, 2023 and 2022 F-5

Statements of Cash Flows for the Year Ended December 31, 2023 and 2022 F-6

Notes to Financial Statements F-7

Report of Independent

Registered Public Accounting Firm

To the Shareholders and Board of Directors of

Borealis Foods Inc.

(formerly known as Oxus Acquisition Corp.)

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Operations for the Year s Ended December 31, 2024 and 2023

Consolidated Statements of Changes in Shareholders' Deficit for the Year s Ended December 31, 2024 and 202 3

Consolidated Statements of Cash Flows for the Year s Ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Borealis Foods Inc.

and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Borealis Foods Inc.

(formerly known as Oxus Acquisition Corp.) (the “ Company ”) as of December 31, 2023 and 2022, the related statements

of operations, changes in shareholders’ deficit and cash flows for the years ended December 31, 2023 and 2022, and the related notes

(collectively referred to as the “ financial statements ”).

In our opinion, the financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and

its cash flows for the years ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United

States of America.

Explanatory Paragraph – Going Concern

The accompanying financial statements have been prepared assuming that

the Company will continue as a going concern.

As described in Note 1 to the financial statements, the Company was a Special Purpose Acquisition

Corporation that was formed for the purpose of completing a merger, capital stock exchange, asset acquisition, stock purchase, reorganization

or similar business combination with one or more businesses or entities.

The Company entered into a definitive merger agreement with a

business combination target on February 23, 2023;

which was completed on February 7, 2024.

As also described in Note 1, uncertainties

related to the combined company such as historical performance and its estimated liquidity needs raise substantial doubt about the Company’s

ability to continue as a going concern.

The financial statements do not include any adjustments that may be necessary should the Company

be unable to continue as a going concern.

and Subsidiaries (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the substantial amount of debt coming due within the next 12 months and negative cash flow position along with other conditions as set forth in Note 1, raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting

firm registered with the Public Company Accounting Oversight Board (United States) (“ PCAOB ”) and are required to be

independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of

the Securities and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are

free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an

audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control

over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over

financial reporting.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum LLP

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Reverse Recapitalization Transaction

As described further in Note 1 to the consolidated financial statements, on February 7, 2024, Borealis Foods Inc.

(“Borealis”) consummated a merger transaction with Oxus Acquisition Corp.

The merger transaction was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States (“U.S.

GAAP”), in which Borealis was determined to be the accounting acquirer and Oxus the legal acquirer based upon the terms of merger transaction.

We identified the accounting for the reverse recapitalization as a critical audit matter because of the complexity in the determination of the proper treatment of the transaction in accordance with U.S.

GAAP, including judgments made by management to arrive at the proper conclusion.

This required a high degree of auditor judgment and increased level of effort when performing audit procedures.

Our audit procedures performed to address the critical matter included, among others:

• Review key documents of the transaction.

• Review Management’s analysis for the accounting treatment of the transaction and related impact.

• Review the Opening Balance Adjustments Workbook and accounting treatment and application of audit areas impacted.

• Verify mathematical accuracy of supporting schedules utilized for opening balance sheet adjustments.

• Ensure accounting treatment and application to impacted areas done in accordance with underlying agreements and US GAAP.

/s/ Berkowitz Pollack Brant, Advisors + CPAs

We have served as the Company’s auditor since 2022.

West Palm Beach, FL

April 15, 2025

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

BALANCE SHEETS

and Subsidiaries

Consolidated Balance Sheets

2024 December 31, 2023

Current Assets

Prepaid expenses, current

Total Current Assets

Marketable securities held in Trust Account

$ 179,449,742

LIABILITIES AND SHAREHOLDERS’ DEFICIT

Current Liabilities

Accrued expenses

Promissory note - related party

Related party payable

Total Current Liabilities

Commitments and Contingencies

Class A ordinary shares, par value $ 0.0001 ;

subject to possible redemption, 1,939,631 shares as of December 31, 2023 and 17,250,000 shares as of December 31, 2022, respectively, at redemption value

Shareholders’ Deficit

Preferred shares, $ 0.0001 par value;

5,000,000 shares authorized;

none issued or outstanding

Class A ordinary shares, $ 0.0001 par value;

500,000,000 shares authorized;

1,800,000 issued and outstanding as of December 31, 2023 and 300,000 issued and outstanding as of December 31, 2022 (excluding 1,939,631 shares subject to possible redemption as of December 31, 2023 and 17,250,000 shares subject to possible redemption as of December 31, 2022, respectively)

Class B ordinary shares, $ 0.0001 par value;

50,000,000 shares authorized;

2,812,500 shares issued and outstanding as of December 31, 2023 and 4,312,500 shares issued and outstanding as of December 31, 2022

Additional paid-in capital

Accumulated deficit

( 7,364,970 )

( 1,584,820 )

Total Shareholders’ Deficit

( 7,364,509 )

( 1,584,359 )

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT

$ 179,449,742

The accompanying notes are an integral

part of the financial statements.

BOREALIS FOODS INC.

(FORMERLY KNOWN AS OXUS ACQUISITION

STATEMENTS OF OPERATIONS

Operating expenses

Loss from operations

( 5,130,993 )

Cash $ 652,965 $ 7,615,630

Accounts receivable, net of allowance for credit losses of $ 247,653 as of December 31, 2024 and $ 224,433 as of December 31, 2023

1,965,748 1,775,756

Other income (expense):

Dividend income

Interest income

Foreign exchange (loss) / gain

Inventories, net

8,046,259 6,945,028

Prepaid expenses and other current assets

1,134,611 845,878

Basic and diluted weighted average redeemable Class A ordinary shares outstanding

Basic and diluted net loss per redeemable Class A ordinary share

Basic and diluted weighted average non-redeemable ordinary shares outstanding

Basic and diluted net loss per non-redeemable ordinary share

The accompanying notes are an integral

part of the financial statements.

BOREALIS FOODS INC.

(FORMERLY KNOWN AS OXUS ACQUISITION

STATEMENTS OF CHANGES IN SHAREHOLDERS’

For the Year Ended December 31, 2023

Ordinary Shares

Additional Paid-in

Total Shareholders’

Balance – January 1, 2023

Total current assets

11,799,583 17,182,292

Property, plant and equipment, net

45,736,326 46,408,540

Remeasurement of Class A ordinary shares to redemption amount

Intangible assets 319,307 —

Right - of-use asset, net 63,826 108,469

1,917,356 1,917,356

Other non-current assets

169,685 169,685

Conversion of Class B ordinary shares to Class A ordinary shares

$ 60,006,083 $ 65,786,342

Liabilities and Shareholders' (deficit)

Current liabilities:

Accounts payable and accrued expenses

$ 11,529,803 $ 10,887,730

Due to related parties 7,825,792 7,825,790

Convertible notes payable, current portion

Notes payable, current portion, net of capitalized loan costs

5,456,934 681,121

Balance – December 31, 2023

Operating lease payable, current portion 55,116 43,794

Finance leases payable, current portion

538,845 565,353

Total current liabilities 25,406,490 67,303,788

Due to related parties, net of current portion 7,601,661 —

Line of credit 7,600,000 —

Convertible notes payable, net of current portion 3,000,000 3,000,000

Notes payable, net of current portion

14,478,051 13,509,189

For the Year Ended December 31, 2022

Ordinary Shares

Additional Paid-in

Total Shareholders’

Balance – January 1, 2022

Operating lease payable, net of current portion 12,015 71,119

Finance leases payable, net of current portion

1,143,829 1,683,308

Remeasurement of Class A ordinary shares to redemption amount

Deferred tax liability

1,459,923 1,566,233

Total liabilities

60,701,969 87,133,637

Balance – December 31, 2022

Shareholders' (deficit)

Common shares, no par value

Additional paid-in capital

90,096,688 44,118,081

Accumulated deficit ( 90,792,574 ) ( 65,465,376 )

Total shareholders' (deficit) ( 695,886 ) ( 21,347,295 )

Total liabilities and shareholders' (deficit)

$ 60,006,083 $ 65,786,342

The accompanying notes are an integral part of

the financial statements.

See accompanying notes to the consolidated financial statements.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION

STATEMENTS OF CASH FLOWS

and Subsidiaries

Consolidated Statements of Operations

For the Years Ended

December 31, 2024 December 31, 2023

Gross sales $ 29,100,391 $ 31,377,045

Sales discounts & allowances ( 1,431,497 ) ( 1,392,077 )

Revenue, net 27,668,894 29,984,968

Cost of goods sold 23,155,766 27,352,032

Depreciation and amortization 2,323,617 3,936,655

Total cost of goods sold 25,479,383 31,288,687

Gross profit (loss) 2,189,511 ( 1,303,719 )

Total sales, general & administrative expenses 22,594,486 18,645,431

Loss from operations ( 20,404,975 ) ( 19,949,150 )

Other income (expense):

South Carolina grant revenue — 300,231

Loss on disposal of assets — ( 962,665 )

Gain on foreign exchange rates 3,554 72,889

Interest expense ( 5,060,678 ) ( 7,276,583 )

Total other expense ( 5,057,124 ) ( 7,866,128 )

Loss before income taxes ( 25,462,099 ) ( 27,815,278 )

Income tax benefit 134,901 336,031

Net loss $ ( 25,327,198 ) $ ( 27,479,247 )

Loss per share from net loss

Basic $ ( 1.25 ) $ ( 2.56 )

Diluted $ ( 1.25 ) $ ( 2.56 )

Weighted average shares outstanding

Basic 20,309,934 10,750,060

Diluted 20,309,934 10,750,060

See accompanying notes to the consolidated financial statements.

Borealis Foods Inc.

and Subsidiaries

Consolidated Statements of Changes in Stockholders' Deficit

Years Ended December 31, 2024 and 2023

Class A Common Stock Class B Common Stock Class C Common Stock Additional

Number of Common Number of Common Number of Common Paid-In Accumulated

Shares Stock Shares Stock Shares Stock Capital Deficit Total

Balance at December 31, 2022 100,000,000 — 56,008,749 — 6,345,000 — $ 42,625,786 $ ( 37,986,129 ) $ 4,639,657

Expense related to stock

options (Note 9) — — — — — — $ 492,295 $ — $ 492,295

Issuance of Class B

common stock (Note 1) — — 1,109,025 — — — $ 1,000,000 $ — $ 1,000,000

Net loss — — — — — — $ — $ ( 27,479,247 ) $ ( 27,479,247 )

Balance at December 31, 2023 100,000,000 — 57,117,774 — 6,345,000 — $ 44,118,081 $ ( 65,465,376 ) $ ( 21,347,295 )

Expense related to stock

options (Note 9) — — — — — — $ 1,273,053 $ — $ 1,273,053

Convertible debt converted to equity from reverse recapitalization — — — — — — $ 54,991,472 $ — $ 54,991,472

Assumption of debt from reverse recapitalization — — — — — — $ ( 10,285,918 ) $ — $ ( 10,285,918 )

Conversion to Newco shares from reverse recapitalization (Note 1) ( 78,621,110 ) — ( 57,117,774 ) — ( 6,345,000 ) — $ — $ — $ —

Net loss — — — — — — $ — $ ( 25,327,198 ) $ ( 25,327,198 )

Balance at December 31, 2024 21,378,890 — — — — — $ 90,096,688 $ ( 90,792,574 ) $ ( 695,886 )

Common shares, no par value, unlimited number of shares authorized ( 21,378,890 Issued and Outstanding)

Class B shares, no par value, unlimited number of shares authorized

Class C shares, no par value, unlimited number of shares authorized

See accompanying notes to the consolidated financial statements.

Borealis Foods Inc.

and Subsidiaries

Consolidated Statements of Cash Flows

Year Ended December 31, 2024 Year Ended December 31, 2023

Cash Flows from Operating Activities:

$ ( 2,941,403 )

$ ( 302,544 )

Dividend income

( 2,201,765 )

( 2,578,984 )

Foreign exchange loss/(gain)

Adjustments to reconcile net loss to net cash used in operating activities:

Net loss $ ( 25,327,198 ) $ ( 27,479,247 )

Adjustment to reconcile net loss to net cash used in operating activities:

Loss on disposal of assets — 962,665

Non-cash compensation expense related to stock options 1,273,053 492,295

Common stock issued to marketing representative — 1,000,000

Depreciation and amortization 2,323,617 3,936,655

Amortization of loan costs 310,964 121,496

Provision for credit losses 23,220 111,050

Provision for inventory reserve 703,450 ( 11,367 )

Deferred income taxes ( 106,309 ) ( 351,123 )

Changes in operating assets and liabilities:

Accrued expenses

Prepaid expenses

Accounts receivable ( 213,212 ) 705,951

Inventories ( 1,804,681 ) ( 648,996 )

Operating lease ( 3,138 ) 6,444

Prepaid expenses and other ( 288,734 ) 972,355

Accounts payable and accrued expenses 8,019,425 2,176,727

Net cash used in operating activities ( 15,089,543 ) ( 18,005,095 )

( 2,338,695 )

( 2,105,718 )

Cash flows from investing activities

Deposit into the Trust Account

Cash withdrawn from trust account in connection with redemptions of Class A ordinary shareholders

Net cash provided by investing activities

Proceeds from reverse capitalization 63,575 —

Purchases of intangible assets ( 319,307 ) —

Purchases of property, plant and equipment, net ( 1,651,403 ) ( 4,466,111 )

Net cash used in investing activities ( 1,907,135 ) ( 4,466,111 )

Cash flows from financing activities

Proceeds from promissory note - related party

Repayment of related party payable

Proceeds from related party

Payment for redemptions of Class A ordinary shares

( 159,450,374 )

Net cash (used in) provided by financing activities

( 157,062,374 )

Net payments to related parties — ( 500,000 )

Proceeds from convertible notes payable 3,000,000 27,000,000

Payments on convertible notes payable — ( 4,500,000 )

Proceeds from notes payable — 15,000,000

Payments on loan fees — ( 931,186 )

Payments on finance leases payable ( 565,987 ) ( 498,594 )

Borrowings from line of credit 7,600,000 —

Payments on line of credit — ( 10,630,000 )

Net cash provided by financing activities 10,034,013 24,940,220

Net change in cash ( 6,962,665 ) 2,469,014

Cash - Beginning

Cash - Ending

Supplemental disclosure of non-cash investing and financing activities:

Remeasurement for Class A ordinary shares subject to redemption

The accompanying notes are an integral part of

the financial statements.

Cash, beginning of year 7,615,630 5,146,616

Cash, end of year $ 652,965 $ 7,615,630

Supplemental cash flow data

Cash paid during the period for:

Interest $ 2,636,181 $ 2,912,879

Income taxes 14,948 15,092

Non-cash investing and financing activities

Conversion of notes payable into Class A shares (note 4) $ ( 54,991,472 ) $ —

Note payable supplier finance 2,747,833 —

Note payable accounted for as due to related party 7,601,661 —

See accompanying notes to the consolidated financial statements.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS

Oxus Acquisition Corp.

“ Company ”) is a blank check company incorporated in the Cayman Islands on February 3, 2021.

The Company was formed

for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination

with one or more businesses (a “ Business Combination ”).

The Company is not limited to a particular industry or geographic

region for purposes of consummating a Business Combination.

As of the balance sheet

date, the Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated

with early stage and emerging growth companies.

As of December 31, 2023 the

Company had not commenced any operations.

All activity for the period from February 3, 2021 (inception) through December 31, 2023, relates

to the Company’s formation and the initial public offering (“ Initial Public Offering ”), which is described below,

and since the offering identifying and evaluating prospective acquisition targets for a Business Combination.

The Company will not generate

any operating revenues until after the completion of a Business Combination, at the earliest.

The Company will generate non-operating

income in the form of interest income or dividend income from the proceeds derived from the Initial Public Offering.

The Company has

selected December 31 as its fiscal year end.

On February 7, 2024, the Company completed its Business Combination and has since been an

operating entity (refer to Note 9).

On September 8, 2021, the

Company closed its Initial Public Offering of 15,000,000 units at $ 10.00 per unit (the “ Units ” and, with respect to

the ordinary shares included in the Units, the “ Public Shares ”) which is discussed in Note 3 and the sale of 8,400,000

warrants (each, a “Private Warrant” and collectively, the “ Private Warrants ”) at a price of $ 1.00 per

Private Warrant in a private placement to the Company’s sponsor, Oxus Capital Pte.

Ltd (the “ Sponsor ”) and its

underwriters that closed simultaneously with the closing of the Initial Public Offering (as described in Note 4).

The Company has listed

the Units on the Nasdaq Capital Market (“ Nasdaq ”).

Transaction costs amounted

to $ 3.70 million consisting of $ 3.00 million in cash of underwriting fees and $ 0.70 million of other offering costs.

The Company’s

management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the

sale of the Private Warrants, although substantially all of the net proceeds are intended to be applied generally toward

consummating a Business Combination.

The Company must complete a Business Combination with one or more operating businesses or

assets that together have an aggregate fair market value equal to at least 80 % of the net assets held in the Trust Account (defined

below) (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred

underwriting commissions) at the time of the Company’s signing a definitive agreement in connection with its initial Business

The Company will only complete a Business Combination if the post-transaction company owns or acquires 50 % or more of

the outstanding voting securities of the target or otherwise acquires an interest in the target business or assets sufficient for it

not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment

Company Act”).

Upon the closing of the Initial

Public Offering on September 8, 2021, the Company deposited $ 153.00 million ($ 10.20 per Unit) from the proceeds of the Initial Public

Offering in the trust account (the “ Trust Account ”), located in the United States and invested only in U.S.

securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in

any open-ended investment company that holds itself out as a money market fund selected by the Company meeting certain conditions of

Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of:

(i) the completion of a Business Combination

and (ii) the distribution of the funds held in the Trust Account, as described below.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Description of Business and Summary of Significant Accounting Policies

The accompanying consolidated financial statements include the financial statements of Borealis Foods Inc.

(“ Borealis ”), and its subsidiaries:

Palmetto Gourmet Foods (Canada) Inc., (" PGF Canada "), Palmetto Gourmet Foods, Inc.

(“ PGF ”), PGF Real Estate I, Inc.

(“ PGF RE I ”), PGF Real Estate II, Inc.

(“ PGF RE II ”), and Borealis IP (" Borealis IP ") (collectively, the “ Company ”).

Borealis is a food technology integrator with a mission to address global food security challenges through the development and commercialization of tasty, affordable and sustainable functional foods.

Borealis has developed a range of high-quality, affordable, sustainable, and nutritious premium, ready-to-eat meals sold in the United States, Canada, Central America, South America and Europe.

PGF Canada is a holding company, holding the shares of PGF.

PGF is a food manufacturing company with a BRC AA+ rated food grade facility.

PGF RE I and PGF RE II are holding companies that rent their fixed assets to PGF.

Borealis IP holds the intellectual property of the Company.

Intercompany balances and transactions have been eliminated in consolidation.

Reverse Recapitalization Transaction

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.

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

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION

OF BUSINESS OPERATIONS (Continued)

On September 13, 2021, the

underwriters exercised their over-allotment option in full (see Note 4), according to which the Company consummated the sale of an additional

2,250,000 Units, at $ 10.00 per Unit, and the sale of an additional 900,000 Private Warrants, at $ 1.00 per Private Warrant, generating

total gross proceeds of $ 23.40 million.

The proceeds from the sale of the additional Units were deposited into the Trust Account, bringing

the aggregate proceeds held in the Trust Account to $ 175.95 million, and incurring additional cash underwriting discount of approximately

$ 0.45 million.

The Company will provide

its holders of the outstanding Public Shares (the “ public shareholders ”) with the opportunity to redeem all or a portion

of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve

the Business Combination or (ii) by means of a tender offer.

The decision as to whether the Company will seek shareholder approval of

a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion.

The public shareholders will

be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be

$ 10.20 per Public Share, plus any pro rata income earned on the funds held in the Trust Account and not previously released to the Company

to pay its tax obligations).

There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s

The Public Shares subject to redemption will be recorded at redemption value and classified as temporary equity upon the completion

of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s (“ FASB ”) Accounting

Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity”.

The Company will only proceed

with a Business Combination if the Company has net tangible assets of at least $ 5,000,001 either prior to or upon such consummation of

a Business Combination and, if the Company seeks shareholder approval, a majority of the shares voted are voted in favor of the Business

If a shareholder vote is not required by applicable law or stock exchange rules and the Company does not decide to hold

a shareholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Memorandum and Articles of Association,

as amended (the “Memorandum and Articles of Association”), conduct the redemptions pursuant to the tender offer rules of

Securities and Exchange Commission (“ SEC ”) and file tender offer documents with the SEC prior to completing

a Business Combination.

If, however, shareholder approval of the transaction is required by applicable law or stock exchange rules, or

the Company decides to obtain shareholder approval for business or other reasons, the Company will offer to redeem shares in conjunction

with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules.

If the Company seeks shareholder approval

in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5), and any Public Shares

purchased during or after the Initial Public Offering in favor of approving a Business Combination.

Additionally, each public shareholder

may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.

Notwithstanding the above,

if the Company seeks shareholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer

rules, the Certificate of Incorporation provides that a public shareholder, together with any affiliate of such shareholder or any other

person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange

Act of 1934, as amended (the “ Exchange Act ”)), will be restricted from redeeming its shares with respect to more than

an aggregate of 15 % or more of the Public Shares, without the prior consent of the Company.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Reverse Recapitalization Transaction (continued)

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.

The equity structure prior to the reverse merger (Class A, B and C) with unlimited amounts authorized all had the same rights and privileges.

With the reverse recapitalization, all outstanding shares of Class A, B and C were combined into common shares of the newly formed Company.

Accounting Impact of the Reverse Recapitalization

The transaction was accounted for as a reverse recapitalization.

Oxus was deemed the accounting predecessor and Borealis is the successor Securities and Exchange Commission (“ SEC ”) registrant.

Under this method of accounting, Oxus was treated as the acquired company for financial statement reporting purposes.

For accounting purposes, Legacy Borealis was deemed to be the accounting acquirer in the transaction and, consequently, the transaction was treated as a recapitalization of Legacy Borealis.

Accordingly, the consolidated balance sheets and results of operations of Legacy Borealis became the historical financial statements of Borealis, and Oxus’ assets, liabilities, and results of operations were consolidated with Legacy Borealis’ beginning on February 7, 2024.

The net assets of Oxus were recognized at carrying value, with no goodwill or other intangible assets recorded.

Transaction costs incurred and unpaid by Oxus were converted into debt (Note 4) and shown as a reduction in additional paid-in capital.

Going Concern

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As of December 31, 2024, the Company has incurred a net loss and experienced recurring losses from operations including negative cash flows from operations for the period ended December 31, 2024 and 2023.

These conditions raise substantial doubt about the Company's ability to continue as a going concern within one year after April 15, 2025.

The Company expects that operating costs will decrease in future periods.

During 2024, the Company incurred approximately $ 1.51 million of transaction expenses, and $ 1.27 million in employee stock compensation expenses associated with a Reverse Recapitalization.

These were non-recurring costs, and management anticipates improved operating efficiency moving forward.

Despite the Company’s current financial position, management is actively pursuing several strategic and operational initiatives to improve liquidity and profitability, including:

• Continued efforts to reduce selling, general, and administrative expenses for the year ended December 31, 2025.

• Exploration of financing options, including equity or debt issuances, to strengthen the balance sheet.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS

The Sponsor has agreed (a)

to waive its redemption rights with respect to its Founder Shares (as defined at Note 5) and Public Shares held by it in connection with

the completion of a Business Combination and (b) not to propose an amendment to the Certificate of Incorporation (i) to modify the substance

or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or

to redeem 100 % of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision

relating to shareholders’ rights or pre-initial Business Combination activity, unless the Company provides the public shareholders

with the opportunity to redeem their Public Shares in conjunction with any such amendment.

The Company initially had

until March 8, 2023 to complete a Business Combination, which was extended until December 8, 2023 (the “ Combination Period ”)

after the approval obtained at an extraordinary meeting of shareholder held on March 2, 2023 (the “ Extension ”).

December 5, 2023, the Company filed an amendment (the “ Charter Amendment ”) to the Company’s Charter with the

Registrar of Companies in the Cayman Islands to extend the date by which the Company must consummate its initial Business Combination

from December 8, 2023 to June 8, 2024.

If the Company is unable to complete a Business Combination within the Combination Period, the

Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than

ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on

deposit in the Trust Account including income earned on the funds held in the Trust Account and not previously released to the Company

to pay its tax obligations (less up to $ 100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public

Shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive

further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval

of the Company’s remaining shareholders and the Company’s board of directors, dissolve and liquidate, subject in each case

to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable

There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire

worthless if the Company fails to complete a Business Combination within the Combination Period.

The Sponsor has agreed to

waive its liquidation rights with respect to the Founder Shares (as defined at Note 5) if the Company fails to complete a Business Combination

within the Combination Period.

However, if the Sponsor acquires Public Shares in or after the Initial Public Offering, such Public Shares

will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the

Combination Period.

In order to protect the amounts

held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services

rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction

agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $ 10.20 per Public Share and (2) the actual amount

per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the

trust assets, less taxes payable, provided that such liability will not apply to claims by a third party or prospective target business

who executed a waiver of any and all rights to the monies held in the Trust Account nor will it apply to any claims under the Company’s

indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities

Act of 1933, as amended (the “ Securities Act ”).

Moreover, in the event that an executed waiver is deemed to be unenforceable

against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.

The Company will

seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to

have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses

and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim

of any kind in or to monies held in the Trust Account.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Going Concern (continued)

While these initiatives are designed to support the Company’s ability to meet its obligations as they come due, substantial doubt continues to exist about the ability of the Company to continue as a going concern within one year from April 15, 2025 .

Basis of Presentation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“ US GAAP ”) and the Company’s functional currency is the U.S.

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Cash Equivalents

The Company classifies all highly liquid securities with stated maturities of three months or less from the date of purchase as cash equivalents.

There were no cash equivalents as of December 31, 2024 and December 31, 2023.

Inventories, net

Inventories are stated at the lower of cost or net realizable value.

The cost of raw materials is determined using the first-in, first-out method.

The cost of finished goods is determined using the weighted average cost method.

A reserve is recorded for any food inventory that is expired (or expected to expire before sale) and any raw materials for projects that have been discontinued.

Prepaid Expenses

Prepaid expenses include approximately $ 1,135,000 and $ 846,000 composed primarily of prepaid insurance, deposits on inventory purchases and property, plant and equipment purchases as of December 31, 2024 and December 31, 2023, respectively.

Prepaid expenses and other current assets as of December 31, 2024 include a significant insurance recovery, representing approximately $ 643,000 of the total balance.

Property, Plant and Equipment, net

Property, plant, and equipment are recorded at cost.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets or, where applicable, based on actual machine hours utilized.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS

On February 23, 2023, the

Company entered into a Business Combination agreement by and among the Company, 1000397116 Ontario Inc., a corporation incorporated under

the laws of the province of Ontario, Canada (“ Newco ”) and a wholly-owned subsidiary of the Company, and Borealis Foods

Inc (“ Borealis ”) (as may be amended and/or restated from time to time, the “ Business Combination Agreement ”).

Pursuant to the Business Combination Agreement, among other things:

(a) the Company will domesticate and continue as a corporation existing

under the laws of the province of Ontario, Canada (the “ Continuance ” and, the Company as the continuing entity, “ New

(b) on the closing date, Newco and Borealis will amalgamate in accordance with the terms of the plan of arrangement

(the “ Borealis Amalgamation ” and Newco and Borealis as amalgamated, “ Amalco ”), with Amalco surviving

the Borealis Amalgamation as a wholly-owned subsidiary of New Oxus;

and (c) on the closing date, immediately following the Borealis Amalgamation,

Amalco and New Oxus will amalgamate (the “ New Oxus Amalgamation ,” and together with the Continuance, the Borealis Amalgamation

and other transactions contemplated by the Business Combination, the plan of arrangement and the ancillary agreements, the “ Transaction ”),

with New Oxus surviving the New Oxus Amalgamation.

The Business Combination Agreement

was unanimously approved by Oxus’ and Borealis’ respective board of directors.

Under the Business Combination Agreement, the

shareholders of Borealis (“ Borealis Shareholders ”) will receive from New Oxus, in the aggregate, a number of shares

of New Oxus equal to (a) the Borealis Value (as defined below) divided by (b) $ 10.00 .

The Borealis Value will be equal to $ 150 million

less net indebtedness (aggregate consolidated amount of indebtedness of Borealis minus cash) (the “ Borealis Value ”).

On March 2, 2023, at the extraordinary

general meeting of shareholders in connection with the Extension, the holders of 15,300,532 Class A ordinary shares of the Company properly

exercised their right to redeem their shares for cash at a redemption price of approximately $ 10.41 per share, for an aggregate redemption

amount of approximately $ 159.34 million, leaving approximately $ 20.3 million in the Trust Account.

On August 11, 2023, the Company,

and Borealis, entered into an amendment (the “ Amendment ” ) to the Business Combination Agreement, to amend and restate

certain terms of the Business Combination Agreement, including (i) Section 7.18(a), to change the number of awards of shares of New SPAC

Shares to be granted under the New SPAC Equity Plan from 15 % to 5 %;

(ii) to delete the form of the Plan of Arrangement attached as Exhibit

B to the original Business Combination Agreement and replace it with the form attached as Exhibit A to the Amendment (the “Plan

of Arrangement (Amended)”);

and (iii) to delete the form of the New SPAC Bylaws attached as Exhibit G to the Business Combination

Agreement and replace it with the form attached as Exhibit B to the Amendment (the “ New SPAC Bylaws (Amended) ”).

Plan of Arrangement (Amended) includes, among other things, certain changes to reflect a plan of arrangement under section 192 of the

CBCA and section 182 of the OBCA and certain changes to provisions relating to the New Oxus Amalgamation, and the effects of such amalgamation.

The New SPAC Bylaws (Amended) includes additional provisions relating to the appointment of an audit committee, and clarification on the

quorum requirements for a meeting of shareholders.

On August 14, 2023, the Company filed a registration statement on (“ Form

S-4 ”) with the SEC relating to the proposed Business Combination with Borealis.

On October 24, 2023, the Company

filed an amendment to Form S-4 (“ Amendment 1 ”) with the SEC relating to the proposed business combination with Borealis.

On November 13, 2023, the Company filed another amendment to Form S-4 (“ Amendment 2 ”) with the SEC relating to the

proposed business combination with Borealis.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Management has opted to depreciate the manufacturing lines and related assets using the machine hours method, as it provides a more accurate reflection of the actual utilization and wear of these assets.

This approach ensures that the depreciation expense aligns more closely with the assets' usage patterns, thereby improving the matching of costs with related revenues.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS

ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS

On November 8, 2023, the Company’s

shareholders filed a preliminary proxy statement announcing an extraordinary general meeting (the “Extraordinary General Meeting”)

to consider and vote upon the following proposals:

(a) as a special resolution, to amend the Company’s Second Amended and Restated Memorandum and the

Charter pursuant to an amendment to the Charter in the form set forth in Annex A of the filed proxy statement to extend the date by

which the Company must (1) consummate a Business Combination, (2) cease its operations except for the purpose of winding up if it

fails to complete such Business Combination, and (3) redeem all of the Class

A ordinary shares, included as part of the units sold in the Company’s Initial Public Offering if it fails to complete such Business

Combination, for up to an additional six months, from the December 8, 2023 to up to June 8, 2024, or such earlier date as determined by

the Company’s board of directors;

(b) as an ordinary resolution, to approve the adjournment of the Extraordinary General Meeting to a later

date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or

otherwise in connection with, the approval of the Extension Proposal (the “Adjournment Proposal”), which will only be presented

at the Extraordinary General Meeting if, based on the tabulated votes, there are not sufficient votes at the time of the Extraordinary

General Meeting to approve the Extension Proposal, in which case the Adjournment Proposal will be the only proposal presented at the Extraordinary

General Meeting.

On December 5, 2023, in connection

with the Second Extraordinary General Meeting, the Company filed the Charter Amendment to extend the date by which the Company must consummate

its initial Business Combination from December 8, 2023 to June 8, 2024, or such earlier date as determined by the Company’s board

of directors (the “Extended Date”).

The Company’s shareholders approved the Charter Amendment at the Extraordinary General

Meeting on December 5, 2023.

On December 5, 2023, at

the Second Extraordinary General Meeting, the holders of 9,837 Class A ordinary shares of the Company properly exercised their right

to redeem their shares for cash at a redemption price of approximately $ 11.20 per share, for an aggregate redemption amount of

approximately $ 0.11 million, leaving approximately $ 21.73 million in the Trust Account.

On January 16, 2024, the Company’s

S-4 registration statement was declared effective.

On February 2, 2024, the Company

held an extraordinary general meeting (the “ Third Extraordinary General Meeting ”) whereby shareholders holding 1,886,751

Class A ordinary shares of the Company exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s

trust account.

As a result, approximately $ 21.42 million (approximately $ 11.35 per share) was removed from the Company’s trust account

to pay such shareholders.

On February 7, 2024 (the “ Closing

Date ”), Borealis, the Company, and Newco, consummated the Transaction, following the approval at the Third Extraordinary General

Shareholder Support Agreements

Concurrently with the execution

and delivery of the Business Combination Agreement, Oxus, Borealis and certain Borealis Shareholders entered into an agreement, pursuant

to which, among other things, such Borealis Shareholders have agreed to vote their Borealis shares in favor of the Transaction and not

sell or transfer their Borealis shares (the “ Shareholder Support Agreements ”).

Sponsor Support Agreement

Concurrently with the execution

and delivery of the Business Combination Agreement, Oxus, Borealis and the Sponsor entered into an agreement, pursuant to which, among

other things, Sponsor agreed to (A) vote its founder shares in favor of the Transaction and the Oxus Proposals, (B) not redeem its founder

shares, (C) waive certain of its anti-dilution rights, (D) convert the Sponsor Convertible Notes, and (E) forfeit certain Sponsor founder

shares as a part of incentive equity compensation for directors, officers and employees of New Oxus (subject to terms and conditions set

forth in such agreement) (the “ Sponsor Support Agreement ”).

Registration Rights Agreement

In connection with the closing

date (the “Closing”), Oxus and certain Borealis Shareholders and certain shareholders of Oxus (the “ Holders ”)

will enter into an agreement, pursuant to which Oxus will be obligated to file a registration statement to register the resale of certain

securities of Oxus held by the Holders.

The Registration Rights Agreement will also provide the Holders with “piggy-back”

registration rights, subject to certain requirements and customary conditions (the “ Registration Rights Agreement ”).

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Property, Plant and Equipment, net (continued)

This change in depreciation method was a change in estimate effected by a change in accounting principle and accordingly was accounted for prospectively in accordance with relevant guidance.

The change in the method of calculating depreciation resulted in an increase in net income of $ 1,796,000 for the year ended December 31, 2024.

This increase in net income resulted in an improvement of $ 0.09 to loss per share.

Since this adjustment is applied prospectively, it has no impact on the financial results for 2023.

The total cost basis of machinery subject to depreciation over machine hours was approximately $ 38,601,000 as of December 31, 2024 and $ 35,255,000 as of December 31, 2023.

Straight-line assets:

Buildings and improvements 10 - 30 years

Furniture, fixtures and equipment 3 - 15 years

Machine hours assets:

Furniture, fixtures and equipment

89,232 machine hours

Construction in progress includes the cost of property, plant and equipment being constructed or otherwise not yet in service.

Costs include materials, labor, capitalized interest, engineering and testing costs, and other costs necessary to get the assets ready for their intended use.

Intangible Assets

Patents are recorded at cost and are amortized on a straight-line basis over their estimated useful lives.

The carrying value of patents is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

The costs of obtaining equipment leases and debt issuance costs are amortized over the term of the respective obligations, using the straight-line method.

US GAAP requires that the effective yield method be used to amortize debt issuance costs;

however, the effect of using the straight-line method is not materially different from the results that would have been obtained under the effective yield method.

Amortization of loan costs is included as a component of interest expense in the accompanying consolidated statements of operations.

Loan costs are shown as reduction of related debt balances for financial statement presentation.

The Company’s goodwill resulted from a prior year acquisition.

Goodwill is not amortized but is reviewed annually for impairment or more frequently as events or circumstances indicate its carrying amount may not be

No impairment losses were recorded for the year ended December 31, 2024 and 2023.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS

ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS

Lock-Up Agreements

In connection with the Closing,

Oxus and certain directors/officers/five percent ( 5 %) or greater shareholders of Borealis (the “ Subject Party ”) will

enter into agreements, pursuant to which (A) fifty percent ( 50 %) of the shares of New Oxus held by the Subject Party (the “Restricted

Securities”) will be locked-up during the period commencing from the Closing and ending on the earlier to occur of (i) twelve (12)

months after the date of the Closing and (ii) the date on which the closing price of common shares of New Oxus equals or exceeds $ 12.00

per share (as adjusted to take into account any stock split, stock dividend, reverse stock split, recapitalization or similar event) for

any twenty (20) trading days within a thirty (30)-trading day period starting after the Closing, and (B) fifty percent ( 50 %) of the Restricted

Securities will be locked-up during the period commencing from the Closing and ending on twelve (12) months after the date of the Closing,

subject to certain specifications and exceptions (the “ Lock-Up Agreements ”).

Liquidity and Going Concern

As of December 31, 2023, the

Company had $ 0.09 million in its operating bank account, $ 21.92 million of marketable securities held in the Trust Account to be used

for a Business Combination or to repurchase or redeem its ordinary shares in connection therewith and a working capital deficienc y

of $ 7.36 million.

In February 2024, the Company

completed its Business Combination, resulting in approximately $ 50.3 million of convertible debt converting to equity.

Also, the Company

expects lower operating expenses in 2024 with the completion of the merger.

In connection with the Company's

assessment of going concern considerations in accordance with ASC Subtopic 205-40, Presentation of Financial Statements - Going Concern,

the historical operating results raise substantial doubt about the Company's ability to continue as a going concern.

The Company is taking

proactive measures to address this concern and believes that the actions discussed below are likely to mitigate the doubt raised by its

historical performance and meet its estimated liquidity needs for at least one year from the issuance date of these financial statements.

Nevertheless, the Company cannot guarantee the success of these actions or their ability to generate the expected liquidity as currently

The Company's ability to continue

as a going concern is contingent upon various factors, including its ability to meet financial requirements, secure additional capital,

and execute successful future operations.

The financial statements have not been adjusted to reflect the possible effects of the Company

not continuing as a going concern.

Management intends to finance the Company's operations through advances

from existing lines of credit until such time as a merger or other investment can be secured.

However, there are currently

no formal agreements in place for such funding or issuance of securities, and there can be no assurance of their availability in the future.

Nonetheless, management believes that this strategy provides a viable opportunity for the Company to continue as a going concern.

Substantial doubt continues

to exist about the ability of the Company to continue as a going concern within one year from the filing date.

Risks and Uncertainties

Management is currently evaluating

the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a

negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific

impact is not readily determinable as of the date of these financial statements.

The financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Amounts Due to Related Parties

Amounts due to related parties (Company shareholders and entities controlled by Company shareholders) total $ 15,427,453 as of December 31, 2024 and $ 7,825,790 as of December 31, 2023.

This related party liability is comprised of a note payable to a shareholder in the amount of $ 7,325,790 , due on demand and bearing interest at 10 % annually.

An additional note payable to a shareholder in the amount of $ 500,000 as of December 31, 2024 and December 31, 2023, respectively, bears interest at 10 % annually and is due December 31, 2025.

The remaining $ 7,601,661 shareholder note payable was a result of expenses recognized by Oxus and resulted in reduction of contributed equity at the Reverse Recapitalization.

This note matures in February 2026 after extension, and is non-interest bearing.

Food Systems for the Future is a related party by virtue of its affiliation with a member of our Board of Directors.

As of December 31, 2024, the Organization had a total payable of $ 45,000 to Food Systems for the Future.

Total purchases from this related party during the year ended December 31, 2024, amounted to $ 389,000 .

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Revenue and Cost Recognition and Accounts Receivable

The Company's revenue is primarily generated from the sale of food products.

These sales contain a single performance obligation.

Revenue is recognized at a point in time and the Company recognizes revenue upon shipment of goods when ownership, risk, and rewards transfer to the customer.

Certain of the Company's contracts with customers include variable consideration consisting of payment discounts and promotions.

These programs include rebates, temporary on-shelf price reductions, off-invoice discounts, retailer advertisements, product coupons, slotting fees and other trade activities.

Provision for discounts and incentives are recorded in the same period in which the related revenues are recognized.

Gross revenues were approximately $ 29,100,000 and $ 31,377,000 for the years ended December 31, 2024 and 2023, respectively.

Total payment discounts and promotions were approximately $ 1,431,000 and $ 1,392,000 resulting in net revenues of approximately $ 27,669,000 and $ 29,985,000 for the years ended December 31, 2024 and 2023, respectively.

The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less.

The incremental cost to obtain contracts was not material.

Accounts receivable related to product sales typically have payment terms of 30 days.

The Company performs ongoing credit evaluations of its customers and generally does not require collateral.

The allowance for credit losses reflects the Company’s estimate of probable losses related to its accounts receivable.

Collections from

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS

ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS OPERATIONS

Risks and Uncertainties (Continued)

Various social and political

circumstances in the U.S.

and around the world (including wars and other forms of conflict, including rising trade tensions between the

United States and China, and other uncertainties regarding actual and potential shifts in the U.S.

and foreign, trade, economic and other

policies with other countries, terrorist acts, security operations and catastrophic events such as fires, floods, earthquakes, tornadoes,

hurricanes and global health epidemics), may also contribute to increased market volatility and economic uncertainties or deterioration

and worldwide.

Specifically, the rising conflict between Russia and Ukraine, and resulting market volatility could adversely

affect the Company’s ability to complete a Business Combination.

In response to the conflict between Russia and Ukraine, the U.S.

and other countries have imposed sanctions or other restrictive actions against Russia.

The recent military conflict between Israel and

militant groups led by Hamas has also caused uncertainty in the global markets.

Any of the above factors, including sanctions, export

controls, tariffs, trade wars and other governmental actions, could have a material adverse effect on the Company’s ability to complete

a Business Combination and the value of the Company’s securities.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation

Reduction Act of 2022 (the “ IR Act ”) was signed into federal law.

The IR Act provides for, among other things, a U.S.

federal 1 % excise tax on certain repurchases of stock by publicly traded U.S.

domestic corporations and certain U.S.

domestic subsidiaries

of publicly traded foreign corporations occurring on or after January 1, 2023.

Because the Company may acquire a domestic corporation

or engage in a transaction in which a domestic corporation becomes our parent to our affiliate and our securities trade on a U.S.

exchange, the Company may become a “covered corporation” within the meaning of the IR Act.

The excise tax is imposed on the

repurchasing corporation itself, not its shareholders from which shares are repurchase.

The amount of the excise tax is generally 1 % of

the fair market value of the shares repurchased at the time of the repurchase.

However, for purposes of calculating the excise tax, repurchasing

corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases

during the same taxable year.

In addition, certain exceptions apply to the excise tax.

Department of the Treasury (the “ Treasury ”)

has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Presentation

The accompanying financial

statements are presented in U.S.

dollars in conformity with accounting principles generally accepted in the United States of America (“ GAAP ”)

and pursuant to the rules and regulations of the SEC.

Emerging Growth Company

The Company is an “emerging

growth company,” as defined in Section 2(a) of the Securities Act, as amended by the Jumpstart Our Business Startups Act of 2012,

(the “ JOBS Act ”), and it may take advantage of certain exemptions from various reporting requirements that are applicable

to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the

auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive

compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote

on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1)

of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until

private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class

of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that

apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such

extended transition period which means that when a standard is issued or revised and it has different application dates for public or

private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt

the new or revised standard.

This may make comparison of

the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth

company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting

standards used.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Revenue and Cost Recognition and Accounts Receivable (continued)

customers are continuously monitored and an allowance for credit losses is maintained based on historical experience adjusted for current conditions and reasonable forecasts taking into account geographical and

industry-specific economic factors.

The Company also considers specific customer collection issues.

Since the Company’s accounts receivable are largely similar, the Company evaluates its allowance for credit losses as one portfolio segment.

At origination, the Company evaluates credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, probabilities of default, industry trends and other internal metrics.

On a continuing basis, data for each major customer is regularly reviewed based on past-due status to evaluate the adequacy of the allowance for credit losses;

actual write-offs are charged against the allowance.

The Company incurred significant production training expenses for the years ended December 31, 2024 and 2023, totaling approximately $ 1,715,000 and $ 2,727,000 , due to PGF adding production capabilities during both periods.

Such amounts are recorded in sales, general and administrative costs in the accompanying consolidated statement of operations as these costs are not directly attributable to finished goods production.

The Company’s cost of goods sold represent materials, direct labor costs, and allocated overheads associated with the sale of finished goods to customers.

Costs associated with advertising are expensed as incurred and are included in selling, general and administrative expenses.

Advertising costs expensed for the years ended December 31, 2024 and 2023 were approximately $ 5,733,000 and $ 2,238,000 , respectively.

Research and Development Costs

Research and development costs have been expensed in the period incurred.

Research and development costs consist primarily of personnel and related expenses for our research and development staff, including salaries, benefits, share-based compensation, scale-up expenses, depreciation and amortization expenses on research and development assets, and facility lease costs.

Scale-up expenses include material waste costs, production personnel costs, and related expenses.

Research and development efforts are focused on enhancements to our existing product formulations and production processes in addition to the development of new products.

The Company expects to continue investing in research and development over time, as research and development and innovation are core elements of our business strategy, and the Company believes they represent a critical competitive advantage.

The Company believes continued innovation will capture a larger share of consumers through additional revenue streams.

Research and development expenses for the years ended December 31, 2024 and 2023 were approximately $ 197,000 and $ 460,000 , respectively, and are included in selling, general, and administrative expenses in the accompanying consolidated statements of operations.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS

ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Use of Estimates

The preparation of financial

statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the

reported amounts of expenses during the reporting period.

Making estimates requires management to exercise significant judgment.

at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date

of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more

future confirming events.

Estimates made in preparing these financial statements include, among other things, the fair value measurement

of shares transferred by the Sponsor to independent director nominees and fair value of shares to be transferred on completion of the

Business Combination as per the Incentive agreements entered by the Sponsor and officers of the Company.

Actual results could differ from

those estimates.

Cash and Cash Equivalents

The Company had $0.9

million and $ 0.68 million in cash as of December 31, 2023, and December 31, 2022, respectively.

The Company considers all short-term

investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company did not have any

cash equivalents as of December 31, 2023, and December 31, 2022, respectively.

Marketable Securities Held in Trust Account

The Company’s marketable

securities held in the Trust Account are classified as trading securities.

Trading securities are presented on the balance sheets at fair

value at the end of each reporting period.

Gains and losses resulting from the change in fair value of marketable securities held in Trust

Account are included in dividend income in the accompanying statements of operations.

The estimated fair values of marketable securities

held in Trust Account are determined using available market information.

On December 31, 2023, and December 31, 2022, the Company had

$21.87 million and $ 178.53 million, respectively, of marketable securities held in the Trust Account that were held in a money market

fund for which the underlying assets are U.S.

Treasury Securities.

As of December 31, 2023 the amount $ 21.92 million includes deposit

in transit of $ 0.05 million.

Ordinary Shares Subject to Possible Redemption

All of the 17,250,000 Class A ordinary shares sold as parts of the

Units in the Initial Public Offering contain a redemption feature.

In accordance with the ASC 480-10-S99-3A “Classification and

Measurement of Redeemable Securities”, redemption provisions not solely within the control of the Company requires the security

to be classified outside of permanent equity.

Ordinary liquidation events, which involve the redemption and liquidation of all of the

entity’s equity instruments, are excluded from the provisions of ASC 480.

Immediately upon the closing of the Initial Public Offering,

the Company recognized the accretion from initial book value to redemption amount value.

The change in the carrying value of redeemable

Class A ordinary shares resulted in charges against additional paid-in capital and accumulated deficit.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Business Development Costs

Business development expenses include all costs associated with directly growing and expanding a business segment, such as advertising, market research, and training.

These costs include staff salaries, travel expenses, and consulting expenses that the Company incurs while searching for new opportunities and maintaining current relationships.

Business development expenses for the years ended December 31, 2024 and 2023 were approximately $ 2,395,000 and $ 819,000 , respectively.

Business development expenses are included in sales, general and administrative expenses in the accompanying consolidated statements of operations.

In April 2023, the Company entered into a multi-year agreement for a marketing representative to assist in the recipes for three co-branded private label ramen noodles as well to be utilized in marketing of the Company for the marketing representative's name, image, likeness and voice.

This agreement includes a service fee, an investment stake in the Company, and a royalty agreement on future co-branded sales.

The service fee under this agreement is expensed on a straight-line basis under the terms of the contract.

The marketing representative has a world-wide reputation within the gourmet food industry.

We believe this agreement will assist us to increase our presence in the ramen noodle market.

Transaction Costs

On February 23, 2023, the Company signed a definitive business combination agreement with Oxus which was consummated on February 7, 2024 and described further in Note 1.

In connection with this agreement, the Company has incurred transaction costs of approximately $ 1,506,000 and $ 5,414,000 for the years ended December 31, 2024 and 2023, respectively.

Transaction costs have been expensed as incurred and are included in selling, general and administrative expenses in the accompanying consolidated statements of operations.

Concentration of Risk

The Company maintains cash balances at financial institutions in excess of federally insured limits as of December 31, 2024 and December 31, 2023.

The Company has not experienced any losses related to these balances.

The Federal Deposit Insurance Corporation insures eligible accounts up to $250,000 per depositor at each financial institution.

The Company holds cash at well-known banks and does not believe that it is exposed to any significant credit risks on its cash.

The Company extends unsecured credit to its customers in the ordinary course of business.

Payment terms are generally net 30 days with discounts amounting up to 10 % for early payments.

Accounts receivables are written off when they are determined to be uncollectible based on the financial stability of its customers and existing economic conditions.

Sales to two customers accounted for approximately 33 % and sales to one customer accounted for approximately 57 % of net revenues for the years ended December 31, 2024 and 2023, respectively.

Accounts receivable from three and two customers amounted to approximately 37 % and 50 % of total accounts receivable as of December 31, 2024 and 2023, respectively.

Substantially all of the Company’s sales for the years ended December 31, 2024 and 2023 occurred in the United States, Canada, Central America, South America, and Europe.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Ordinary Shares Subject to Possible Redemption

As of December 31, 2023 and

December 31, 2022, the Class A ordinary shares subject to possible redemption reflected on the balance sheets are reconciled in the following

Balance brought forward

$ 178,532,948

$ 175,950,000

Remeasurement of carrying value to redemption value

Redemption of Class A ordinary shares

( 159,450,374 )

Class A ordinary shares subject to possible redemption

$ 178,532,948

Offering Costs Associated with the Initial

Public Offering

The Company complies with

the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A – “Expenses of Offering”.

costs consist of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that are directly related

to the Initial Public Offering.

The Company recorded $ 3.87 million of offering costs as a reduction of temporary equity and $ 0.28 million

of offering costs as a reduction of permanent equity upon the completion of the Initial Public Offering ($ 3.45 million related to underwriters’

commissions and $ 0.70 million related to other offering expenses).

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Concentration of Risk (continued)

Purchases from 10 vendors accounted for approximately 47 % and 50 % of purchases during the years ended December 31, 2024 and 2023, respectively.

Accounts payable to these vendors totaled approximately $ 3,217,000 and $ 430,000 as of December 31, 2024 and 2023, respectively.

Fair Value Measurements

In accordance with US GAAP, the Company defines fair value as the price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date.

US GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available.

The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Observable inputs, such as quoted market prices in active markets for the identical asset or liability that are accessible at the measurement date.

Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly for the asset or liability.

Unobservable inputs that reflect the entity’s own assumptions about the exit price of the asset or liability.

Unobservable inputs may be used if there is little or no market data for the asset or liability at the measurement date.

The Company does not have assets measured at fair value on a recurring basis.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

The carrying amounts reported in the consolidated balance sheets for accounts receivable and accounts payable approximate their fair values due to the short-term nature of these instruments.

There is no material difference between the carrying amounts and fair values of the Company’s debt obligations, notes payable, line of credit and convertible notes payable, as interest rates approximate current market rates for similar types of debt instruments (Level 2).

Disclosures about the fair value of financial instruments are based on pertinent information available to management as of December 31, 2024 and December 31, 2023.

Although management is not aware of any factors that would significantly affect the reasonableness of the fair value amounts, such amounts were not comprehensively revalued for purposes of these consolidated financial statements and current estimates of fair value may differ significantly from the amounts presented herein.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Net Loss Per Ordinary Share

The Company applies the

two-class method in calculating earnings per share.

The contractual formula utilized to calculate the redemption amount approximates

The Class feature to redeem at fair value means that there is effectively only one class of share.

Changes in fair value

are not considered a dividend of the purposes of the numerator in the earnings per share calculation.

Net loss per ordinary share is

computed by dividing the pro rata net loss between the redeemable ordinary share and the non-redeemable ordinary share by the

weighted average number of ordinary share outstanding for each of the periods.

The calculation of diluted loss per ordinary share

does not consider the effect of the warrants issued in connection with the Initial Public Offering since the exercise of the

warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.

Ordinary shares subject to possible redemption

Net loss allocable to Class A ordinary shares subject to possible redemption

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Stock Based Compensation

The Company accounts for its stock compensation arrangements at fair value in accordance with Accounting Standards Codification (" ASC ") 718 - Compensation - Stock Compensation.

Compensation cost relating to share-based payment transactions is recognized in the Company’s consolidated financial statements based on the estimated fair value of the instruments issued.

The Company measures the cost of employees’ services in exchange for stock awards based on the grant-date fair value of the award using the Black Scholes model and recognizes the cost over the period the employee is required to provide services for the award, which is the vesting period.

The Company accounts for forfeitures as they occur.

Outstanding warrants were assumed at the Reverse Recapitalization.

The fair value of the warrants was determined using the Monte Carlo analysis at the date of the transaction.

The Company accounts for its Public and Private warrants as equity-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ ASC 480 ”) and ASC 815, Derivatives and Hedging (“ ASC 815 ”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent year end date while the warrants are outstanding.

It was determined at the Transaction Date that there were no changes to the classes or language that would impact the original assessment that the Public and Private warrants should be classified as equity.

Shipping and Handling Costs

Shipping and handling costs are expensed as incurred and are included in general and administrative expense in the consolidated statements of operations.

Recent Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, to enhance disclosures about significant segment expenses for public entities reporting segment information under ASC Topic 280.

The amendments require public entities to disclose significant expense categories for each reportable segment, other segment items, the title and position of the chief operating decision-maker, and interim disclosures of certain segment-related information previously required only on an annual basis.

The amendments clarify that entities reporting single segments must disclose

Recent Accounting Pronouncements (continued)

both the new and existing segment disclosures under Topic 280, and a public entity is permitted to disclose multiple measures of segment profit or loss if certain criteria are met.

The ASU is effective for years beginning

Borealis Foods Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

after December 15, 2023, and interim periods within years beginning after December 15, 2024.

The adoption of ASU 2023-07 did not have a significant impact on the Company's consolidated financial statements.

See Note 11, Segment Reporting, for the required disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , to enhance transparency into income tax disclosures.

The amendments require annual disclosure of certain information relating to the rate reconciliation, income taxes paid by jurisdiction, income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign.

The amendments also eliminate certain requirements relating to unrecognized tax benefits and certain deferred tax disclosure relating to subsidiaries and corporate joint ventures.

The ASU is effective for years beginning after December 15, 2024, and interim periods within years beginning after December 15, 2025.

Early adoption is permitted.

The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ ASU 2024-03 ”) which requires entities to (i) disclose amounts of (a) purchase of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and, (e) depreciation, depletion, and amortization recognized as part of oil-and gas-producing activities, (ii) include certain amounts that are already required to be disclosed under current U.S.

GAAP in the same disclosures as other disaggregation requirements, (iii) disclose a qualitative description of the amounts remaining in relevant expense captions that are not necessarily disaggregated quantitatively, and (iv) disclose the total amount of selling expenses, in annual reporting periods, an entity’s definition of selling expense.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating ASU 2024-03 to determine the impact it may have on its consolidated financial statements.

Inventories, net

Inventories were as follows:

December 31, 2024 December 31, 2023

Raw materials $ 6,712,529 $ 5,190,811

Finished goods 2,225,813 1,942,850

Reserve for obsolete inventory ( 892,083 ) ( 188,633 )

$ 8,046,259 $ 6,945,028

Borealis Foods Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Property, Plant and Equipment, net

Property, plant and equipment were as follows:

December 31, 2024 December 31, 2023

Building and improvements $ 10,110,188 $ 10,108,917

Furniture, fixtures and equipment 48,517,228 42,594,605

Construction in progress 879,220 5,078,103

59,506,636 57,781,625

Weighted average redeemable Class A ordinary shares, basic and diluted

Basic and diluted net loss per share, redeemable Class A ordinary shares

Non-redeemable ordinary shares

Net loss allocable to non-redeemable ordinary shares

accumulated depreciation ( 13,770,310 ) ( 11,373,085 )

$ 45,736,326 $ 46,408,540

Weighted average non-redeemable ordinary shares, basic and diluted

Basic and diluted net loss per share, non-redeemable ordinary shares

Concentration of Credit Risk

Financial instruments that

potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may

exceed the federal depository insurance coverage corporation limit of $ 250,000 .

The Company has not experienced losses on these accounts

and management believes the Company is not exposed to significant risks on such accounts.

Depreciation and amortization expense recorded in the years ended December 31, 2024 and 2023 was approximately $ 2,324,000 and $ 3,937,000 , respectively, which is included as a component of cost of goods sold.

During the years ended December 31, 2024 and 2023, interest capitalized to property, plant and equipment under construction was approximately $ 0 and $ 266,000 , respectively.

In 2022, the Company issued $ 20,000,000 of convertible notes payable that, after an extension was negotiated, had a maturity in February 2024 (unless converted) and bore interest at 10 % annually.

On or before the earlier of the maturity date or a “qualified financing event”, as defined in the note agreements, the outstanding principal and interest were convertible, at the option of the holder, into common shares of the Company.

The notes and accrued interest were converted into 2,189,997 common shares with the consummation of the Reverse Recapitalization with Oxus.

In 2022, the Company issued $ 4,800,000 in convertible notes payable.

During 2023, $ 4,500,000 of these notes matured without conversion and were repaid by the Company.

The remaining $ 300,000 of convertible notes payable bore interest at 10 % annually and, after an extension was negotiated, mature in February 2024 (unless converted).

The outstanding principal and interest under the remaining convertible notes were convertible, at the option of the holder, into the same equity as issued upon the Company’s issuance of preferred or common shares of at least $ 10,000,000 .

The notes and accrued interest were converted into 40,544 common shares with the consummation of the Reverse Recapitalization with Oxus.

In 2023, the Company issued $ 27,000,000 of convertible notes payable, of which $ 27,000,000 had a maturity date in 2024 (unless converted) and bore interest at 10 % annually.

The notes and accrued interest were converted into 3,787,585 common shares in connection with the consummation of the Reverse Recapitalization with Oxus.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (Continued)

Financial Instruments

The fair value of the Company’s

assets and liabilities, which qualify as financial instruments under FASB ASC 820, “Fair Value Measurements and Disclosures,”

approximates the carrying amounts represented in the balance sheets.

The Company accounts for income

taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future

tax consequences of events that have been included in the financial statements.

Under this method, deferred tax assets and liabilities

are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted

tax rates in effect for the year in which the differences are expected to reverse.

The effect of a change in tax rates on deferred tax

assets and liabilities is recognized in income in the period that includes the enactment date.

The Company recognizes

deferred tax assets to the extent that it believes these assets are more likely than not to be realized.

In making such a

determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable

temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.

If the Company

determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the

Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income

The Company records uncertain

tax positions In accordance with ASC 740 on the basis of a two-step process whereby (1) it determines whether it is more likely than not

that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet

the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 % likely

to be realized upon ultimate settlement with the related tax authority.

The Company is

considered to be an exempted Cayman Islands company with no connection to any other taxable jurisdiction.

The company is not

presently subject to income taxes or income tax filing requirements in the Cayman Islands.

As such, the company’s income tax

provision was zero for the year ended December 31, 2023.

The Company accounts for its

Public and Private warrants as equity-classified instruments based on an assessment of the warrant’s specific terms and applicable

authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ ASC 480 ”) and ASC 815, Derivatives and

Hedging (“ ASC 815 ”).

The assessment considers whether the warrants are freestanding financial instruments pursuant

to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification

under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity

classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as

of each subsequent quarterly period end date while the warrants are outstanding.

In addition to the 23,400,000

warrants (representing 15,000,000 Public Warrants (as defined at Note 3) included in the units and 8,400,000 Private Warrants) issued

by the Company at the close of the Initial Public Offering, a further 3,150,000 warrants (representing 2,250,000 Public Warrants (as

defined at Note 3) included in the units and 900,000 Private Warrants) were issued as a result of the underwriters’ full exercise

of the over-allotment options.

All warrants were issued in accordance with the guidance contained in ASC 815-40, Derivatives and Hedging

— Contracts in Entity’s Own Equity and they met the criteria for equity classification and are required to be recorded as

part a component of additional paid-in capital at the time of issuance.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Debt (continued)

In 2021, the Company issued a $ 3,000,000 convertible note that matures in 2026 (unless converted) and bears interest at 3 % annually.

Accrued interest is payable monthly.

The outstanding principal and interest under the convertible note may be converted, at the option of the holder, into the same equity as issued upon the Company’s issuance of preferred or common shares of at least $ 10,000,000 (a “qualified financing event”), either as a single round or a lead round, at 85 % of the per share price paid during the qualified financing event.

The note holder elected not to convert at the Reverse Recapitalization and therefore the note is due at maturity.

In January 2024, the Company issued a $ 3,000,000 convertible note payable that had a maturity date in 2024 (unless converted) and bore interest at 10 % annually.

The note was converted into 375,925 common shares with the consummation of the Reverse Recapitalization with Oxus.

During 2023, the Company entered into a $ 25,000,000 financing agreement with a maturity date in August 2026.

Under this agreement, the Company has a $ 15,000,000 term facility which was used to pay off its then existing line of credit.

In March 2024, the Company entered into an amendment that extended the date of the first principal payment to March 2025.

In February 2025, a second amendment was executed that extended the first principal payment date to September 2025.

Under the amendment, payments of $ 83,000 are due monthly beginning in September 2025 with a lump sum payment of $ 14,083,000 due at maturity.

Interest accrues at the prime rate plus an applicable margin of 4.75 % per annum and is payable monthly.

The FrontWell financing agreement is secured by a collateral package that includes substantially all of the assets of PGF, PGF RE I, and PGF RE II.

In conjunction with this agreement, loan fees of approximately $ 931,000 were capitalized in 2023.

Amortization expense of approximately $ 311,000 and $ 121,000 was recorded on the fees for the years ended December 31, 2024.

In addition to the term facility, the Company obtained a $ 10,000,000 line of credit to fund working capital needs in support of its growth strategy.

Interest accrues at the prime rate plus the applicable margin of 4.50 %.

Interest is due and payable monthly beginning in September 2023.

The line of credit includes an unused line fee of 0.25 % per annum beginning on closing date through six months and increases to 0.50 % per annum thereafter.

As of December 31, 2024 and December 31, 2023 the line of credit had $ 7,600,000 and $ 0 drawn upon it, respectively.

In the period leading up to the Reverse Recapitalization, significant transaction costs were incurred by both parties.

In total, four notes payable of $ 13,035,374 were issued for the transaction debt and mature in 2025.

Details for the notes are as follows:

Note 1 – Incurred by Borealis.

The related expenses were recognized as incurred by Borealis and the trade payable was subsequently reclassified to notes payable.

Note 1 was issued in the original principal amount of $ 2,138,838 .

The note matures in May 2025, and bears interest at 10 % per annum.

Note 2 – Incurred by Borealis.

The related expenses were recognized as incurred by Borealis and the trade payable was subsequently reclassified to notes payable.

Note 2 was issued in the original principal amount of $ 1,314,875 .

The note matures in May 2025, and bears interest at 10 % per annum.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (Continued)

Foreign Currency Transactions

Certain transactions are denominated

in a currency other than the Company’s functional currency of the U.S.

dollar, and the Company generates assets and liabilities

that are fixed in terms of the amount of foreign currency that will be received or paid.

At each balance sheet date, the Company adjusts

the assets and liabilities to reflect the current exchange rate, resulting in a translation gain or loss.

Transaction gains and losses

are also realized upon a settlement of a foreign currency transaction in determining net loss for the period in which the transaction

Recently Adopted Accounting Pronouncements

In June 2022, the FASB issued

ASU 2022-03, which amends Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale

Restrictions (“ ASU 2022-03 ”).

ASU 2022-03 clarifies guidance for fair value measurement of an equity security subject

to a contractual sale restriction and establishes new disclosure requirements for such equity securities.

The Company elected to early

adopt ASU 2022-03 on July 1, 2023, and applied the amendment in measuring fair value of shares to be transferred on closing of a Business

Recent Accounting Pronouncements

In August 2020, FASB issued

Accounting Standards Update (“ ASU ”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20)

and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ ASU 2020-06 ”) to simplify

accounting for certain financial instruments.

ASU 2020-06 eliminates the

current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies

the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity.

The new standard

also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s

ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all

convertible instruments.

The provisions of ASU 2020-06

are applicable for fiscal years beginning after December 15, 2023, with early adoption permitted no earlier than fiscal years beginning

after December 15, 2020.

The Company is currently evaluating the impact of ASU 2020-06 on its financial statements.

In December 2023, the FASB

issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”, which requires disaggregated information

about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the

transparency and decision usefulness of income tax disclosures.

This ASU will be effective for the annual period ending December 31, 2025.

The Company is currently evaluating the timing and impacts of adoption of this ASU.

In June 2016, the FASB issued

ASU 2016-12, “Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments”, which

requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience,

current conditions, and reasonable and supportable forecasts.

ASU 2016-13 also requires additional disclosures regarding significant estimates

and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio.

The Company adopted the provisions of this guidance with effect from January 1, 2023.

The adoption did not have a material impact on the

Company’s consolidated financial statements.

Management does not believe

that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the

Company’s financial statements.

NOTE 3 – INITIAL PUBLIC OFFERING

Pursuant to the Initial Public

Offering, the Company offered for sale up to 15,000,000 Units (or 17,250,000 Units if the underwriters’ over-allotment option is

exercised in full) at a purchase price of $ 10.00 per Unit.

Each Unit consists of one ordinary share and one warrant (“ Public

Each Public Warrant will entitle the holder to purchase one ordinary share at an exercise price of $ 11.50 per share,

subject to adjustment.

On September 13, 2021, the

underwriters fully exercised their over-allotment option and purchased an additional 2,250,000 Units, generating additional gross proceeds

of approximately $ 22.50 million, and incurring additional cash underwriting discount of approximately $ 0.45 million.

In connection with

the sale of Units pursuant to the over-allotment option, the Company sold an additional 900,000 Private Warrants to the Sponsor and the

underwriters generating additional gross proceeds of approximately $ 0.90 million.

A total of approximately $ 23.4 million of the net proceeds

was deposited into the Trust Account, bringing the aggregate proceeds held in the Trust Account to approximately $ 175.95 million.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Debt (continued)

Note 3 – Incurred by Oxus.

The related expenses were recognized by Oxus and resulted in a reduction of contributed equity at the Reverse Recapitalization.

Note 3 was issued in the original principal amount of $ 1,980,000 .

The note matures in June 2025, and bears interest at 8 % per annum.

Note 4 – Incurred by Oxus.

The related expenses were recognized by Oxus and resulted in a reduction of contributed equity at the Reverse Recapitalization.

Note 4 was issued in the original principal amount of $ 7,601,661 .

The note matures in February 2026, is non-interest bearing and payable to a related party.

Debt balances outstanding as of December 31, 2024 are due as follows:

$ 5,767,000 in 2025 and $ 25,267,000 in 2026;

and $ 0 in 2028.

The Company accounts for income taxes using the liability method.

Deferred income tax assets and liabilities are determined based on differences between the financial statement and income tax basis of the respective assets and liabilities, using enacted tax rates in effect for the years when the differences are expected to reverse.

Borealis is taxed under Canadian tax laws at a rate of 26.5%.

Borealis does not file a consolidated tax return.

PGF, PGF RE I, and PGF RE II (the “United States subsidiaries”) are taxed as C corporations, with a statutory rate of 21%.

For the years ended December 31, 2024 and 2023, the benefit (provision) for income taxes consisted of the following:

United States $ ( 14,948 ) $ ( 15,092 )

Foreign 43,540 —

28,592 ( 15,092 )

United States ( 19,547,583 ) ( 13,593,974 )

Foreign ( 2,590,119 ) ( 1,218,393 )

Valuation allowance for unrealizable net deferred tax assets 22,244,011 15,163,490

106,309 351,123

Benefit (Provision) for income taxes $ 134,901 $ 336,031

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 3 – INITIAL PUBLIC OFFERING (Continued)

In connection with the Initial

Public Offering, the Company granted the underwriters an option to purchase 2,250,000 shares of the Company’s ordinary share at

the Initial Public Offering price, or $ 10.00 per share, for 45 days commencing on September 8, 2021 (grant date).

Since this option extended

beyond the closing of the Initial Public Offering, this option feature represented a call option that was accounted for under ASC 480,

Distinguishing Liabilities from Equity.

Accordingly, the call option has been separately accounted for at a fair value with the change

in fair value between the grant date and September 13, 2021 recorded as other income.

The Company used the Black-Scholes valuation model

to determine the fair value of the call option at the grant date and again at September 13, 2021 (refer to Note 8 for fair value information).

NOTE 4 – PRIVATE WARRANTS

Concurrently with the closing

of the Initial Public Offering, the Sponsor and the underwriters purchased an aggregate of 8,400,000 Private Warrants, generating gross

proceeds of $ 8.40 million in aggregate in a private placement.

Each Private Warrant is exercisable for one ordinary share at a price of

$ 11.50 per share, subject to adjustment.

As a result of the underwriters’

election to fully exercise their over-allotment option on September 13, 2021, the Sponsor and the underwriters and its designees purchased

an additional 900,000 Private Warrants, at a purchase price of $ 1.00 per Private Warrant.

NOTE 5 – RELATED PARTY TRANSACTIONS

Founder Shares

During the period from February

3, 2021 (inception) through March 22, 2021, the Sponsor paid $ 25,000 to cover certain formation and offering costs of the Company in consideration

for 8,625,000 shares of Class B ordinary shares (the “ Founder Shares ”).

The Founder Shares include

an aggregate of up to 1,125,000 Class B ordinary shares subject to forfeiture by the Sponsor to the extent that the underwriters’

over-allotment is not exercised in full or in part, so that the number of Founder Shares will collectively represent 20 % of the Company’s

issued and outstanding shares upon the completion of the Initial Public Offering.

The allocation of the Founder

Shares to the director nominees is in the scope of FASB ASC Topic 718, “Compensation-Stock Compensation” (“ ASC 718 ”).

Under ASC 718, stock-based compensation associated with equity-classified awards is measured at fair value upon the grant date.

value of the 150,000 Founder Shares granted to the Company’s independent director nominees in July 2021 was $ 0.38 million or $ 2.54

The Founder Shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination).

expense related to the Founder Shares is recognized only when the performance condition is met under the applicable accounting literature

in this circumstance.

The fair value of the allocated Founder Shares was measured at fair value using a Black Scholes simulation model.

On May 31, 2022, Mr.

Ivashkovsky resigned from his position as independent director within the Company and returned 50,000 Founder Shares to the Sponsor.

June 1, 2022, Mr.

Karim Zahmoul was appointed as independent director.

On June 7, 2022, 50,000 Founder Shares were transferred to Mr.

Karim Zahmoul by the Sponsor.

The fair value of the 50,000 Founder Shares granted to the Mr.

Karim Zahmoul on June 7, 2022 was $ 0.02 million

or $ 0.33 per share.

The Founder Shares were granted subject to a performance condition (i.e., the occurrence of a Business Combination).

Compensation expense related to the Founder Shares is recognized only when the performance condition is met under the applicable accounting

literature in this circumstance.

The fair value of the allocated Founder Shares was measured at fair value using a Monte Carlo simulation

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Income Taxes (continued)

Deferred income tax assets are recognized to the extent it is probable that the temporary differences and unused net operating tax losses will be realized.

The realization of deferred income tax assets is reviewed each reporting period and includes the consideration of historical operating results, projected future taxable income (exclusive of reversing temporary differences and carryforwards), the scheduled reversal of deferred income tax liabilities, and potential tax planning strategies.

At December 31, 2024 and 2023, deferred income tax assets and liabilities consisted of the following:

Net operating losses carried forward $ 26,153,662 $ 18,480,361

Other deferred tax assets 294,263 371,565

Deferred income tax assets $ 26,447,925 18,851,926

Property, plant and equipment ( 5,663,837 ) ( 5,254,669 )

Deferred income tax liabilities ( 5,663,837 ) ( 5,254,669 )

Valuation allowance for unrealizable net deferred tax assets ( 22,244,011 ) ( 15,163,490 )

Net deferred income taxes ( 1,459,923 ) ( 1,566,233 )

Due to net operating losses, the Company was in a net deferred tax asset position, but because of the uncertainty of realization, the Company has fully reserved the net deferred income tax asset as of December 31, 2024.

The effective income tax rate differs from the federal statutory income tax rate for 2024 and 2023 as follows:

Tax (benefit) at the statutory rate 21.00 % 21.00 %

State rate (net of federal benefit) 3.23 % 2.50 %

Change in valuation allowance for net deferred taxes ( 27.81 ) % ( 26.70 ) %

Foreign tax rate difference 1.39 % 2.00 %

All other 1.77 % — %

Effective rate ( 0.42 ) % ( 1.20 ) %

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL

NOTE 5 – RELATED PARTY TRANSACTIONS (Continued)

Founder Shares (Continued)

As of December 31, 2023, the

Company determined the performance conditions had not been met, and, therefore, no stock-based compensation expense has been recognized.

Stock-based compensation would be recognized at the date the performance conditions are met (i.e., upon consummation of a Business Combination)

in an amount equal to the number of Founder Shares vested times the grant date fair value per share (unless subsequently modified) less

the amount initially received for the purchase of the Founder Shares.

Through July 2021, the Sponsor

surrendered an aggregate 4,312,500 Founder Shares to the Company for no consideration.

All shares and associated amounts have been retroactively

adjusted to reflect the share surrender.

On September 13, 2021, no

Class B ordinary share was available for forfeiture as a result of the underwriters’ full exercise of the over-allotment option.

Founder Shares are subject

to lock-up until (i) with respect to 50 % of the Founder Shares, the earlier of one year after the date of the consummation of the initial

Business Combination and the date on which the closing price of the Class A ordinary shares equals or exceeds $ 12.00 per share (as adjusted

for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within a 30-trading day period commencing

after the consummation of the initial Business Combination and (ii) with respect to the remaining 50 % of the Founder Shares, the one-year

anniversary of the consummation of the initial Business Combination.

Notwithstanding the foregoing, the Founder Shares will be releases

earlier if, subsequent to the initial Business Combination, the Company consummates a liquidation, merger, share exchange or other similar

transaction which results in all of the shareholders having the right to exchange their ordinary shares for cash, securities or other

On April 5, 2023, in accordance

with the provisions of the Memorandum and Articles of Association, the Sponsor exercised its right to convert 1,500,000 shares of Class

B ordinary shares, par value $ 0.0001 per share, of the Company into 1,500,000 shares of Class A ordinary shares, par value $ 0.0001 per

share, of the Company on a one-for-one basis.

As of balance sheet date,

following conversion, there were 2,812,500 Founder Shares issued and outstanding.

Underwriter Founder Shares

On March 23, 2021, the Company

had issued to its underwriters and/or its designees, an aggregate of 400,000 shares of Class A ordinary shares at $ 0.0001 per share (“ Underwriter

Founder Shares ”).

The holders of the Underwriter Founder Shares have agreed not to transfer, assign or sell any such shares

until the completion of a Business Combination.

In addition, the holders have agreed (i) to waive their redemption rights with respect

to such shares in connection with the completion of a Business Combination and (ii) to waive their rights to liquidating distributions

from the Trust Account with respect to such shares if the Company fails to complete a Business Combination within the Combination Period.

Through June 2021, the underwriters

and/or its designees surrendered an aggregate of 100,000 Underwriter Founder Shares to the Company for no consideration, resulting in

a decrease in the total number of Class A ordinary shares outstanding from 400,000 to 300,000 .

All shares and associated amounts have

been retroactively adjusted to reflect the share surrender.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Income Taxes (continued)

PGF, PGF RE I, and PGF RE II (United States subsidiaries) had net operating loss carryforwards of approximately $ 26,154,000 for federal and state income tax reporting purposes at December 31, 2024.

Net operating loss carryforwards for federal income tax purposes do not expire under United States tax laws.

Net operating loss carryforwards for state income tax reporting purposes begin to expire in 2039.

Transactions for which tax deductibility or the timing of tax deductibility is uncertain are analyzed by management based on their technical characteristics.

The Company recognizes accrued interest and penalties, if any, related to uncertain tax positions in income tax expense.

Management has determined that the Company does not have any uncertain tax positions or associated unrecognized tax benefits that materially impact the

consolidated financial statements or related disclosures.

As a result, at December 31, 2024, the Company did not have a liability for unrecognized tax benefits, interest or penalties under United States or Canadian tax law.

The Company paid no penalties for the year ending December 31, 2024.

The Company files income tax returns in the Canadian and U.S.

federal jurisdictions, and in South Carolina.

The Company is no longer subject to U.S.

federal, state and local, or non-U.S.

income tax examinations by tax authorities for years before 2021.

There are no tax examinations currently in progress.

Contingencies

From time to time, the Company is involved in legal proceedings in the normal course of business.

Management does not believe that the final resolution of any such legal proceedings will have a material effect on the consolidated financial position or results of operations of the Company.

The Company leases certain equipment from third-parties.

The determination of whether an arrangement is a lease is made at the lease’s inception.

In accordance with US GAAP, a contract is (or contains) a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Control is defined as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset.

Management only reassesses its determination if the terms and conditions of the contract are changed.

Right-of-use (“ ROU ”) assets represent the Company’s right to use an underlying asset for the lease term, and lease obligations represent the Company’s obligation to make lease payments over that term.

ROU assets and lease obligations are recognized at the lease commencement date based on the present value of lease payments calculated using the implicit rate when it is readily determinable.

In the absence of an implicit rate, management may use the Company’s incremental borrowing rate based on the information available at lease commencement.

The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised.

ROU assets associated with operating leases recorded net of accumulated amortization were approximately $ 64,000 and $ 108,000 as of December 31, 2024 and December 31, 2023, respectively.

ROU assets associated with finance leases recorded net of accumulated amortization of approximately $ 1,390,000 and $ 2,027,000 at

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5 – RELATED PARTY TRANSACTIONS (Continued)

Promissory Note — Related Party

On March 22, 2021, the Sponsor

issued an unsecured promissory note to the Company (the “ Promissory Note ”), pursuant to which the Company may borrow

up to an aggregate principal amount of $ 0.30 million.

The Promissory Note is non-interest bearing and payable on the earlier of June 30,

2021 or the consummation of the Initial Public Offering.

On June 25, 2021, the terms

of the Promissory Note were revised to be payable on or the earlier of December 31, 2021, or the consummation of the Proposed Public Offering.

On September 8, 2021, the

outstanding balance of $ 0.28 million was repaid in full and is no longer available.

Related Party Loans

In addition, in order to finance

transaction costs in connection with a Business Combination, the Sponsor, an affiliate of the Sponsor, or certain of the Company’s

officers and directors or their affiliates may, but are not obligated to, loan the Company funds as may be required (“ Working

Capital Loans ”).

If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the

proceeds of the Trust Account released to the Company.

Otherwise, the Working Capital Loans would be repaid only out of funds held outside

the Trust Account.

In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the

Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital

The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s

discretion, up to $ 1.5 million of such Working Capital Loans may be convertible into warrants of the post Business Combination entity.

The warrants would be identical to the Private Warrants.

Except for the foregoing, the terms of such Working Capital Loans, if any, have

not been determined and no written agreements exist with respect to such loans.

On September 8, 2022, the Company

issued a promissory note for up to approximately $ 1.5 million (the “ Note ”) to the Sponsor.

The Note is non-interest

The principal balance of Note shall be payable on the date of a merger, share exchange, asset acquisition, share purchase, reorganization

or similar Business Combination involving the Maker (as defined therein) and one or more businesses (such date the “ Maturity

The arrangement did not include any conversion feature.

As of December 31, 2022, $ 1.5 million was drawn under the Note.

On February 28, 2023, the Note

was amended to increase its principal amount to $ 3.5 million (the “ Amended Note ”).

The Amended Note remains payable

at Maturity Date and is non-interest bearing.

The principal balance of Note shall be payable on the date of a merger, share exchange,

asset acquisition, share purchase, reorganization or similar Business Combination involving the Maker and one or more businesses (such

date the “ Maturity Date ”).

The arrangement did not include any conversion feature.

In March 2023, $ 0.3 million

was funded through the Amended Note, out of which $ 0.18 million was deposited in the Trust Account as the Extension Loan (defined below)

and $ 0.12 million was for working capital purposes.

From April to June 2023, $ 0.9

million was funded through the Amended Note, out of which $ 0.12 million was deposited into the Trust Account as an Extension Loan and

$ 0.78 million was kept for working capital purposes.

In addition, $ 0.15 million was repaid to the Sponsor.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Leases (continued)

December 31, 2024 and 2023, respectively, and are included with property, plant and equipment, net.

The Company recognized interest expense on its lease obligations of approximately $ 417,000 and $ 482,000 during the years ended December 31, 2024 and 2023, respectively.

For the years ended December 31, 2024 and 2023, the Company recognized rent expense associated with leases as follows:

Operating lease cost:

Fixed rent expense $ 44,643 $ 51,088

Finance lease cost:

Amortization of ROU assets 636,034 636,034

Net lease cost $ 680,677 $ 687,122

Lease cost - SG&A $ 44,643 $ 51,088

Lease cost - Depreciation and Amortization 636,034 636,034

Net lease cost $ 680,677 $ 687,122

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 5 – RELATED PARTY TRANSACTIONS (Continued)

Amended Note (Continued)

From July to September 2023,

$ 0.8 million was funded through the Amended Note, out of which $ 0.12 million was deposited into the Trust Account as an Extension Loan

and $ 0.68 million was kept for working capital purposes.

On October 2, 2023, the Company

entered into the Second Amended and Restated Promissory Note (the “ Second Amended Note ”) with the Sponsor pursuant

to which the Company may borrow up to an aggregate principal amount of $ 6 million.

The Second Amended Note, amended, replaced and superseded

in its entirety the Amended Note and any unpaid principal balance of the indebtedness evidenced by the Amended Note has been merged into

and evidenced by the Second Amended Note.

The Second Amended Note is non-interest bearing and due on the date on which the Company consummates

its initial business combination.

If the Company completes a business combination, it would repay any loaned amounts, without interest,

upon consummation of the business combination.

In the event that a business combination does not close, the Company may use a portion

of the working capital held outside the Trust Account to repay any loaned amounts but no proceeds from its Trust Account would be used

for such repayment.

On October 16, 2023, $ 0.1

million was drawn under the Second Amended Note, followed by a further draw down of $ 0.3 million on October 24, 2023.

A portion of these funds in an amount of $ 120,000 was used to fund the Extension

From October to December 2023, $ 0.64 million was

funded through the Amended Note, out of which $ 0.17 million was deposited into the Trust Account as an Extension Loan and $ 0.47 million

was kept for working capital purposes.

As of December 3 1,

2023, $ 4 million was ou tstanding under the Amended Note, which comprises the entire balance of the Promissory Note – Related

Party on the balance sheet as of December 31, 2023.

Extension Funds

The Sponsor has agreed to loan the Company (i) the lesser of (a) an

aggregate of $0.18 million or (b) $0.12 per public share that remain outstanding and is not redeemed in connection with the Extension

plus (ii) the lesser of (a) an aggregate of $60,000 or (b) $0.04 per public share that remain outstanding and is not redeemed in connection

with the Extension for each of the six subsequent calendar months commencing on June 8, 2023 (the “ Extension Loan ”),

which amount will be deposited into the Trust Account.

On March 3, 2023, $ 0.18 million was deposited into the Trust Account as the initial

deposit of the Extension Loan, which was funded through the Amended Note.

On May 25 and June 13, 2023, $ 0.06 million was deposited into

the Trust Account, respectively.

On July 31 and August 31, 2023, $ 0.06 million was deposited into the Trust Account, respectively.

October 10, 2023 and October 30, 2023, $ 0.06 million was deposited into the Trust Account, respectively.

On December 11, 2023 and January

3, 2024, $ 0.05 million was deposited into the Trust Account, respectively.

As of December 31, 2023, the amount outstanding was $ 0.59 million.

New Oxus Shares

On September 22, 2023, the

Sponsor entered into incentive agreements with each of Kanat Mynzhanov, the Chief Executive Officer of the Company (the “ CEO ”)

and Askar Mametov, the Chief Financial Officer of the Company (the “ CFO ”), pursuant to which, solely upon and subject

to successful completion of the Business Combination, the Sponsor will transfer to the CEO, 200,000 of its shares of the New Oxus and

to the CFO, 50,000 of its shares of New Oxus.

Under ASC 718, stock-based

compensation associated with equity-classified awards is measured at fair value upon the grant date.

The fair value of these shares at

September 22, 2023 was $ 2.73 million or $ 10.91 per share.

The Class A shares were granted subject to a performance condition (i.e., the

consummation of a Business Combination).

Compensation expense related to the transfer of New Oxus shares is recognized only when the performance

condition is met under the applicable accounting literature in this circumstance.

The closing share price of the Class A shares of the

Company on the grant date was determined to be fair value.

KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Related Party Payable

At close of the Initial

Public Offering, the operating bank account of the Company held an excess of $ 0.86 million, resulting from an over funding in

connection with the close of the Initial Public Offering.

On September 9, 2021, the over funding was returned to the Sponsor.

December 31, 2023, $ 0.07 million was due to the Sponsor in connection with professional fees paid on behalf of the Company, after

the repayment of an amount of $ 0.10 million to the Sponsor, in connection to an over-funding.

As of December 31, 2022, $ 0.16 million

was outstanding, which comprised of $ 0.06 million due to the Sponsor in connection with professional fees paid on behalf of the

Company, in addition of an amount of $ 0.10 million in connection to an over-funding.

Administrative Support Agreement

The Company has agreed to

pay the Sponsor a total of up to $ 10,000 per month in the aggregate for up to 18 months for office space, utilities and secretarial and

administrative support.

Services commenced on the date the securities were first listed on the Nasdaq and will terminate upon the earlier

of the consummation by the Company of a Business Combination or the liquidation of the Company.

This arrangement was further extended

to June 8, 2024 (refer to Note 1 for details).

For the year ended December

31, 2023, the Company incurred $ 0.12 million for these services, of which such amount is included in the operating costs

on the accompanying statements of operations.

For the year ended December 31, 2022, the Company

incurred $ 0.12 million for these services, of which such amount is included in the operating costs on the accompanying statements

of operations.

Registration Rights

Pursuant to the Registration

Rights Agreement entered into on September 2, 2021, the holders of the Founder Shares, Private Warrants, and warrants that may be issued

upon conversion of Working Capital Loans (and any ordinary shares issuable upon the exercise of the Private Warrants or warrants issued

upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration requiring the Company

to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A ordinary shares).

The holders of these securities will be entitled to make up to three demands, excluding short form registration demands, that the Company

In addition, the holders will have certain “piggy-back” registration rights with respect to registration

statements filed subsequent to the completion of a Business Combination.

The Company will bear the expenses incurred in connection with

the filing of any such registration statements.

Business Combination Marketing Agreement

The Company has engaged

the Underwriters as advisors in connection with a Business Combination to assist the Company in holding meetings with its

shareholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to

potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination,

assist the Company in obtaining shareholder approval for the Business Combination and assist the Company with its press releases and

public filings in connection with the Business Combination.

The Company will pay the Underwriters a cash fee for

such services upon the consummation of a Business Combination of $ 5.2 million that equals to 3.0 % of the gross proceeds of Initial

Public Offering (exclusive of any applicable finders’ fees which might become payable).

Legal Success Fee

As a contingent arrangement,

an additional fee up to $ 0.2 million is payable to the Company’s legal counsel in the event that the Company completes a Business

Advisory Service Agreement

On January 16, 2024, the Company

entered into an agreement with IB Capital LLC (“IB CAP”) for advisory services, with the term beginning on January 16, 2024

(“the Effective Term Date ”) and ending upon upon the earlier of (i) the consummation of the Business Combination or

(ii) three (3) months from the Effective Date (the “ Term End Date ”), stipulating a payment of $ 0.1 million at Effective

Term Date, followed by $ 0.14 million payment on the Term End Date.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Leases (continued)

ROU assets and lease liabilities consist of the following as of December 31, 2024:

Operating leases - ROU assets:

Operating lease, ROU assets, gross $ 179,849 $ 179,849

Accumulated amortization $ ( 116,023 ) $ ( 71,380 )

Operating leases - ROU assets, net $ 63,826 $ 108,469

Operating lease liabilities:

Operating leases, current portion $ 55,116 $ 43,794

Operating leases, non-current portion $ 12,015 $ 71,119

Total operating lease liabilities $ 67,131 $ 114,913

Finance leases, ROU assets:

Property and equipment, gross $ 3,180,169 $ 3,180,169

Accumulated depreciation $ ( 1,789,691 ) $ ( 1,153,657 )

Finance leases, ROU assets, net $ 1,390,478 $ 2,026,512

Finance lease liabilities:

Finance leases payable, current portion $ 538,845 $ 565,353

Finance leases payable, non-current portion $ 1,143,829 $ 1,683,308

Total finance lease liabilities:

$ 1,682,674 $ 2,248,661

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL

NOTE 7 – SHAREHOLDERS’ DEFICIT

Preferred Shares

The Company is authorized to issue 5,000,000 preferred

shares with a par value of $ 0.0001 per preferred share.

On December 31, 2023, and December 31, 2022, there were no shares of preferred

stock issued or outstanding.

Class A Ordinary Shares

The Company is authorized

to issue up to 500,000,000 shares of Class A ordinary shares, with a par value of $ 0.0001 per share.

Holders of the Company’s ordinary

shares are entitled to one vote for each share.

Through December 31, 2021, the underwriters and/or its designees effected a surrender

of an aggregate of 100,000 Class A ordinary shares to the Company for no consideration, resulting in a decrease in the total number of

Class A ordinary shares outstanding from 400,000 to 300,000 .

All shares and associated amounts have been retroactively adjusted to reflect

the share surrender.

On April 5, 2023, in accordance

with the provisions of the Memorandum and Articles of Association, the Sponsor exercised its right to convert 1,500,000 shares of Class

B ordinary shares, par value $ 0.0001 per share, of the Company into 1,500,000 shares of Class A ordinary shares, par value $ 0.0001 per

share, of the Company on a one-for-one basis.

As of December 31, 2023 there were 1,800,000

non-redeemable shares of Class A ordinary shares issued and outstanding, and as of December 31, 2022, there were 300,000 non-redeemable

shares of Class A ordinary shares issued and outstanding.

This number excludes 1,939,631 shares of Class A ordinary shares as of December

31, 2023 and 17,250,000 shares of Class A ordinary shares as of December 31, 2022, that were outstanding and subject to possible redemption.

Class B Ordinary Shares

The Company is authorized

to issue 50,000,000 Class B ordinary shares, with a par value of $ 0.0001 per share.

Holders of the Class B ordinary shares are entitled

to one vote for each share.

Through December 31, 2021, the Sponsor effected a surrender of an aggregate of 4,312,500 Class B ordinary

shares to the Company for no consideration, resulting in a decrease in the total number of Class B ordinary shares outstanding from 8,625,000

to 4,312,500 .

All shares and associated amounts have been retroactively adjusted to reflect the share surrender.

Holders of Class A ordinary

shares and holders of Class B ordinary shares, voting together as a single class, shall have the exclusive right to vote for the election

of directors and on all other matters submitted to a vote of the Company’s shareholder except as otherwise required by law.

shares of Class B ordinary shares will automatically convert into shares of Class A ordinary shares on a one-for-one basis (A) at any

time and from time to time at the option of the holder thereof and (B) automatically on the business day following the closing of the

Business Combination, subject to adjustment.

In the case that additional shares of Class A ordinary shares, or equity-linked securities,

are issued or deemed issued in excess of the amounts offered in the closing of a Business Combination, the ratio at which shares of Class

B ordinary shares shall convert into shares of Class A ordinary shares will be adjusted (unless the holders of a majority of the outstanding

shares of Class B ordinary shares agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number

of shares of Class A ordinary shares issuable upon conversion of all shares of Class B ordinary shares will equal, in the aggregate, on

an as-converted basis, 25 % of the sum of the total number of all ordinary shares outstanding upon the completion of the Initial Public

Offering plus all shares of Class A ordinary shares and equity-linked securities issued or deemed issued in connection with a Business

In addition, the calculation mentioned above will be subject to adjustment for stock splits, stock dividends, reorganizations,

recapitalizations and the like.

In no event will the Class B ordinary shares convert into Class A ordinary shares at a rate of less than

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Leases (continued)

Future minimum payments due under operating and finance leases as of December 31, 2024 consisted of the following:

December 31, Operating Leases Finance Leases

2025 $ 54,050 $ 823,266

2026 22,521 797,248

2027 — 532,713

Total 76,571 2,153,227

effect of discounting ( 9,440 ) ( 470,553 )

Lease liability recognized $ 67,131 $ 1,682,674

As of December 31, 2024 the weighted average remaining lease term and weighted average discount rate for operating leases was 1.41 years and 10.00 %, respectively.

As of December 31, 2023 the weighted average remaining lease term and weighted average discount rate for operating leases was 2.41 years and 10.00 %, respectively.

As of December 31, 2024 the weighted average remaining lease term and weighted average discount rate for finance leases was 2.64 years and 18.89 %, respectively.

As of December 31, 2023 the weighted average remaining lease term and weighted average discount rate for finance leases was 3.14 years and 18.53 %, respectively.

The following represents a summary of warrants outstanding and exercisable on December 31, 2024:

Description Issue Date Classification Exercise Price Expiration Date Outstanding Shares Exercisable Shares

Private Placement Warrants 9/13/2021 Equity $ 11.50 2/7/2029 9,300,000 9,300,000

Public Warrants 9/13/2021 Equity $ 11.50 2/7/2029 17,250,000 17,250,000

26,550,000 26,550,000

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

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 7 – SHAREHOLDERS’ DEFICIT (Continued)

Class B Ordinary Shares (Continued)

On April 5, 2023, in accordance

with the provisions of the Memorandum and Articles of Association of the Company, the Sponsor exercised its right to convert 1,500,000

shares of Class B ordinary shares, par value $ 0.0001 per share, of the Company into 1,500,000 shares of Class A ordinary shares, par value

$ 0.0001 per share, of the Company on a one-for-one basis.

As of December 31, 2023, there

were 2,812,500 shares of Class B ordinary shares issued and outstanding.

As of December 31, 2022, there were 4,312,500 shares of Class

B ordinary shares issued and outstanding.

Public Warrants may only be

exercised for a whole number of shares.

No fractional shares will be issued upon exercise of the Public Warrants.

The Public Warrants

will become exercisable on the later of (a) 30 days after the completion of a Business Combination and (b) 12 months from the closing

of the Initial Public Offering.

Redemption of Warrants When

the Price per Share of Class A Ordinary shares Equals or Exceeds $ 18.00 — once the warrants become exercisable, the Company may

redeem the outstanding Public Warrants:

in whole and not in part;

● at a price of $ 0.01 per Public Warrant;

upon not less than 30 days’ prior written notice of redemption to each warrant holder;

● if, and only if, the last reported sale price of the Class A ordinary shares for any 20 trading days within a 30 trading day period ending three business days before sending the notice of redemption to warrant holders (the “Reference Value”) equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like).

In addition, if (x) the Company

issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of our initial

Business Combination at an issue price or effective issue price of less than $ 9.20 per share (with such issue price or effective issue

price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to our Sponsor or

its affiliates, without taking into account any, Founder Shares held by our Sponsor or such affiliates, as applicable, prior to such issuance)

(the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity

proceeds and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation

of the Company’s initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s

ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial

Business Combination (such price, the “ Market Value ”) is below $ 9.20 per share, the exercise price of the warrants

will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, and the $ 18.00

per share redemption trigger price described above in this section will be adjusted (to the nearest cent) to be equal to 180 % of the higher

of the Market Value and the Newly Issued Price.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Warrants (continued)

period commencing once the warrants become exercisable and ending on the third trading day prior to the date on which New Borealis gives proper notice of such redemption and provided certain other conditions are met.

The public warrants are identical to the 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.

Stock Option Plan

During 2022, the Company created a stock option plan (the “ Plan ”) that provides for the granting of options to certain employees for the purchase of the Company’s class D common shares.

The Plan provides for the grant of stock options for eligible employees as determined by the Board of Directors and does not guarantee employment rights.

During the years ended December 31, 2024 and 2023 the Company granted options to purchase 333,574 and 227,666 shares, respectively, of the Company’s common shares at an exercise price of $ 0.0001 per share.

The weighted-average grant date fair values of options granted was $ 0.60 per share.

The fair values of the stock-based awards granted were calculated with the following assumptions:

Risk-free interest rate 3.81 %

Expected term (years) 5 - 10

Expected volatility 80.00 %

Dividend yield 0.00 %

For the years ended December 31, 2024 and 2023, the Company recorded approximately $ 1,273,000 and $ 492,000 , respectively, of stock-based compensation expense.

On February 7, 2024, as a result of the Reverse Recapitalization (Note 1), 4,000,000 stock options were exercised and converted at an exchange ratio of 0.0661 into 264,400 shares of Newco Class A common stock.

This stock option plan was closed upon the business combination and a new equity incentive plan was approved and implemented as of February 7, 2024.

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION CORP.)

NOTES TO THE FINANCIAL STATEMENTS

NOTE 8 – FAIR VALUE MEASUREMENTS

The fair value of the Company’s

financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with

the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants

at the measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the

use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions

about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities

based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Observable inputs other than Level 1 inputs.

Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3 – Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.

The following table presents

information about the Company’s financial assets that are measured at fair value on a recurring basis as of December 31, 2023,

by level within the fair value hierarchy:

Marketable securities held in Trust Account

As of December 31, 2023 the amount $ 21.92 million includes

deposit in transit of $ 0.05 million.

The following table presents

information about the Company’s financial assets that are measured at fair value on a recurring basis as of December 31, 2022 by

level within the fair value hierarchy:

Marketable securities held in Trust Account

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Stock Option Plan (continued)

Stock option activity for the years ended December 31, 2024 and 2023 is summarized as follows:

Shares Weighted Average Exercise Price Weighted Remaining Contractual Life(Years)

Options outstanding at December 31, 2022 3,468,760 $ 0.0001 9.03

Granted 227,666 0.0001 —

Exercised — — —

Expired or forfeited ( 30,000 ) — —

Options outstanding at December 31, 2023 3,666,426 $ 0.0001 8.10

333,574 0.0001 8.10

( 4,000,000 ) 0.0001 —

Expired or forfeited

Options outstanding at December 31, 2024 — — —

Borealis Foods Inc.

(FORMERLY KNOWN AS OXUS ACQUISITION

NOTES TO THE FINANCIAL STATEMENTS

NOTE 9 – SUBSEQUENT EVENTS

The Company evaluated subsequent

events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued.

this review, the Company did not identify any subsequent events, other than already disclosed, that would have required adjustment or

disclosure in the financial statements.

On February 2, 2024, the Company

held an extraordinary general meeting of shareholders (the “ Second Extraordinary General Meeting ”) in connection with

the Transaction, whereby the holders of 1,886,751 Class A ordinary shares of the Company exercised their right to redeem such shares for

a pro rata portion of the funds in the Company’s trust account.

As a result, approximately $ 21.42 million (approximately $ 11.35

per share) was removed from the Company’s Trust Account to pay such shareholders.

On the Closing Date, the Transaction

was consummated, following shareholder approval at the Second Extraordinary General Meeting.

On February 6, 2024, a repayment of $ 0.95 million was made in connection

with the Second Amended Note.

On February 7, 2024, Borealis,

promises to pay to the order of the Sponsor or its registered assigns or successors in interest, or order, the principal sum of $ 7.60

million in lawful money of the United States of America.

No interest shall accrue on the unpaid principal balance of this Note.

Note amends, replaces, and supersedes in its entirety that certain Second Amended Note, dated October 2, 2023, made by the Company, in

favor of the sponsor, and the unpaid principal balance of the indebtedness evidenced by the Second Amended Note is being merged into and

will hereafter be evidenced by this Sponsor Note.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Earnings per share

Basic earnings or loss per share is based on the weighted average number of common shares outstanding for the period.

For the purposes of calculating diluted earnings per share, the number of shares outstanding has been adjusted for the dilutive effects of warrants.

Basic (loss) per share calculation Years Ended

December 31, 2024 December 31, 2023

Net (loss) available to common shareholders $ ( 25,327,198 ) $ ( 27,479,247 )

Weighted average common shares outstanding (basic) 20,309,934 10,750,060

Basis (loss) per share from net loss $ ( 1.25 ) $ ( 2.56 )

Diluted (loss) per share calculation

Net (loss) available to common shareholders $ ( 25,327,198 ) $ ( 27,479,247 )

Weighted average common shares outstanding (basic) 20,309,934 10,750,060

Weighted average common shares outstanding (diluted) 20,309,934 10,750,060

Diluted (loss) per share from net loss * $ ( 1.25 ) $ ( 2.56 )

*In periods where the Company has incurred a net loss, diluted earnings per share is based on the number of common shares issued and outstanding as including the effects of warrants would be anti-dilutive.

Segment Reporting

The Company has a single reportable segment focused around sale of similar products.

This reportable segment derives revenues from the manufacture and sale of high quality, affordable and nutritious ready to eat meals.

The Company’s chief operating decision-maker (the “ CODM ”), who is the chief executive officer, assesses performance for the reportable segment and decides how to allocate resources using net income (loss) as the primary measure of profitability.

The CODM is not regularly provided with specific segment expenses, but focuses on revenue, gross profit, and net income.

Expense information, including cost of sales can be easily computed from the provided information.

These segment (and consolidated) measures of profitability are shown in the consolidated statements of operations.

The measure of segment assets is reported on the consolidated balance sheets as total assets.

Subsequent Events

The Company evaluated events and transactions after December 31, 2024 through April 15, 2025, the date the consolidated financial statements were available to be issued, for subsequent events requiring disclosure in these financial statements.

Borealis Foods Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Subsequent Events (continued)

Kanat Mynzhanov’s tenure as SPAC nominee was set to expire on February 7, 2025, the one-year anniversary of the SPAC transaction between Oxus Acquisition Corp.

and Borealis Foods Inc.

On January 3, 2025, Mr.

Mynzhanov provided notice of his decision to resign from the Board of Directors (the “ Board ”) of Borealis Foods to focus on his ongoing responsibilities as CEO of Tavia Acquisition Corp.

Mynzhanov’s resignation was effective as of February 1, 2025 and did not result from any disagreement with the Company

concerning any matter relating to the Company’s operations, policies or practices.

The Company is actively seeking an industry veteran to replace Mr.

Mynzhanov on the Board.

Subsequent to year-end, the Chairman and Chief Executive Officer advanced funds to the Company in the amounts of $ 500,000 and $ 300,000 , respectively.

In addition, the Chief Executive Officer deferred approximately $ 125,000 in compensation during the first quarter of 2025, respectively.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data