Borealis Foods Inc. 10-K

Item 8. 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. Item 9. 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). Item 9.A. Controls and Procedures 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 39 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: 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 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. Item 9.B. Other Information. None . Item 9.C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. Part III Item 10. Directors, Executive Officers, and Corporate Governance. 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 40 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. Item 11. Executive Compensation. The information required by this Item will be included in the 2025 Proxy Statement and is incorporated herein by reference. I tem 12. 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. Item 13. Certain Relationships and Related Transactions, and Director Independence. 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. Item 14. Principal Accountant Fees and Services. 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. Part IV Item 15. Exhibits and Financial Statement Schedules (a)(1) 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. (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. Exhibit Number Description 2.1* + Business Combination Agreement, dated as of February 23, 2023, by and among Oxus Acquisition Corp., 1000397116 Ontario Inc., and Borealis Foods Inc. (incorporated by reference to Exhibit 2.1 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023). 2.2* + Amendment No. 1 to the Business Combination Agreement, dated as of August 11, 2023, by and among Oxus Acquisition Corp., 1000397116 Ontario Inc., and Borealis Foods Inc. (incorporated by reference to Exhibit 2.2 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023). 41 2.3* + Amendment No. 2 to the Business Combination Agreement, dated as of January 11, 2024, by and among Oxus Acquisition Corp., 1000397116 Ontario Inc., and Borealis Foods Inc. (included as Annex A to this proxy statement/prospectus) (incorporated by reference to Exhibit 2.3 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on January 12, 2024). 2.4* + Plan of Arrangement (Amended) (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). 3.1* Form of New Borealis By-Laws (incorporated by reference to Exhibit 10.9 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023). 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 10.1* + 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. 10 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023). 10.2* + Sponsor Support Agreement, dated as of February 23, 2023, by and among Oxus Acquisition Corp., Oxus Capital Pte. Ltd and Borealis Foods Inc. (incorporated by reference to Exhibit 10.11 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023). 10.3* Note Purchase Agreement, dated February 28, 2023, by and between Borealis Foods Inc. and Saule Algaziyeva (incorporated by reference to Exhibit 10.37 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023). 10.4* Note Purchase Agreement, dated February 8, 2023, by and between Borealis Foods Inc. and Belphar Ltd. (incorporated by reference to Exhibit 10.38 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023). 10.5* First Amendment to the Note Purchase Agreement, dated July 23, 2023 (incorporated by reference to Exhibit 10.41 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on November 13, 2023). 10.6* Note Purchase Agreement, dated November 15, 2023, by and between Borealis Foods Inc. and Aman Murat Baikdamuly (incorporated herein by reference to Exhibit 10.8 to Borealis Foods Inc.’s Form 8-K, filed with the SEC on February 13, 2024). 10.7* Note Purchase Agreement, dated January 30, 2024, by and between Borealis Foods Inc. and GSS Overseas LTD. (incorporated herein by reference to Exhibit 10.9 to Borealis Foods Inc.’s Form 8-K, filed with the SEC on February 13, 2024). 10.8* Second Amended and Restated Promissory Note, dated October 2, 2023 (incorporated by reference to Exhibit 10.40 to Oxus Acquisition Corp.’s Registration Statement on S-4/A, filed with the SEC on October 24, 2023). 10.9* Third Amended and Restated Promissory Note, dated February 7, 2024 (incorporated herein by reference to Exhibit 10.11 to Borealis Foods Inc.’s Form 8-K, filed with the SEC on February 13, 2024). 10.10* Form of Board Nomination Agreement, by and between Borealis Foods, Inc. and Belphar Ltd. (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). 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. 42 31.2 Certification of Principal Financial 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. 32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 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). * Previously filed. + 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. SIGNATURES 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. By: /s/ Reza Soltanzadeh Reza Soltanzadeh 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 Director 4/15/2025 Ertharin Cousin /s/ Shukhrat Ibragimov Director 4/15/2025 Shukhrat Ibragimov /s/ Steven Oyer Director 4/15/2025 Steven Oyer /s/ Shiv Vikram Khemka Director 4/15/2025 Shiv Vikram Khemka 43 BOREALIS FOODS INC. FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2024 Table of Contents PART I. FINANCIAL INFORMATION Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 52 ) 44 Financial Statements Consolidated Balance Sheets as of December 31, 2024 and 2023 45 Consolidated Statements of Operations for the Year s Ended December 31, 2024 and 2023 46 Consolidated Statements of Changes in Shareholders' Deficit for the Year s Ended December 31, 2024 and 202 3 47 Consolidated Statements of Cash Flows for the Year s Ended December 31, 2024 and 2023 49 Notes to Consolidated Financial Statements 51 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. 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 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 conducted our audits in accordance with the standards of the PCAOB. 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. 44 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. 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. (“Oxus”). 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 45 Borealis Foods Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2024 December 31, 2023 Assets Current Assets 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 Inventories, net 8,046,259 6,945,028 Prepaid expenses and other current assets 1,134,611 845,878 Total current assets 11,799,583 17,182,292 Property, plant and equipment, net 45,736,326 46,408,540 Intangible assets 319,307 — Right - of-use asset, net 63,826 108,469 Goodwill 1,917,356 1,917,356 Other non-current assets 169,685 169,685 Total assets $ 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 — 47,300,000 Notes payable, current portion, net of capitalized loan costs 5,456,934 681,121 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 Operating lease payable, net of current portion 12,015 71,119 Finance leases payable, net of current portion 1,143,829 1,683,308 Deferred tax liability 1,459,923 1,566,233 Total liabilities 60,701,969 87,133,637 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 See accompanying notes to the consolidated financial statements. 46 Borealis Foods Inc. 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. 47 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. 48 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: 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: 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 ) Cash flows from 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 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 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 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. 49 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 1. Description of Business and Summary of Significant Accounting Policies Overview 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 50 Borealis Foods Inc. 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. 51 Borealis Foods Inc. 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. Dollar. Estimates 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. 52 Borealis Foods Inc. 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. 53 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 (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. Loan Costs 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. Goodwill 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 recoverable. No impairment losses were recorded for the year ended December 31, 2024 and 2023. 54 Borealis Foods Inc. 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 55 Borealis Foods Inc. 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. Advertising 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. 56 Borealis Foods Inc. 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. 57 Borealis Foods Inc. 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: Level 1: Observable inputs, such as quoted market prices in active markets for the identical asset or liability that are accessible at the measurement date. Level 2: Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly for the asset or liability. Level 3: 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. 58 Borealis Foods Inc. 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. Warrants 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 59 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. 2. 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 60 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 3. 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 Less: accumulated depreciation ( 13,770,310 ) ( 11,373,085 ) $ 45,736,326 $ 46,408,540 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. 4. Debt 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. 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 3,787,585 common shares in connection with the consummation of the Reverse Recapitalization with Oxus. 61 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 4. 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. 62 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 4. 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; $ 0 in 2027; and $ 0 in 2028. 5. Income Taxes 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: 2024 2023 Current: United States $ ( 14,948 ) $ ( 15,092 ) Foreign 43,540 — 28,592 ( 15,092 ) Deferred: 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 63 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 5. 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: 2024 2023 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: 2024 2023 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 ) % 64 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 5. 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. 6. 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. 7. Leases 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 65 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 7. 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: 2024 2023 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 66 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 7. Leases (continued) ROU assets and lease liabilities consist of the following as of December 31, 2024: Operating leases - ROU assets: 2024 2023 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 67 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 7. Leases (continued) Future minimum payments due under operating and finance leases as of December 31, 2024 consisted of the following: Years Ending 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 Less: 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. 8. Warrants 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 68 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 8. 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. 9. 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. 69 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 9. 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 Options outstanding at December 31, 2023 3,666,426 $ 0.0001 8.10 Granted 333,574 0.0001 8.10 Exercised ( 4,000,000 ) 0.0001 — Expired or forfeited — — — Options outstanding at December 31, 2024 — — — 70 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 10. 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 Warrants — — 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. 11. 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. 12. 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. 71 Borealis Foods Inc. and Subsidiaries Notes to the Consolidated Financial Statements For the Years Ended December 31, 2024 and 2023 12. Subsequent Events (continued) Mr. 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. Mr. 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. 72