What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-06-02 compared with 2025-04-15 · 2086 added, 691 removed, 237 unchanged (92% 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.

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).

Company was notified that Carr, Riggs & Ingram, LLC (“CRI”) acquired, effective as of January 1, 2026, certain assets

related to the capital markets practice of Berkowitz Pollack Brant Advisors + CPAs, LLP (“BPB”).

In conjunction with this

transaction, on January 13, 2026, the Company received notification from BPB that they were resigning as the Company’s independent

registered public accounting firm, effective immediately.

On January 15, 2026, the Audit Committee of the Company’s Board of Directors

approved the appointment of CRI as the Company’s new independent registered public accounting firm.

audit reports on the Company’s consolidated financial statements for the fiscal years ended December 31, 2024 and December 31,

2023 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope,

or accounting principles, except as follows:

report on the consolidated financial statements of Borealis Foods Inc.

as of and for the years ended December 31, 2024 and 2023, contained

an emphasis of matter that described the following:

“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.”

During the fiscal years ended December 31, 2024 and December 31, 2023,

and through January 15, 2026, there were no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K) between the Company and

BPB on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements,

if not resolved to BPB’s satisfaction, would have caused BPB to make reference thereto in its reports.

During such periods, there

were no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K).

The Company has provided BPB with a copy of the disclosures

contained in this Item 9 and has requested that BPB furnish the Company with a letter addressed to the Securities and Exchange Commission

stating whether it agrees with the statements made by the Company in this Item 9.

A copy of such letter will be filed as Exhibit 16.1

to this Annual Report on Form 10-K.

were no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K).

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

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.

on effectiveness of controls and procedures

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.

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 the Company’s

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 the Company’s disclosure controls and procedures were not effective

at the reasonable assurance level due to the material weakness in internal control over financial reporting described below.

annual report on internal control over financial reporting

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.

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

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

of our company,

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

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.

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, 2025, due to the material weakness

described below

Material Weakness in Internal Control Over

Financial Reporting

A material weakness is a deficiency, or combination

of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement

of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with the preparation of the Company’s

consolidated financial statements for the fiscal year ended December 31, 2025, management identified the following material weakness

in the Company’s internal control over financial reporting:

Insufficient Accounting and Financial Reporting

Resources and Lack of Segregation of Duties

The Company does not employ a sufficient number

of qualified accounting and financial reporting personnel to allow for adequate segregation of duties and timely, independent review

of the Company’s financial statements and related disclosures.

As of December 31, 2025, the Company’s finance function consisted of five

full-time employees, including the Chief Financial Officer.

This staffing level is insufficient to maintain effective internal controls

given the complexity of the Company’s operations, capital structure, and reporting obligations as a public company.

As a result, the

Company lacks:

segregation of duties across the financial reporting close process, including the preparation,

review, and approval of journal entries, account reconciliations, and financial statement

internal resources to independently review and validate complex accounting judgments and

estimates, including those related to debt classification, related party transactions, going

concern assessments, and non-routine transactions;

controls over the completeness and accuracy of disclosures in the Company’s periodic reports

filed with the SEC, including the timely identification and reporting of transactions requiring

disclosure under the Exchange Act.

This material weakness contributed to the Company’s

inability to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 within the time period prescribed by the

Inadequate Controls Over Related Party Transactions

and Debt Covenant Compliance

The Company did not maintain effective controls

over the identification, authorization, and monitoring of related party transactions and the assessment of compliance with restrictive

covenants in its debt agreements.

During fiscal year 2025, the Company issued approximately $11.4 million in promissory notes to entities

controlled by its Chief Executive Officer and Non-Executive Chairman, and an additional $3.5 million in a promissory note to Oxus Capital

PTE Ltd., a beneficial owner of more than 5% of the Company’s outstanding Common Shares, without adequate processes to evaluate whether

the issuance of such notes complied with the debt incurrence restrictions of the Company’s then-existing Credit Agreement with Frontwell

Capital Partners Inc.

The issuance of these and other unsecured notes was subsequently identified as a contributing factor in the Events

of Default under the Frontwell Credit Agreement disclosed in Part I, Item 1.A, “Risk Factors.”

The Company’s controls were insufficient to

related party transactions were identified and submitted for Audit Committee review and approval

in advance of execution in all cases;

terms of proposed debt instruments were evaluated against the restrictive covenants of the

Company’s existing credit agreements before issuance;

received timely information regarding the cumulative principal amount and terms of related

party indebtedness outstanding at any given time.

Remediation Efforts

Management, with oversight from the Audit Committee,

is committed to remediating the material weakness described above.

The Company’s remediation plan includes the following

measures, which are in various stages of implementation:

additional qualified accounting and financial reporting personnel to provide appropriate

segregation of duties and improve the timeliness and quality of the Company’s financial reporting

the Company’s financial close procedures, including the implementation of detailed close

checklists, independent review protocols for journal entries and account reconciliations,

and formalized review of complex accounting judgments by the Chief Financial Officer and,

where appropriate, external advisors;

● strengthening

the Company’s policies and procedures for the identification, documentation, and pre-approval

of related party transactions, including requiring written confirmation of Audit Committee

approval prior to the execution of any related party financing arrangement;

● implementing

a covenant compliance monitoring process, including periodic tracking of compliance with

all material restrictive covenants under the Company’s debt agreements and reporting to the

Audit Committee on a quarterly basis;

external accounting and financial reporting advisors to assist with the preparation and review

of the Company’s periodic reports until the Company’s internal resources are adequate to

perform these functions independently.

While the Company has begun to implement these

measures, the material weakness will not be considered remediated until the applicable controls have been in operation for a sufficient

period of time and management has concluded, through testing, that the controls are operating effectively.

The Company cannot provide

assurance that these remediation efforts will be successful or that additional material weaknesses will not be identified in the future.

report of the registered public accounting firm

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.”

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, 2025 that have materially affected,

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

The material weakness described above existed

as of December 31, 2025 and throughout fiscal year 2025.

The remediation efforts described above commenced subsequent to December 31,

Other Information.

Disclosure of Information That Would Have Been Required to Be Reported on Form

During the fiscal quarter ended December 31, 2025,

the following events occurred that should have been or may have been required to be reported by the Company on a Current Report on Form

8-K but were not so reported on a timely basis:

Issuance of Promissory Notes.

19, 2025, the Company issued promissory notes in the aggregate principal amount of approximately $4.5 million to Z Ventures Inc.

and Barthelemy

Helg, each of whom is a related party, and a promissory note in the principal amount of $3.5 million to Oxus Capital PTE Ltd., a beneficial

owner of more than 5% of the Company’s outstanding Common Shares.

Each of the related party notes bears interest at 10% per annum.

notes were issued to fund working capital needs of the Company.

For additional information regarding these notes, see Item 13, “Certain

Relationships and Related Transactions, and Director Independence — Our Relationship with Reza Soltanzadeh, Barthelemy Helg, Z Ventures,

Zagros Alpine Capital ULC, and Oxus Capital PTE Ltd.” The forms of promissory note used in connection with these issuances are filed

as Exhibits 10.4 and 10.5 to this Annual Report.

Issuance of Warrant to EarlyBirdCapital, Inc.

On November 19, 2025, the Company issued a warrant to EarlyBirdCapital, Inc.

to purchase 250,000 Common Shares at an exercise price of

$2.50 per share, expiring November 19, 2028, in connection with the extension of a promissory note originally issued in connection with

the closing of the Company’s business combination transaction on February 7, 2024.

The warrant was issued in a private placement transaction

in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.

The warrant is filed

as Exhibit 4.3 to this Annual Report.

EarlyBirdCapital Escrow Shares.

2025, in connection with the extension of the EarlyBirdCapital, Inc.

promissory note described above, each of Mr.

(through Zagros Alpine Capital ULC) provided 500,000 Common Shares as collateral for the Company’s obligations under the note.

were placed into escrow with Continental Stock Transfer & Trust Company.

For additional information, see Item 13, “Certain Relationships

and Related Transactions, and Director Independence — EarlyBirdCapital Escrow Shares.”

The Company has implemented enhanced procedures

and is engaging additional resources to assist with the timely identification and reporting of events that may give rise to Form 8-K reporting

See Item 9.A, “Controls and Procedures,” for additional information regarding the Company’s identified material

weakness in internal control over financial reporting and the Company’s remediation efforts.

Insider Trading Arrangements

the quarter ended December 31, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated

a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item

408(a) of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

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

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.

The following table sets forth the information concerning our directors,

including their ages as of May 15, 2026.

Name and Position

Reza Soltanzadeh

Director, Chief Executive Officer

Ertharin Cousin

Barthelemy Helg

Non-executive Chairman and Director

Shukhrat Ibragimov

Pavel Mynzhanov

Zaure Algaziyeva*

Committee Financial Expert

Executive Officers

The following table sets forth information concerning our executive

officers, including their ages as of May 15, 2026.

Name and Position

Became Officer

Position/Title

Reza Soltanzadeh

Director and Chief Executive Officer

Pouneh Rahimi

Chief Legal Officer

Stephen Wegrzyn

Chief Financial Officer

Chief Strategy Officer

Chief Marketing Officer

Biographical Information

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.

Soltanzadeh 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.

Ertharin Cousin has served as a director of our Board

since February 2024.

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

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.

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 2019.

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 Companies;

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 as 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.

from the University of Georgia School of Law.

Cousin is qualified to

serve on the Board given her breadth of experience and track record in the food industry.

Her roles as President and Chief Executive Officer

of Food Systems For The Future Institute and as Executive Director of the United Nations World Food Programme, the food-assistance branch

of the United Nations, provide the Board with valuable perspective on global food systems, sustainability, and institutional operations

relevant to the Company’s business.

Barthelemy Helg is a co-founder and has served as the

Chairman of our Board of Directors since February 2024.

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 career as an investment banker at Goldman

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.

Shukhrat Ibragimov has served as a director of our Board

since February 2024.

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 March 2021.

Prior to his appointment to the Board of

Directors of ERG, Mr.

Ibragimov served as ERG’s Head of Business Development since 2015.

Ibragimov currently also serves as

member of the Boards of Directors of Eurasia Insurance Company JSC, Eurasian Financial Company JSC, Eurasian Bank JSC.

founded Eurasian Space Ventures LLP (ESV) based in Kazakhstan, venture fund investing in startups in aerospace industry.

Ibragimov controls BITEEU, a cryptocurrency exchange operating globally.

Ibragimov 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 a bachelor’s degree and the Beijing Language and Culture University with a masters’ degree.

Ibragimov is qualified

to serve on the Board due to his prior experience serving as head of business development for a global natural resource company, which

provided him with extensive cross border experience in logistics and operations.

Steven Oyer has served as a director of our Board since

February 2024.

He is also the Chair of the Audit Committee, the Compensation Committee and the Nomination and Governance Committee.

Board has determined that Mr.

Oyer qualifies as an “audit committee financial expert” as defined under Item 407(d)(5) of Regulation

Oyer is a finance executive who has over 40 years of business and investment experience.

Since January 2023, Mr.

Oyer has 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 February 2018 to January 2023.

From September 2015 to February 2018, Mr.

Oyer served as Senior Vice President

at Lazard Asset Management where he led their Global Family Office Advisory Group.

Oyer’s experience includes a senior position

at the Private Funds Group of Brookfield Asset Management focused on Real Assets and Renewable Investments.

Additionally, Mr.

as interim Chief Executive Officer and led the restructuring of Saflink Corporation, a NASDAQ listed biometric software company.

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.

He also has served as a member of the investment committee

for the Florida Atlantic University’s Foundation.

Oyer attended the University of Massachusetts.

Oyer is qualified to serve

on the Board due to his extensive financial and operational expertise, stemming from his prior experience serving as the CEO of i(x) Net

Zero and Saflink Corporation, both NASDAQ listed public companies.

Amin Ajami has served as a director of our Board since

January 2026.

He serves as a member of the Audit Committee, the Compensation Committee and the Nomination and Governance Committee of

The Board has determined that Mr.

Ajami qualifies as an “audit committee financial expert” as defined under

Item 407(d)(5) of Regulation S-K.

Ajami has more than 30 years of experience in investment banking, principal investments, mergers

and acquisitions, structured finance and capital markets transactions.

Since 2021, Mr.

Ajami has acted as a private investor and strategic

advisor, supporting and investing in growth-stage businesses and special situations across the energy, infrastructure, and agri-food sectors.

From 2015 to 2021, Mr.

Ajami served as Head of Strategic Investments and Senior Advisor to a UK-based private family office, where he

was responsible for evaluating investment opportunities, overseeing portfolio company expansion and exits, reviewing financial statements

and operating results, and assessing capital structure and financing arrangements.

His responsibilities included oversight of large-scale

energy and agri-food investments, securing debt and equity capital, and evaluating financial risks, internal controls, and performance

Prior to that, Mr.

Ajami held senior investment and advisory roles at Strand Partners (in London), Royal Capital PJSC (in Abu

Dhabi), Simon Robertson & Associates (in Hong Kong) and Asian Capital Partners (in Hong Kong), where he was involved in evaluating

and overseeing complex financial transactions, capital allocation, and investment performance .

He also served in a senior management

capacity in connection with the acquisition and structuring of Mangistaumunaigaz by PT Medco Energi Internasional Tbk, with responsibilities

relating to financial reporting, capital structure and internal controls.

Ajami began his career at Arthur Andersen, and subsequently

held a role at Daiwa Securities Group Inc., focusing on energy-related corporate finance and project finance transactions.

in Petroleum Engineering from Imperial College London and a B.Eng.

(Hons) in Aeronautical Engineering from Queen Mary University

The Board believes that Mr.

Ajami’s qualifications to serve as a director include his extensive experience in financial oversight,

investment management, mergers and acquisitions, capital markets transactions and strategic advisory activities.

In particular, his experience

in evaluating financial statements, overseeing internal controls, and assessing capital structure and financing arrangements across multiple

industries supports his role on the Audit Committee and his designation as an audit committee financial expert.

Zaure Algaziyeva has served as a director of our Board

since May 2026.

Algaziyeva is a senior executive with over 20 years of experience across FMCG production, logistics, and financial

She has served as Deputy General Director of First Brewery LLP since 2007, where she oversees large-scale production and distribution

of beer and soft drinks.

In parallel, she has been Director of Baza Brewery LLP since 2018, leading the development of craft beverage

production and a Member of the Supervisory Board of Caravan Beverages Group LLP, contributing to strategic oversight of import and distribution

operations in the beverage sector.

Earlier in her career, Ms.

Algaziyeva served as Chairman of the Board of Directors of Senim Bank JSC

from 2008 to 2013, where she led governance and strategic direction of the institution.

She began her professional career at Kazkommertsbank

JSC in the International Institutions Department, focusing on international funding, trade finance, securitization, and capital markets

transactions, including IPO-related activities.

Algaziyeva holds a degree in International Economic Affairs from the Kazakh Academy

of Management (Narxoz) and an MSc in Banking and Finance from Loughborough University (UK).

The Board believes that Ms.

extensive experience in FMCG production, logistics, banking, and international finance qualifies her to serve as a director.

Pavel Mynzhanov has served as a director of our Board

since May 2026.

Mynzhanov has served as Chief Executive Officer of Fincraft Energy Holding Limited since November 2025.

Prior thereto,

from December 2019 to January 2026, Mr.

Mynzhanov served as Vice President of Fincraft Group LLP, where he was involved in investment

and corporate finance activities across multiple sectors.

Since June 2022, Mr.

Mynzhanov has served as a Director of Oxus Capital PTE.

Oxus Capital PTE Ltd.

is the lender under the Company’s Credit Agreement described in Item 13, “Certain Relationships and Related

Transactions, and Director Independence.” The Board believes that Mr.

Mynzhanov’s experience in investment management, corporate

finance and strategic business operations qualifies him to serve on the Company’s Board of Directors.

Mynzhanov received a Bachelor’s

degree in Finance and Credit, Banking from the T.

Ryskulov Kazakh Economic University in 2003 and attended the International Academy of

Business MBA program from 2003 to 2005.

Executive Officers

Pouneh Rahimi has served as our Chief Legal Officer since

Rahimi also serves as legal counsel at Rahimi Law Office, a position she has held since September 2003.

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.

Rahimi’s 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.

formerly a publicly traded company on Nasdaq, as well as a corporate associate at Nixon Peabody LLP.

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.

Stephen 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, Mr.

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 and Young.

obtained his B.S.

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

Matt Talle has served as Chief Strategy Officer of Palmetto

Gourmet Foods (a subsidiary of ours) since January 2020.

Prior to joining Palmetto Gourmet Foods, 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, Mr.

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 Vice President of Sales and Marketing.

Talle obtained his B.S.,

Ag-Business from California Polytechnic University.

Henry Wong has served as Chief Marketing Officer of Palmetto

Gourmet Foods (a subsidiary of ours) since December 2020.

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’s

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

Audit Committee and Audit Committee Financial

We have a standing Audit Committee of the board of directors.

Algaziyeva and Mr.

Ajami currently serve as members of the Audit Committee, with Mr.

Oyer serving as the chairperson of the Audit

Our board of directors has determined that Mr.

Algaziyeva and Mr.

Ajami are audit committee financial experts, as

defined by SEC rules and regulations.

Our board of directors

has determined that each of Mr.

Algaziyeva and Mr.

Ajami is an independent director in accordance with the Nasdaq listing rules

and the applicable requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended.

Our board of directors has further determined

that each of the members of the Audit Committee satisfies the financial literacy and sophistication requirements of the Nasdaq listing

Corporate Governance

Corporate Governance Guidelines

Our board of directors

adopted Corporate Governance Guidelines, which set forth a flexible framework within which the board, assisted by its committees, directs

the affairs of the Company.

The Corporate Governance Guidelines address, among other things, the composition and functions of the board

of directors, director independence, compensation of directors, board membership criteria, board leadership and composition.

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.

Committee Charters

Each standing committee

of the board of directors is governed by a charter adopted by the board.

Availability of Governance Documents

Corporate Governance Guidelines, the Code of Conduct, and each of the Audit, Compensation, and Nominating and Corporate Governance Committee

charters are available on the Company’s investor relations website, www.investors.borealisfoods.com/overview/default.aspx .

We expect that any amendments to the Code of Conduct, or any waivers of its requirements, will be disclosed on our website to the extent

required by the applicable rules of the SEC and The Nasdaq Stock Market LLC.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires the Company’s directors,

executive officers, and persons who beneficially own more than 10% of the Company’s Common Shares to file initial reports of ownership

and reports of changes in ownership of Common Shares and other equity securities of the Company with the SEC.

Directors, executive officers,

and greater than 10% beneficial owners are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports

Based solely on a review of copies of such reports furnished to the

Company and written representations from reporting persons that no other reports were required, the Company believes that during the fiscal

year ended December 31, 2025, and the period from January 1, 2026 through the date of this Annual Report, all Section 16(a) filing requirements

applicable to its directors, executive officers, and greater than 10% beneficial owners were complied with on a timely basis, except as

Number of Late Reports

Number of Transactions Not Reported on a Timely Basis

Known Failure to File

Barthelemy Helg

Zagros Alpine Capital ULC

Zaure Algaziyeva

Pavel Mynzhanov

Executive Compensation.

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.

Our named executive officers (or “ NEOs ”) for the

year ended December 31, 2025, consisted of five individuals:

Soltanzadeh, our current Chief Executive Officer, who served as our principal executive officer during the year ended December 31, 2025;

Wegrzyn, our current Chief Financial Officer, who served as our principal financial officer at the end of the fiscal year ended December

Rahimi, our Chief Legal Officer, who was serving as our executive officer at the end of the fiscal year ended December 31, 2025;

Wong, our current Chief Marketing Officer, who was serving as our executive officer at the end of the fiscal year ended December 31,

Talle, our current Chief Strategy Officer, who was serving as our executive officer at the end of the fiscal year ended December 31,

This section discusses the material components of the executive compensation

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

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 regarding the compensation

earned during the years ended December 31, 2025 and December 31, 2024 by our NEOs.

Name and Principal Position

Reza Soltanzadeh

President and Chief Executive Officer

Stephen Wegrzyn

Chief Financial Officer

Pouneh Rahimi

Chief Legal Officer

Chief Marketing Officer

Chief Strategy Officer

Soltanzadeh’s annual base salary for fiscal year 2025 was $500,000.

Effective February 1, 2025, Mr.

Soltanzadeh deferred the payment

of his base salary through December 31, 2025.

As of December 31, 2025, approximately $460,000 in deferred salary remained unpaid and

is reflected as an obligation of the Company.

See Item 13, “Certain Relationships and Related Transactions, and Director Independence.”

Narrative Disclosure to the Summary Compensation Table

Certain of the compensation paid to our NEOs reflected in the Summary

Compensation Table was provided pursuant to plans and programs which are summarized below.

Wegrzyn and Mr.

Wong were not

party to an employment agreement during 2025 or 2024.

Rahimi and Mr.

Soltanzadeh were each party to an employment agreement during

2024 and 2025.

For a discussion of benefits, please see below.

Elements of Compensation

In 2025, our compensation program consisted primarily of the following

base salary and benefits.

2025 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 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% shareholder and anyone who possesses

material non-public information because of his or her relationship with the company or with an officer, director or principal shareholder

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.

No grants were made under the equity incentive plan to NEOs in 2025.

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 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

A copy of the Company’s Clawback Policy was previously filed as Exhibit 97.1 to the Company’s Annual Report on Form 10-K for the

fiscal year ended December 31, 2024, filed with the SEC on April 15, 2025, and is incorporated herein by reference.

Outstanding Equity Awards at Fiscal Year End

of December 31, 2025, no NEO held any outstanding equity awards.

The following table sets forth compensation earned

by or paid to each non-employee director for the year ended December 31, 2025.

Fees Earned or Paid in Cash ($)

Stock Awards ($)(1)

Option Awards ($)

All Other Compensation ($)

Ertharin Cousin

Barthelemy Helg

Shukhrat Ibragimov

Shiv Vikram Khemka(2)

Amounts reflect the aggregate grant date fair value computed in accordance with ASC Topic 718;

the price per share value as of the closing on May 27, 2025, the grant date, was $3.21.

No non-employee directors received

cash compensation for services rendered to us during the years ended December 31, 2024 and December 31, 2025.

The non-employee directors

received a grant of 10,000 shares under our Equity Incentive Plan for their services in year one and a grant of 2,500 shares for the first

four months of year two.

The grants for the balance of the year will be made in the second quarter of 2026.

(2) On May 11, 2026, Mr.

Khemka resigned from the Board of Directors

(the “Board”) of the Company and from his positions as a member of the Audit Committee, Compensation Committee and Nominating

and Corporate Governance Committee of the Board.

Khemka’s resignation was not the result of any disagreement with the Company

on any matter relating to the Company’s operations, policies or practices.

Cash Compensation

The chairperson of the three principal standing committees of our board

of directors are entitled to the following annual cash retainers:

Board Committee

Chairperson Fee

Audit Committee

Compensation Committee

Nominating and Corporate Governance Committee

No cash retainers were paid during the year ended

December 31, 2025 to the chairperson of the three standing committees of our board of directors.

The sums shown above will be paid during

fiscal year 2026.

We also reimburse all reasonable pre-approved out-of-pocket expenses

incurred by non-employee directors for their attendance at meetings of our board of directors or any committee thereof.

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

The following table sets forth beneficial ownership

of our Common Shares as of May 15, 2026 by:

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

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 May 15, 2026.

Our beneficial ownership is based on 21,463,306

Common Shares issued and outstanding as of May 15, 2026.

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 beneficial ownership

of Common Shares as of May 28, 2026:

Name and Address of Beneficial Owners

and Named Executive Officers of the Company (1)

Reza Soltanzadeh (2)

Barthelemy Helg (3)

Stephen Wegrzyn (4)

Pouneh Rahimi (5)

Matt Talle (6)

Henry Wong (7)

Amin Ajami (8)

Shukhrat Ibragimov (9)

Steven Oyer (10)

Ertharin Cousin (11)

Zaure Algaziyeva

Pavel Mynzhanov (12)

All directors and executive officers as a group (12 individuals)

9,695,900 (13)

Five or more Percent Holders

Reza Soltanzadeh (2)

Oxus Capital Pte.

Barthelemy Helg (3)

Alta Partners LLC (16)

Sergii Diachenko (17)

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.

of (i) 3,032,505 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.

The number of Common Shares held by Zagros Alpine Capital ULC reflects a reduction of 500,000

shares that were transferred into escrow in November 2025 as collateral for the Company’s obligations under a promissory note issued

to EarlyBirdCapital, Inc.

and subsequently transferred to EarlyBirdCapital upon an alleged default.

See Item 13, “Certain Relationships

and Related Transactions — EarlyBirdCapital Escrow Shares.” The Board of Directors has resolved to make Mr.

Soltanzadeh whole

through the issuance of replacement shares.

(3) C onsists

of 2,718,056 Common Shares.

The number of Common Shares reflects a reduction of 500,000 shares that were transferred into escrow in November

2025 as collateral for the Company’s obligations under a promissory note issued to EarlyBirdCapital, Inc.

and subsequently transferred

to EarlyBirdCapital upon an alleged default.

See Item 13, “Certain Relationships and Related Transactions — EarlyBirdCapital

Escrow Shares.” The Board of Directors has resolved to make Mr.

Helg whole through the issuance of replacement shares.

of 33,046 Common Shares.

of 192,368 Common Shares held by Zagros Alpine Capital ULC.

Rahimi does not have voting but has dispositive control over the shares

held by Zagros Alpine Capital ULC.

These shares are also reported as beneficially owned by Mr.

Soltanzadeh in the table above by virtue

of his sole voting control over Zagros Alpine Capital ULC.

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

Talle does not have voting but has

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

These shares are also reported as beneficially owned by Mr.

in the table above by virtue of his sole voting control over Zagros Alpine Capital ULC.

of 14,334 Common Shares.

of 110,169 Common Shares.

(9) 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.

Consists of 14,500 Common Shares.

Consists of 12,500 Common Shares.

Consists of 930 Common Shares.

Includes an aggregate of 9,695,900 Common Shares held directly by, or by entities controlled by, directors and executive officers.

The shares reported for Mr.

Soltanzadeh and Mr.

Helg reflect reductions of 500,000 Common Shares each as a result of shares transferred into escrow and subsequently transferred to EarlyBirdCapital, Inc.

as described in Item 13, “Certain Relationships and Related Transactions — EarlyBirdCapital Escrow Shares.” Common Shares held by Zagros Alpine Capital ULC are reported as beneficially owned by Mr.

Soltanzadeh (by virtue of his sole voting control), Ms.

Rahimi (by virtue of her dispositive control over 192,368 shares), and Mr.

Talle (by virtue of his dispositive control over 133,703 shares).

For purposes of computing the aggregate number of shares beneficially owned by all directors and executive officers as a group, shares held by Zagros Alpine Capital ULC are counted only once to avoid duplication.

Does not include any Common Shares issuable upon exercise of warrants, as no director or executive officer holds warrants as of the date of this table.

Consists of 5,302,477 Common Shares and 8,469,642 Common Shares underlying private placement warrants which are exercisable to purchase a Common Share at $11.50 per share held by Oxus Capital Pte Ltd.

The address of Oxus Capital Pte.

is 300/26 Dostyk Avenue, Almaty city, Republic of Kazakhstan, P.O.

050020.Kenges Rakishev is the controlling shareholder.

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

The address of Belphar

is 3rd Floor, Yamraj Building, Market Square P.O.

Box 3175 Road Town, Tortola British Virgin Islands .

Ibragimov is the

controlling shareholder.

Consists of 1,435,364 Common Shares issuable upon exercise of warrants that are

currently exercisable at an exercise price of $11.50 per share.

The percentage is calculated based on 21,463,306 Common Shares

outstanding plus 1,435,364 Common Shares issuable upon exercise of warrants beneficially owned by this holder (22,898,670 total).

The address of Alta Partners LLC is 1205 Franklin Avenue Garden City, NY 11530.

Steven Cohen is the Managing Member of Alta Partners

LLC and has sole voting and dispositive power over such shares.

Based on information reported in a Schedule 13G filed with the SEC

on February 27, 2026.

Consists of 3,072,471 Common Shares issuable upon exercise of warrants that are currently exercisable at an exercise price of $11.50 per share.

The address of Sergii Diachenko is 2225 Benson Ave, 5th Floor Brooklyn, New York 11214.

Based on information reported in a Form 3 filed with the SEC on April 8, 2026, and Form 4 filings dated April 9, 2026.

The Company is not aware of a Schedule 13D or 13G filing by this holder.

Securities Authorized for Issuance Under Equity

Compensation Plans

On September 3, 2024, we filed a Form S-8 for

offers of Common Shares, issued to qualified officers, employees, non- employee directors and consultants, under Borealis Foods’

Equity Incentive Plan (the “ Incentive Plan ”).

The 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% shareholder and anyone who possesses

material non-public information because of his or her relationship with the company or with an officer, director or principal shareholder

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 fiscal year of we 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.

Equity Compensation Plan Information

The following table provides information as of

December 31, 2025 regarding Common Shares that may be issued under the Company’s equity compensation plans.

Plan Category

Number of securities to be

issued upon exercise of

outstanding options,

warrants and rights (a)

Weighted-average

exercise price of

options, warrants

and rights (b)

Number of securities remaining

available for future issuance under

equity compensation plans

(excluding securities reflected in

Equity compensation plans approved by security holders

Equity compensation plans not approved by security holders

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.

Policies and Procedures

for Related Party Transactions

We have a written Related-Person Transactions

Policy that sets forth the Company’s policies and procedures regarding the identification, review, consideration and approval or

ratification of “related-persons transactions.” For purposes of the Company’s policy only, a “related-person transaction”

is a transaction, arrangement or relationship (or any series of similar transactions, arrangements, or relationships) in which the Company

and any “related person” are participants involving an amount that exceeds $120,000 and the related person will have either

direct or indirect interest.

Transactions involving compensation for services provided to the Company as an employee, director, consultant,

or similar capacity by a related person are not covered by this policy.

A related person is any executive officer, director, or more than

5% shareholder of the Company, including any of their immediate family members, and any entity owned or controlled by such persons.

Under the policy, where a transaction has

been identified as a related-person transaction, management must present information regarding the proposed related-person transaction

to the Audit Committee (or, where Audit Committee approval would be inappropriate, to another independent body of the board of directors)

for consideration and approval or ratification.

The presentation must include a description of, among other things, the material facts,

the interests, direct and indirect, of the related persons, the benefits to the Company of the transaction and whether any alternative

transactions were available.

To identify related-person transactions in advance, the Company relies on information supplied by its executive

officers, directors and certain significant shareholders.

In considering related-person transactions, the Audit Committee takes into account

the relevant available facts and circumstances including, but not limited to:

risks, costs and benefits to the Company;

impact on a director’s independence in the event the related person is a director, immediate family member of a director or an

entity with which a director is affiliated;

terms of the transaction;

availability of other sources for comparable services or products;

terms available to or from, as the case may be, unrelated third parties or to or from employees generally.

In the event a director has an interest in

the proposed transaction, the director must recuse himself or herself from the deliberations and approval.

The policy requires that, in

determining whether to approve, ratify or reject a related-person transaction, the Audit Committee consider, in light of known circumstances,

whether the transaction is in, or is not inconsistent with, the best interests of the Company and its shareholders, as the Audit Committee

determines in the good faith exercise of its discretion.

Related Party Transactions

The following is a description of transactions since December 31, 2024,

to which we have been a participant and in which (i) the amount involved exceeded or will exceed the lesser of $120,000 or one percent

of the average of our total assets at year-end for the last two completed fiscal years, and (ii) any of our directors, executive officers

or holders of more than 5% of our Common Shares, or any members of their immediate family, had or will have a direct or indirect material

interest, other than compensation arrangements which are described in the sections titled “Executive Compensation” and “Director

Compensation.”

Our Relationship with Oxus Capital PTE Ltd.

On April 27, 2026, certain of the Company’s wholly

owned subsidiaries entered into a Credit Agreement (the “Oxus Credit Agreement”) with Oxus Capital PTE Ltd.

Oxus is the Company’s former SPAC sponsor and, through its controlling shareholder Kenges Rakishev, a beneficial owner of approximately

24.7% of the Company’s outstanding Common Shares.

Pavel Mynzhanov, a director of the Company since May 2026, has served as a Director

of Oxus since June 2022.

Credit Agreement.

Pursuant to the Oxus

Credit Agreement, Oxus provided a term loan in an aggregate principal amount of $17.0 million, secured by substantially all assets of

the Company and certain of its subsidiaries.

The term loan matures on April 27, 2031 and bears interest at 12% per annum (14% upon default).

Principal is repayable in 48 consecutive monthly installments commencing May 1, 2027.

The proceeds were used primarily to repay in full

approximately $16.2 million in outstanding obligations under the Company’s former credit facility with Frontwell Capital Partners Inc.,

with the balance applied to transaction expenses and general corporate purposes.

At the Lender’s election, accrued interest from

the closing date through April 30, 2027 (approximately $2.0 million) may be converted into Common Shares at the average closing market

price for the 60 trading days preceding May 1, 2027.

Thereafter, interest is payable in cash monthly.

The Oxus Credit Agreement required the Company,

no later than May 11, 2026, to reconstitute its Board by appointing Pavel Mynzhanov and Zaure Algaziyeva (or such other individuals acceptable

to the Lender).

Reza Soltanzadeh ceasing to serve as president or in a similar senior management position constitutes an event of default,

subject to a 180-day replacement cure period.

A default under, or challenge to the validity of, the Conversion Agreement described below

also constitutes an event of default.

Conversion Agreement.

In connection with

the Oxus Credit Agreement, the Company entered into a Conversion Agreement (the “Conversion Agreement”) with Oxus, Mr.

Helg (collectively, the “Shareholders”).

Pursuant to the Conversion Agreement, approximately $29.1 million in aggregate

principal amount of indebtedness, plus approximately $4.2 million in accrued interest (calculated through June 30, 2026), previously advanced

by the Shareholders to the Company, will automatically convert into Common Shares if the Company does not consummate one or more equity

financings resulting in aggregate gross proceeds of at least $70 million at a price of $9.00 per share on or before July 1, 2026.

term loan under the Oxus Credit Agreement is expressly excluded from the indebtedness subject to conversion.

The conversion price will be based on the volume

weighted average closing price of the Company’s Common Shares for the 20 consecutive trading days ending on and including the trading

day immediately preceding July 1, 2026.

Based on the Company’s approximately 21.4 million Common Shares currently outstanding, the conversion

of the full amount of the indebtedness could result in the issuance of a significant number of additional Common Shares that would be

substantially dilutive to existing shareholders.

Board Approval.

The Oxus Credit Agreement

and the Conversion Agreement were approved by the disinterested members of the Board of Directors on April 24, 2026.

The foregoing descriptions do not purport to be

complete and are qualified in their entirety by reference to the Oxus Credit Agreement and the Conversion Agreement, copies of which are

incorporated by reference as Exhibits 10.12 and 10.13 to this Annual Report.

Our Relationship with Reza Soltanzadeh, Barthelemy Helg, Z Ventures,

Zagros Alpine Capital ULC, and Oxus Capital PTE Ltd.

During fiscal year 2025, the Company issued promissory notes to certain

shareholders and entities controlled by its directors and executive officers to fund working capital needs.

Soltanzadeh, the Company’s

Chief Executive Officer, is the President and controlling person of Z Ventures Inc.

and Zagros Alpine Capital ULC.

Helg, the Company’s

Non-Executive Chairman, is a noteholder in his individual capacity.

Oxus Capital PTE Ltd.

is controlled by Kenges Rakishev, a beneficial

owner of more than 5% of the Company’s outstanding Common Shares.

The following table summarizes the promissory notes issued during fiscal

Interest Rate

Maturity Date

Z Ventures Inc.

Barthelemy Helg

Zagros Alpine Capital

Barthelemy Helg

Oxus Capital PTE LTD.

Z Ventures Inc.

Barthelemy Helg

Z Ventures Inc.

Barthelemy Helg

Z Ventures Inc.

Barthelemy Helg

Z Ventures Inc.

Barthelemy Helg

Z Ventures Inc.

Barthelemy Helg

Z Ventures Inc.

Barthelemy Helg

Z Ventures Inc.

Barthelemy Helg

Z Ventures Inc.

Barthelemy Helg

Z Ventures Inc.

Barthelemy Helg

Z Ventures Inc.

Barthelemy Helg

The aggregate principal

amount of notes issued to holders affiliated with Mr.

Soltanzadeh (Z Ventures Inc.

and Zagros Alpine Capital ULC) during fiscal year 2025

was approximately $2.27 million.

The aggregate principal amount of notes issued to Mr.

Helg during fiscal year 2025 was approximately

$5.96 million.

All such notes bear interest at 10% per annum.

Soltanzadeh Salary Deferral

described in Item 11, “Executive Compensation,” effective February 1, 2025, Mr.

Soltanzadeh deferred the payment of his annual

base salary of $500,000 through December 31, 2025.

As of December 31, 2025, approximately $460,000 in deferred salary remained unpaid

and is reflected as an obligation of the Company.

EarlyBirdCapital Escrow Shares

In November 2025, in connection with the extension

of a promissory note originally issued to EarlyBirdCapital, Inc.

(“EBC”) in connection with the closing of the Company’s business

combination transaction on February 7, 2024, Mr.

Soltanzadeh (through Zagros Alpine Capital ULC) each provided 500,000 Common

Shares as collateral for the Company’s obligations under the note.

The indebtedness underlying the promissory note was originally an obligation

of Oxus Acquisition Corp., the Company’s former SPAC sponsor, and was assumed by the Company in connection with the closing of the business

combination transaction.

The shares were placed into escrow with Continental Stock Transfer & Trust Company.

Following an alleged default under the note,

the escrowed shares were transferred to EBC.

Despite ongoing discussions regarding repayment of the note, EBC advised the Company in late

April 2026 that a portion of such shares had been sold and the proceeds applied against amounts outstanding under the promissory note.

The Company was not aware prior to such time that the shares had been transferred out of escrow.

On May 8, 2026, the Board of Directors determined

Soltanzadeh provided the shares solely for the benefit of the Company and not in respect of any personal indebtedness.

Accordingly, the Board resolved that the Company will take appropriate steps to make Mr.

Soltanzadeh whole for any escrowed

shares through the issuance of replacement shares.

The Company is also reviewing the matter with outside counsel.

Any issuance of replacement shares would be

dilutive to existing shareholders.

The Audit Committee in connection with the Board of Director reviewed,

approved and ratified the transactions described above in accordance with the Company’s Related-Person Transactions Policy.

Limitation of Liability and Indemnification

of Officers and Directors

The Company provides indemnification for its

directors and officers so that they will be free from undue concern about personal liability in connection with their service to the Company.

Under the Company’s bylaws, the Company is required to indemnify its directors and officers to the extent not prohibited under Ontario

or other applicable law.

The Company has also entered into indemnity agreements with its executive officers and directors.

These agreements

provide, among other things, that the Company will indemnify the officer or director, under the circumstances and to the extent provided

for in the agreement, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings

which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of the Company, and otherwise

to the fullest extent permitted under Ontario law and the Company’s bylaws.

Director Independence

With the appointment of Mr.

Amin Ajami to the Board, the Company is

now in compliance with Nasdaq’s independent director requirement as set forth in Listing Rule 5605.

In making this determination, our board of

directors considered certain relationships and transactions that occurred in the ordinary course of business between the Company and entities

with which some of our directors are or have been affiliated.

The board of directors determined that such transactions would not impair

the particular director’s independence or interfere with the exercise of independent judgment in carrying out director responsibilities.

Our board of directors undertook a review

of the independence of each director and considered whether any director has a material relationship that could compromise his or her

ability to exercise independent judgment in carrying out his or her responsibilities as a director.

After review of all relevant transactions

or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent

registered public accounting firm, the board of directors affirmatively determined that all of our directors are independent directors

within the meaning of the applicable Nasdaq listing standards, except for Mr.

Soltanzadeh, who serves as the Company’s Chief Executive

Helg, who serves as Non-Executive Chairman and, as described above under “Related Party Transactions,” is

a party to promissory note arrangements with the Company under which interest has accrued but has not been paid;

Mynzhanov, who

serves as a Director of Oxus Capital PTE Ltd., the Company’s lender under the Credit Agreement described above.

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.

Carr, Riggs & Ingram, LLC (“CRI”),

213), who performed our audit services for fiscal year 2025 including an audit of the consolidated financial statements and

services related to filings with the SEC, has served as our independent registered public accounting firm since January 2026.

Pollack Brant, Advisors + CPAs (“BPB”), (PCAOB ID:

52), performed our audit services for fiscal years 2023 and 2024.

As previously

disclosed by the Company, CRI acquired, effective as of January 1, 2026, certain assets related to the capital markets practice of BPB.

The following table summarizes the fees of our

independent registered public accounting firm, billed to us in each of the last two fiscal years:

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 our independent registered public accounting firm in connection with regulatory filings.

(2) Audit-Related

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 consist of fees billed for all other services.

Audit Committee Pre-Approval Policy and Procedures

The Audit Committee’s current policy is

to 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).

All services rendered by CRI, our current independent

registered public accounting firm, during fiscal 2025 were pre-approved by the Audit Committee in accordance with the audit committee

pre-approval policy.

All services rendered by BPB, our former independent registered public accounting firm, during fiscal 2024 were pre-approved

by the Audit Committee in accordance with the audit committee pre-approval policy.

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

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).

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).

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).

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).

Financial Statements.

following documents are included on pages F-1 through F-22 attached hereto and are filed as part of this Annual Report on Form

Financial Statement Schedules.

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.

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

of Borealis Foods Inc.’s 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).

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.

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.

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

Description of Borealis Food Inc.’s Securities (incorporated by reference to Exhibit 4.1 to Borealis Food Inc.’s Form 10-K filed on April 15, 2025)

Warrant issued by Borealis Foods Inc.

to EarlyBirdCapital, Inc.

dated June 13, 2025.

Warrant issued by Borealis Foods Inc.

To EarlyBirdCapital, Inc.

dated November 19, 2025.

Credit Agreement, dated August 10, 2023, by and between Borealis Foods Inc.

and Frontwell Capital Partners Inc.

(incorporated herein by reference to Exhibit 10.1 to Borealis Foods Inc.’s Form 8-K filed on May 1, 2026)

Forbearance and Amendment Agreement, dated March 27, 2026 by and between Borealis Foods Inc., Palmetto Gourmet Foods (Canada) Inc., Borealis IP Inc., Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., PGF Real Estate II, Inc.

and Frontwell Captial Partners (incorporated by reference to Exhibit 10.1 to Borealis Foods Inc.’s Form 8-K filed on April 2, 2026).

Form of Promissory Note for Barthelemy Helg, Z Ventures Inc., Zagros Alpine Capital ULC and Amira Holding AG (incorporated by reference to Exhibit 10.1 to Borealis Foods Inc., Form 10-Q, filed with the SEC on November 19, 2025).

Form of Promissory Note for Oxus Capital PTE Ltd.

(incorporated by reference to Exhibit 10.2 to Borealis Foods Inc., Form 10-Q, filed with the SEC on November 19, 2025).

Form of Borealis Foods Inc.

Director and Officer Indemnification Agreement.

Credit Agreement, dated as of April 27, 2026, by and among Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., PGF Real Estate II, Inc., as borrowers, Borealis Foods Inc., Borealis IP Inc., and Palmetto Gourmet Foods (Canada) Inc., as guarantors, and Oxus Capital PTE Ltd., as lender (incorporated herein by reference to Exhibit 10.1 to Borealis Foods Inc.’s Current Report on Form 8-K, filed with the SEC on May 1, 2026).

Agreement, dated as of April 27, 2026, by and among Borealis Foods Inc., certain of its subsidiaries, Oxus Capital PTE Ltd., Reza

Soltanzadeh, and Barthelemy Helg (incorporated herein by reference to Exhibit 10.2 to Borealis Foods Inc.’s Current Report

on Form 8-K, filed with the SEC on May 1, 2026).

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).

from Berkowitz Pollack Brant Advisors + CPAs, LLP (incorporated herein by reference to Exhibit 16.1 to Borealis Food Inc.’s

Form 8-K filed with the SEC on January 20, 2026).

Insider Trading Policy (incorporated herein by reference to Exhibit 19.1 to Borealis Foods Inc.’s Form 10-K filed

with the SEC on April 15, 2025).

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.

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.

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.

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.

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

32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C.

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

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.

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.

Executive Compensation Recovery (“Clawback”) 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).

XBRL Instance Document.

XBRL Taxonomy Extension Schema Document.

XBRL Taxonomy Extension Calculation Linkbase Document.

XBRL Taxonomy Extension Definition Linkbase Document.

XBRL Taxonomy Extension Label Linkbase Document.

XBRL Taxonomy Extension Presentation Linkbase Document.

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

schedules, and exhibits to this Exhibit omitted pursuant to Item 601(b)(2) of Regulation

The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit

to the SEC upon request.

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

Reza Soltanzadeh

Executive Officer and Director

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

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

Reza Soltanzadeh

(principal executive officer)

/s/ Stephen Wegrzyn

Chief Financial Officer

Stephen Wegrzyn

(principal financial officer)

/s/ Barthelemy Helg

Barthelemy Helg

/s/ Ertharin Cousin Director 4/15/2025

/s/ Ertharin Cousin

Ertharin Cousin

/s/ Shukhrat Ibragimov Director 4/15/2025

Signature not provided

Shukhrat Ibragimov

/s/ Steven Oyer Director 4/15/2025

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

Shiv Vikram Khemka

/s/ Steven Oyer

/s/ Pavel Mynzhanov

Pavel Mynzhanov

/s/ Zaure Algaziyeva

Zaure Algaziyeva

/s/ Amin Ajami

BOREALIS FOODS INC.

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

FORM 10-K FOR THE YEAR

ENDED DECEMBER 31, 2025

FINANCIAL INFORMATION Page

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Reports of Independent Registered Public Accounting Firms (PCAOB ID:

213 & 52 ) F-2

Financial Statements

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

Consolidated Balance Sheets as of December 31, 2025 and 2024 F-3

Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024 F-4

Consolidated Statements of Changes in Shareholders’ Deficit for the Years Ended December 31, 2025 and 2024 F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 F-6

Notes to Consolidated Financial Statements F-7

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of 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.

We have audited the accompanying balance sheet

of and Subsidiaries (the Company) as of December 31, 2025, and the related consolidated statements of operations, stockholders’

deficit, and cash flows for the year 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, 2025, and the results of its operations and its cash flows for the year then ended, in conformity with

accounting principles generally accepted in the United States of America.

The financial statements of the Company as of

and for the year ended December 31, 2024, were audited by other auditors whose report dated April 15, 2025, expressed an unqualified opinion

on those statements.

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.

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audit.

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 audit 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 audit, 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 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.

Our audit 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 audit 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 audit 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.

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

Critical audit matters are matters arising from

the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and

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

subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ Carr, Riggs & Ingram, L.L.C.

We have served as the Company’s auditor since 2026.

West Palm Beach, FL

April 15, 2025

Palm Beach Gardens, FL

Borealis Foods Inc.

1 unchanged sentence

Consolidated Balance Sheets

2024 December 31, 2023

Accounts receivable, net of allowance for credit losses of $ 230,000 and $ 247,653 as of December 31, 2025 and December 31, 2024, respectively

expenses and other current 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

1,917,356 1,917,356

Other non-current assets

169,685 169,685

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

Liabilities and Shareholders' (deficit)

plant and equipment, net

- of-use asset, net

non-current assets

and Shareholders’ (deficit)

payable and accrued expenses

to related parties

of credit, current portion

notes payable, current portion

payable, current portion, net of capitalized loan costs

lease payable, current portion

leases payable, current portion

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

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

to related parties, net of current portion

of credit, net of current portion

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

payable, net of current portion

lease payable, net of current portion

leases payable, net of current portion

tax liability

Shareholders’

shares, no par value

paid-in capital

( 109,771,192 )

Total liabilities

( 90,792,574 )

shareholders’ (deficit)

Common shares, no par value

Additional paid-in capital

( 19,230,587 )

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.

liabilities and shareholders’ (deficit)

See accompanying notes to the consolidated financial

Borealis Foods Inc.

2 unchanged sentences

For the Years Ended

December 31, 2024 December 31, 2023

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

Sales discounts & allowances

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

Cost of goods sold

1 unchanged sentence

Total cost of goods sold

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

Total sales, general & administrative expenses

1 unchanged sentence

Other income (expense):

South Carolina grant revenue — 300,231

Loss on disposal of assets — ( 962,665 )

Impairment loss

gain on foreign exchange rates

3 unchanged sentences

Income tax benefit

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.

See accompanying notes to the consolidated financial

Borealis Foods Inc.

and Subsidiaries

Consolidated Statements of Changes in Stockholders' Deficit

Statements of Changes in Stockholders’ Equity (Deficit)

Years Ended December 31, 2025 and 2024

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 )

Number of Shares

Paid-In Capital

Accumulated Deficit

Balance at December 31, 2023

Expense related to stock

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

( 65,465,376 )

( 21,347,295 )

Expense related to stock options (Note 9)

Convertible debt converted to equity from reverse recapitalization

Assumption of debt from reverse recapitalization

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 )

( 10,285,918 )

Conversion to Newco shares from reverse recapitalization

( 78,621,110 )

( 57,117,774 )

( 6,345,000 )

( 25,327,198 )

Balance at December 31, 2024

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

$ ( 90,792,574 )

$ ( 695,886 )

Exercise of restricted share units

Expense related to restricted share units

Issuance of restricted share units

( 18,978,618 )

Balance at December 31, 2025

$ ( 109,771,192 )

$ ( 19,230,587 )

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

(21,463,306 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.

See accompanying notes to the consolidated

financial statements

Borealis Foods Inc.

1 unchanged sentence

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

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

Non-cash compensation expense related to restricted share units and stock options

Depreciation and amortization

Amortization of loan costs

Impairment loss

Provision for credit losses

3 unchanged sentences

Accounts receivable

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

Operating lease ( 3,138 ) 6,444

Prepaid expenses and other

Operating lease

Accounts payable and accrued expenses

3 unchanged sentences

Purchases of intangible assets

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

Purchases of property, plant and equipment

Net cash used in investing activities

Cash flows from financing activities

Net payments to related parties — ( 500,000 )

Net payments from related parties

Proceeds from convertible notes payable

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

Borrowings from line of credit 7,600,000 —

Borrowings on line of credit

Payments on line of credit

Payments on notes payable

Net cash provided by financing activities

Net change in cash

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

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

Cash, beginning of period

Cash, end of period

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 ) $ —

Conversion of notes payable into Class A shares

Note payable supplier finance

Note payable accounted for as due to related party

See accompanying notes to the consolidated financial statements.

Operating lease renewal

See accompanying notes to the consolidated

financial statements.

Borealis Foods Inc.

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.

Notes to Consolidated Financial Statements

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.

Gourmet Foods (Canada) Inc., (“ PGF Canada ”), Palmetto Gourmet Foods, Inc.

(“ PGF ”), PGF Real Estate

(“ 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 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.

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.

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.

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

and (ii) pursuant to the Plan of Arrangement, (a) Newco and Legacy Borealis amalgamated (the “ Legacy Borealis

Amalgamation ”, and the amalgamated corporation resulting therefrom, “ Amalco ”), with Amalco surviving the

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

and (b) following the Legacy Borealis Amalgamation, New Oxus and

Amalco amalgamated (the “ Borealis Amalgamation, ” and together with the Legacy Borealis Amalgamation, the “ Amalgamations ,”

and the corporation resulting therefrom, “ Borealis ,” as a corporation amalgamated under the Business Corporations

Act (Ontario)), with Borealis surviving the Borealis Amalgamation.

Borealis continues under the name “ Borealis Foods Inc.

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.

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.

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

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.

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

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 .

Notes to Consolidated Financial Statements

Going Concern

The consolidated financial statements have been

prepared assuming that the Company will continue as a going concern.

During the year ended December 31, 2025, the Company incurred a net

loss of $ 18,978,618 and experienced recurring losses from operations, including negative cash flows from operations.

At December 31, 2025,

cash and cash equivalents were approximately $ 64,000 and the Company had negative working capital of approximately $ 61,762,000 , reflecting

current liabilities of approximately $ 69,817,000 against current assets of approximately $ 8,055,000 .

These conditions raise substantial

doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued.

In assessing its ability to continue as a going

concern, management has considered all available information about the future, which is at least, but is not limited to, twelve months

from the date these financial statements are issued.

Management has developed plans intended to mitigate the conditions that raise substantial

These plans include:

(i) continued reduction of selling, general, and administrative expenses, which declined by approximately

$ 8,047,000 , or 35.6 %, to approximately $ 14,547,000 in 2025, with further reductions anticipated as sales and marketing costs normalize;

(ii) growth in production volumes to improve overhead absorption and gross margin;

(iii) conversion of a portion of related party debt

to equity to reduce the annual interest burden;

and (iv) pursuit of additional debt or equity financing to provide working capital.

to December 31, 2025, the Company completed the refinancing of its senior credit facility through a new Credit Agreement with Oxus Capital

(“Oxus Capital”), a related party and major shareholder of the Company, providing a term loan facility of up to $ 17,000,000 ,

the proceeds of which were used to repay in full all outstanding obligations under the FrontWell Credit Agreement and eliminate the August

2026 balloon maturity.

See Note 4 for further details.

Although management’s plans are intended

to mitigate the relevant conditions and events, these plans are not fully within the Company’s control and cannot be assessed as

probable of being effectively implemented.

Accordingly, substantial doubt about the Company’s ability to continue as a going concern

within one year after the date these financial statements are issued has not been alleviated.

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.

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.

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, 2025 and December 31, 2024.

Inventories, net

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

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.

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.

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.

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.

Notes to Consolidated Financial Statements

Prepaid Expenses

Prepaid expenses include approximately $ 761,000 and $ 1,135,000 composed

primarily of prepaid insurance, deposits on inventory purchases and property, plant and equipment purchases as of December 31, 2025 and

December 31, 2024, respectively.

Property, Plant and Equipment,

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.

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.

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 $ 2,488,000 and $ 1,796,000 for the years

ended December 31, 2025 and 2024, respectively.

This increase in net income resulted in an improvement of $ 0.12 and $ 0.08 , respectively,

to loss per share.

The total cost basis of machinery subject to depreciation over machine hours was approximately $ 38,717,000 as of December

31, 2025 and $ 38,601,000 as of December 31, 2024.

Straight-line assets:

Buildings and improvements 10 - 30 years

Furniture, fixtures and equipment 3 - 15 years

Buildings and improvements

10 - 30 years

Furniture, fixtures and equipment

Machine hours assets:

1 unchanged sentence

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.

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.

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.

A trademark impairment charge of $ 90,082 was recorded

in Q4 2025, reducing the trademark balance to zero at December 31, 2025.

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.

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.

A goodwill impairment charge of $ 1,917,356 was recorded in Q4 2025, reducing the goodwill balance to zero

at December 31, 2025.

Borealis Foods Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements

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 .

Amounts due to related parties (Company shareholders

and entities controlled by Company shareholders) totaled $ 27,295,885 as of December 31, 2025, and $ 15,427,453 as of December 31, 2024.

This related party liability is comprised of multiple notes payable to a shareholder in the amount of $ 13,285,792 and $ 7,325,790 as of

December 31, 2025, and December 31, 2024, respectively, and is due on demand and bears interest at 10 % annually.

An additional note payable

to a shareholder in the amount of $ 500,000 as of December 31, 2025 and December 31, 2024, bears interest at 10 % annually and is due December

Additional notes payable to a shareholder in the amount of $ 2,408,432 as of December 31, 2025, bears interest at 10 % annually

and are due on demand.

The remaining $ 11,101,661 is comprised of two shareholder notes payable.

The first note for $ 7,601,661 was a result

of expenses recognized by Oxus and resulted in reduction of contributed equity at the Reverse Recapitalization.

This note matures on June

30, 2026 after extension and is non-interest bearing.

An additional note payable to this shareholder in the amount of $ 3,500,000

is due on June 30, 2026 and bears interest at 10 % annually.

Related parties debt balances outstanding as of December

31, 2025 are due as follows:

$ 27,295,885 in 2026.

salary of the Company’s CEO was accrued and not paid during the year ended December 31, 2025.

The Company recorded $ 458,328

in accrued payroll expense to reflect compensation for services performed .

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.

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.

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 $ 31,476,000 and $ 29,100,000 for the years ended December 31, 2025 and 2024, 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.

Total payment discounts and promotions were approximately

$ 1,396,000 and $ 1,431,000 resulting in net revenues of approximately $ 30,080,000 and $ 27,669,000 for the years ended December 31, 2025

and 2024, 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.

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.

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 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;

Since the Company’s

accounts receivable are largely similar, the Company evaluates its allowance for credit losses as one portfolio segment.

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.

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.

The Company incurred significant production training

expenses for the years ended December 31, 2025 and 2024, totaling approximately $ 949,000 and $ 1,715,000 respectively, 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.

Borealis Foods Inc.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements

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, 2025 and 2024 were approximately $ 2,354,000 and $ 5,733,000 , 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, 2025 and 2024 were approximately $ 202,000 and $ 197,000 ,

respectively, and are included in selling, general, and administrative expenses in the accompanying consolidated statements of operations.

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.

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, 2025 and 2024 were approximately

$ 2,210,000 and $ 2,395,000 , 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 included a service fee, an investment stake in

the Company, and a royalty agreement on future co-branded sales.

The service fee under this agreement has been expensed on a straight-line

basis under the terms of the contract.

This agreement expired in March 2026

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.

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 $0 and $ 1,506,000 for the years ended December 31, 2025 and

2024, respectively.

Transaction costs have been expensed as incurred and are included in selling, general and administrative expenses

in the accompanying consolidated statements of operations.

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.

Notes to Consolidated Financial Statements

Concentration of Risk

The Company maintains cash balances

at financial institutions in excess of federally insured limits as of December 31, 2025 and December 31, 2024.

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 35 % and 33 % of net

revenues for the years ended December 31, 2025 and 2024, respectively.

Accounts receivable from three customers amounted to approximately

51 % and 37 % of total accounts receivable as of December 31, 2025 and 2024, respectively.

Substantially all of the Company’s sales

for the years ended December 31, 2025 and 2024 occurred in the United States, Canada, Central America, South America, and Europe.

Purchases from 10 vendors accounted for approximately 54 % and 47 % of

purchases during the years ended December 31, 2025 and 2024, respectively.

Accounts payable to these vendors totaled approximately $ 2,764,000

and $ 3,217,000 as of December 31, 2025 and 2024, 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.

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, 2025 and December 31, 2024.

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.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements

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 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.

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.

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.

In November 2023, the Financial Accounting Standards

Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

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 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 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):

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.

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.

is effective for years beginning after December 15, 2024, and interim periods within years beginning after December 15, 2025.

5, income taxes, for the required disclosures.

Borealis Foods Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

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 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.

The Company is currently evaluating ASU 2024-03 to determine the impact

it may have on its consolidated financial statements.

In July 2025, the FASB issued ASU No.

2025-05, Financial

Instruments - Credit Losses (Topic 326):

Measurements of Credit Losses for Accounts Receivable and Contract Assets , which provides

a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets

that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers .

Under ASU No.

2025-05, an entity

is required to disclose whether it has elected to use the practical expedient.

An entity that makes the accounting policy election is

required to disclose the date through which subsequent cash collection are evaluated.

2025-05 is effective for annual reporting

periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating ASU 2025-05 to determine the impact it may have on its consolidated financial statements.

Inventories, net

In December 2025, the FASB issued ASU No.

Interim Reporting (Topic 270), which is intended to improve the navigability of the guidance in ASC 270, Interim Reporting ,

and clarify when it applies.

Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes

in accordance with GAAP.

2025-11 also addresses the form and content of such financial statements, interim disclosures requirements,

and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material

impact on the entity.

2025-11 is effective for interim reporting periods within annual reporting periods beginning after December

Early adoption is permitted.

The Company is currently evaluating ASU No.

2025-11 to determine the impact it may have on its

consolidated financial statements.

Inventories were as follows:

December 31, 2024 December 31, 2023

Raw materials

1 unchanged sentence

Reserve for obsolete inventory

$ 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, Net

Property, plant and equipment were as follows:

December 31, 2024 December 31, 2023

Building and improvements

1 unchanged sentence

Construction in progress

59,506,636 57,781,625

accumulated depreciation

( 15,611,596 )

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.

( 13,770,310 )

Depreciation and amortization expense recorded in

the years ended December 31, 2025 and 2024 was approximately $ 1,841,000 and $ 2,324,000 , respectively, which is included as a

component of cost of goods sold.

During the years ended

December 31, 2025 and 2024, there was no interest capitalized to property and plant equipment under construction.

Borealis Foods Inc.

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.

Notes to Consolidated Financial Statements

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

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.

On November 13, 2025, the Company received a

notice from FrontWell asserting the occurrence of a Default under the FrontWell Credit Agreement.

On March 27, 2026, the Company,

together with its subsidiaries Palmetto Gourmet Foods, Inc.

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

(collectively, the “Forbearance Parties”), entered into a Forbearance and Amendment Agreement with FrontWell (the

“Forbearance Agreement”), pursuant to which FrontWell agreed to forbear from exercising its rights and remedies with

respect to specified defaults under the FrontWell Credit Agreement through April 27, 2026, subject to compliance with certain

conditions, including the retention of a Chief Restructuring Officer.

On April 27, 2026, the Company repaid and satisfied in full

all obligations outstanding under the FrontWell Credit Agreement and entered into a new senior secured credit agreement with Oxus

Capital PTE Ltd.

In connection therewith, the engagement of the Chief Restructuring Officer was terminated.

Amortization expense of approximately $ 499,000

and $ 311,000 was recorded on the fees for the years ended December 31, 2025 and 2024, respectively.

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 2024.

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, 2025 and December 31, 2024 the line of credit had $ 2,691,000 and $ 7,600,000 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.

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

matured 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.

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 June 2026 , 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.

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 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 June 2026 , and bears interest at 10 % per annum.

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 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.

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 matured in December 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 June 2026 , is non-interest bearing and payable to a related party.

Debt balances outstanding as of December 31, 2025 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%.

On April 27, 2026, the Company’s subsidiaries,

Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., and PGF Real Estate II, Inc.

(collectively, the “Borrowers”), entered

into a Credit Agreement (the “Oxus Credit Agreement”) with Oxus Capital PTE Ltd.

(“Oxus Capital”), a major shareholder

of the Company, as lender.

Borealis Foods Inc., Borealis IP Inc., and Palmetto Gourmet Foods (Canada) Inc.

are party to the Oxus Credit

Agreement as guarantors.

The Oxus Credit Agreement provides for a term loan facility in an amount of up to $ 17,000,000 (the “Term

Loan”), the proceeds of which were used to repay in full and discharge all outstanding obligations under the FrontWell Credit Agreement

and to pay associated transaction fees and expenses.

The Term Loan bears interest at 12 % per annum and matures on April 27, 2031.

is repayable in 48 consecutive monthly installments calculated on a straight-line basis over the amortization period, commencing on the

first payment date.

Interest payments commence on May 1, 2027;

provided that Oxus Capital has the option, at its sole election, to convert

all interest accrued during the first year of the loan into common equity of the Company in lieu of cash payment.

The Term Loan is secured

by a first-priority lien on substantially all assets of the Borrowers, including mortgages on the Company’s manufacturing facility

and distribution center located in Saluda, South Carolina.

In connection with the Oxus Credit Agreement, Oxus Capital is entitled to appoint

two members to the Company’s Board of Directors.

Additionally, Oxus Capital and the Company entered into a Subscription Agreement

pursuant to which the Company is obligated to raise not less than $ 70,000,000 in additional equity from investors acceptable to Oxus Capital

at a price of not less than $ 9.00 per share on or before June 30, 2026;

in the event such equity financing is not consummated by such

date, the Subscription Agreement provides for the conversion of outstanding convertible notes held by Oxus Capital into equity interests

of the Company.

The Oxus Credit Agreement constitutes a related party transaction as Oxus Capital is a major shareholder of the Company.

November 2025, in connection with the extension of a promissory note originally issued to EarlyBirdCapital, Inc.

in connection with the closing of the Company’s business combination transaction on February 7, 2024, Mr.

(through Zagros Alpine Capital ULC) each provided 500,000 Common Shares as collateral for the Company’s obligations under the note.

The indebtedness underlying the promissory note was originally an obligation of Oxus Acquisition Corp., the Company’s former SPAC

sponsor, and was assumed by the Company in connection with the closing of the business combination transaction.

The shares were placed

into escrow with Continental Stock Transfer & Trust Company.

an alleged default under the note, the escrowed shares were transferred to EBC.

Despite ongoing discussions regarding repayment of the

note, EBC advised the Company in late April 2026 that a portion of such shares had been sold and the proceeds applied against amounts

outstanding under the promissory note.

The Company was not aware prior to such time that the shares had been transferred out of escrow.

Borealis Foods Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

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 —

PGF, PGF RE I, and PGF RE II (the “United States

subsidiaries”) are taxed as C corporations, with a statutory rate of 21 %.

(Loss) income before income tax expense (benefit) for the years ended

December 31, 2025 and 2024 is as follows

Income (Loss) before Tax

$ ( 11,997,676 )

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

$ ( 4,635,408 )

Benefit (Provision) for income taxes $ 134,901 $ 336,031

Borealis Foods Inc.

Foreign Income (Loss) before Tax

( 7,048,667 )

( 20,826,690 )

Total Income (Loss) Before Taxes

$ ( 19,046,343 )

$ ( 25,462,098 )

Our income (loss) from continuing operations before income taxes is

Continuing Operations pre-tax book income

$ ( 19,046,343 )

$ ( 25,462,098 )

Discontinued Operations pre-tax book income

The components of income tax provision (benefit) for the years ended

December 31, 2025 and 2024 were as follows:

For the Years Ended

Current provision

Current benefit (provision) for income taxes

Deferred provision

$ ( 2,021,580 )

$ ( 4,628,566 )

( 1,750,184 )

Valuation allowance for unrealizable net deferred tax assets

Deferred benefit/(provision) for income taxes

Total benefit/(provision) for income taxes

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

Notes to Consolidated Financial Statements

The Company adopted ASU 2023-09 “Income Taxes (Topic 740):

To Income Tax Disclosures” on a prospective basis beginning with the year ended December 31, 2025.

The following table presents required

disclosure pursuant to ASU 2023-09 and reconciles the U.S.

federal statutory tax amount and rate to our actual global effective amount

and rate for the year ended December 31, 2025:

For the Year Ended

December 31, 2025

federal statutory tax rate

State income taxes, net of federal income tax effect

Foreign tax effects

Statutory tax rate difference between Canada and United States

Stock Options

Other Adjustments

Changes in valuation allowance

Nontaxable or nondeductible items

Impairment Loss

Other Adjustments

Deferred tax true-ups

Other adjustments

Other Effective tax rate - (Benefit)/provision

The following table presents the required disclosures prior to the

adoption of ASU 2023-09 and reconciles the U.S.

federal statutory income tax rate to the actual global effective income tax rate for the

year ended December 31, 2024:

Federal tax expense

State tax expense

Statutory tax rate difference between Puerto Rico and United States

Changes in valuation allowance

Provision for income taxes

Significant components of the Company’s deferred tax assets are

of December 31,

Net operating losses carried

Other deferred tax assets

Deferred income tax assets $ 26,447,925 18,851,926

Total deferred tax assets

Deferred tax (liabilities):

Property, plant and equipment

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 ) %

Total deferred tax (liabilities)

Valuation allowance

Net deferred tax assets/(liabilities)

As of December 31, 2025 and 2024, the Company had a net operating

loss carryforward for federal income tax purposes of $ 31,762,682 and $ 26,153,662 , respectively, all of which have indefinite carryforward

As of December 31, 2025 and 2024, the Company had a net operating loss carryforward for state income tax purposes of $ 31,762,682

and $ 26,153,662 , respectively, which will begin to expire in 2039.

The Company has foreign net operating loss carryforwards of $ 4,343,723

and $ 2,592,992 as of December 31, 2025 and 2024, respectively, which expire beginning in 2039.

Borealis Foods Inc.

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.

Notes to Consolidated Financial Statements

Management has established a valuation allowance against the deferred

tax assets as management does not believe it is more likely than not that these assets will be realized.

The Company’s valuation

allowance decreased by approximately $ 4,230,462 from 2024 to 2025.

The Company complies with the provisions of ASC 740-10 in accounting

for its uncertain tax positions.

ASC 740-10 addresses the determination of whether tax benefits claimed or expected to be claimed on a

tax return should be recorded in the financial statements.

Under ASC 740-10, the Company may recognize the tax benefit from an uncertain

tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based

on the technical merits of the position.

The Company has determined that the Company has no significant uncertain tax positions requiring

recognition under ASC 740-10 and therefore has not included a tabular roll forward of unrecognized tax benefits.

As there are no uncertain

tax positions recognized, interest and penalties have not been accrued.

The Company is subject to income tax in the United States, South Carolina

The Company has not been audited by any federal, state or foreign tax authorities in connection with income taxes.

The Company’s tax years December 31, 2019 through December 31,

2025 generally remain open to adjustment for all federal, state and foreign tax matters until its net operating loss and tax credit carryforwards

are utilized or expire prior to utilization, and the applicable statutes of limitation have expired in the utilization year.

and state tax authorities can generally reduce a net operating loss (but not create taxable income) for a period outside the statute of

limitations in order to determine the correct amount of net operating loss which may be allowed as a deduction against income for a period

within the statute of limitations.

The Company recognizes interest accrued related to unrecognized tax

benefits and penalties, if incurred, as a component of income tax expense.

The Company adopted ASU 2023-09 on a prospective basis for the year

ended December 31, 2025.

The company made no state or foreign tax payments for the year ended December 31, 2025;

therefore, no table is

needed as a result of the adoption.

One Big Beautiful Bill

On July 4, 2025, President Trump signed into law the One Big Beautiful

Bill Act (“OBBBA”), which resulted in the extension of many provisions of the current tax law as well as other rule changes

that could impact the Company’s tax provision in 2025 or 2026.

Examples of the new tax law include the following:

● Full expensing of U.S.

research and development costs under

Section 174A.

● Retroactive expensing of unamortized U.S.

research and development

costs capitalized between 2022 and 2024;

either all in 2025, or over two years in 2025 and 2026.

● Return of the Section 163(j) taxable income base excluding the

deductions for depreciation and amortization in 2025 (change from “Tax EBIT” to “Tax EBITDA”).

● Decrease in the Section 250 deduction for Net CFC Tested Income

(formerly GILTI) to 40 % (from 50 %) in 2026, instead of the scheduled decrease to 37.5 % prior to the OBBBA.

● Decrease in the Section 250 deduction for foreign-derived income

to 33.34 % (from 37.5 %) in 2026, instead of the scheduled decrease to 21.875 % prior to the OBBBA.

● Increase in the foreign tax credit rate on Net CFC Tested Income

(formerly GILTI) to 90 % (from 80 %), and a 10 % disallowance on repatriation, in 2026.

● Removal of the allocation of interest expense and research and

development expense to Net CFC Tested Income (formerly GILTI) in calculating the foreign tax credit limitation, effective in 2026.

The Company has determined the legislation will not have a material

impact on the Company’s financial statements.

Borealis Foods Inc.

Notes to Consolidated Financial Statements

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.

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.

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.

and Subsidiaries

Notes to the Consolidated Financial Statements

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.

Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be

ROU assets associated with operating leases recorded

net of accumulated amortization were approximately $ 158,000 and $ 64,000 as of December 31, 2025 and December 31, 2024, respectively.

assets associated with finance leases recorded net of accumulated amortization of approximately $ 754,000 and $ 1,390,000 at December 31,

2025 and 2024, respectively, and are included with property, plant and equipment, net.

The Company recognized interest expense on its

lease obligations of approximately $ 282,000 and $ 417,000 during the years ended December 31, 2025 and 2024, respectively.

For the years ended December 31, 2025 and 2024,

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:

the Company recognized rent expense associated with leases as follows:

Operating lease cost:

8 unchanged sentences

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Leases (continued)

Notes to Consolidated Financial Statements

ROU assets and lease liabilities consist of the following as of December

31, 2025 and 2024:

Operating leases - ROU assets:

9 unchanged sentences

Accumulated depreciation

( 2,425,725 )

( 1,789,691 )

Finance leases, ROU assets, net

3 unchanged sentences

Total finance lease liabilities:

$ 1,682,674 $ 2,248,661

Borealis Foods Inc.

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

Future minimum payments due under operating and

finance leases as of December 31, 2025 consisted of the following:

Years Ending December 31,

effect of discounting

Lease liability recognized

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

As of December 31, 2025 the weighted average remaining

lease term and weighted average discount rate for operating leases was 3.4 years and 10.00 %, respectively.

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, 2025 the weighted average remaining

lease term and weighted average discount rate for finance leases was 1.67 years and 19.04 %, 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.

Borealis Foods Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

The following represents a summary of warrants

outstanding and exercisable on December 31, 2025:

Description Issue Date Classification Exercise Price Expiration

Date Outstanding

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

Private Placement Warrants 6/13/2025 Equity $ 5.00 7/18/2027 100,000 100,000

Private Placement Warrants 11/19/2025 Equity $ 2.50 11/19/2028 250,000 250,000

26,900,000 26,900,000

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.

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.

Following the closing of the Reverse Recapitalization,

Borealis has the ability to redeem outstanding warrants at any time after they become exercisable and prior to their expiration, at a

price of $ 0.01 per warrant, provided that the last reported sales price of Common Shares equals or exceeds $ 18.00 per share (as adjusted

for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 days within a 30 trading day period commencing

once the warrants become exercisable and ending on the third trading day prior to the date on which Borealis Foods Inc.

gives proper notice

of such redemption and provided certain other conditions are met.

The public warrants are identical to the 2021

private placement warrants in material terms and provisions, except the private placement warrants were not transferable, assignable or

salable until 30 days after the completion of the Reverse Recapitalization.

Equity Based Compensation

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:

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, 2025 and 2024 the Company granted options to purchase 0

and 333,574 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

2 unchanged sentences

Dividend yield

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.

and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024,

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)

the Company recorded approximately $ 0 and $ 1,273,000 , respectively, of employee 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.

Stock option activity for the years ended December 31, 2025 and 2024

is summarized as follows:

Shares Weighted

Price Weighted

Options outstanding at December 31, 2023 3,666,426 $ 0.0001 8.10

3 unchanged sentences

Options outstanding at December 31, 2024 —

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 —

2 unchanged sentences

and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2024 and 2023

Notes to Consolidated Financial Statements

Restricted Stock

Outstanding at December 31, 2023

Outstanding at December 31, 2024

Outstanding at December 31, 2025

Stock compensation expense related to

restricted stock units (“RSUs”) was approximately $ 444,000 and $ 0 for the years ended December 31, 2025 and 2024,

respectively.

represent the right to receive one common share of the Company or the cash equivalent of one common share upon vesting, subject to the

terms and conditions of the Company’s Equity Incentive Plan and the applicable award agreement.

Vesting is generally subject to continued

service and any other conditions established by the Compensation Committee.

Company’s Equity Incentive Plan, adopted on February 7, 2024, provides for the grant of stock options, RSUs, performance share units

(PSUs), deferred share units (DSUs) and stock appreciation rights (SARs) to directors, officers, employees and consultants.

of the plan is to attract, retain and incentivize eligible participants and align their interests with those of shareholders through

equity-based compensation.

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

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.

For Years Ended

Basic (loss) per share calculation

Net (loss) available to common shareholders

$ ( 18,978,618 )

$ ( 25,327,198 )

Weighted average common shares outstanding (basic)

Basis (loss) per share from net loss $ ( 1.25 ) $ ( 2.56 )

Basic (loss) per share from net loss

Diluted (loss) per share calculation

Net (loss) available to common shareholders

$ ( 18,978,618 )

$ ( 25,327,198 )

Weighted average common shares outstanding (basic)

3 unchanged sentences

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.

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 identifies its operating segments

in accordance with ASC 280, Segment Reporting.

An operating segment is a component of an entity (a) that engages in business activities

from which it may earn revenues and incur expenses, (b) whose operating results are regularly reviewed by the chief operating decision

maker (CODM) to make decisions about resources to be allocated to the segment and assess its performance, and (c) for which discrete financial

information is available.

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.

Notes to Consolidated Financial Statements

The Company’s CODM is the Chief Executive

The CODM reviews revenue by geographic region as the primary basis for resource allocation and performance assessment.

revenue information is available for each region;

however, operating expenses, assets, liabilities, and capital expenditures are not allocated

to individual regions for internal reporting purposes and are managed on a consolidated basis.

Accordingly, the Company is treated as

a single reportable segment under ASC 280-10-50-1 for purposes of full segment disclosure.

Revenue by Geographic Region

The following table presents gross revenue disaggregated

by geographic region for the years ended December 31, 2025 and 2024, respectively.

Regions correspond to the sales territories through

which the Company distributes its products in the United States, Canada, and international markets.

Year ended December 31

International

Total Gross Revenue

Subsequent Events

The Company evaluated events and transactions

occurring after December 31, 2025 through May 29, 2026, the date these consolidated financial statements were available to be issued,

for subsequent events requiring recognition or disclosure.

On November 13, 2025, the Company received a notice

from its senior lender, FrontWell Capital Partners Inc.

(“FrontWell”), asserting the occurrence of Default under the credit

agreement dated August 10, 2023 (as amended, the “FrontWell Credit Agreement”).

On March 27, 2026, the Company, together with

its subsidiaries Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., and PGF Real Estate II, Inc.

(collectively, the “Forbearance

Parties”), entered into a Forbearance and Amendment Agreement with FrontWell (the “Forbearance Agreement”), pursuant

to which FrontWell agreed to forbear from exercising its rights and remedies with respect to specified defaults under the FrontWell Credit

Agreement through April 27, 2026, subject to compliance with certain conditions, including the retention of a Chief Restructuring Officer.

On April 27, 2026, the Company’s subsidiaries,

Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., and PGF Real Estate II, Inc.

(collectively, the “Borrowers”), entered

into a Credit Agreement (the “Oxus Credit Agreement”) with Oxus Capital PTE Ltd.

(“Oxus Capital”), a major shareholder

of the Company, as lender.

Borealis Foods Inc., Borealis IP Inc., and Palmetto Gourmet Foods (Canada) Inc.

are party to the Oxus Credit

Agreement as guarantors.

The Oxus Credit Agreement provides for a term loan facility in an amount of up to $ 17,000,000 (the “Term

Loan”), the proceeds of which were used to repay in full and discharge all outstanding obligations under the FrontWell Credit Agreement

and to pay associated transaction fees and expenses.

The Term Loan bears interest at 12 % per annum and matures on April 27, 2031.

is repayable in 48 consecutive monthly installments calculated on a straight-line basis over the amortization period, commencing on the

first payment date.

Interest payments commence on May 1, 2027;

provided that Oxus Capital has the option, at its sole election, to convert

all interest accrued during the first year of the loan into common equity of the Company in lieu of cash payment.

The Term Loan is secured

by a first-priority lien on substantially all assets of the Borrowers, including mortgages on the Company’s manufacturing facility

and distribution center located in Saluda, South Carolina.

In connection with the Oxus Credit Agreement, Oxus Capital is entitled to appoint

two members to the Company’s Board of Directors.

Additionally, Oxus Capital and the Company entered into a Subscription Agreement

pursuant to which the Company is obligated to raise not less than $ 70,000,000 in additional equity from investors acceptable to Oxus Capital

at a price of not less than $ 9.00 per share on or before June 30, 2026;

in the event such equity financing is not consummated by such

date, the Subscription Agreement provides for the conversion of outstanding convertible notes held by Oxus Capital into equity interests

of the Company.

The Oxus Credit Agreement constitutes a related party transaction as Oxus Capital is a major shareholder of the Company.

Between January 1, 2026 and May 29, 2026, the

Company received additional unsecured advances from the Chairman of the Board of Directors and Chief Executive Officer in the amounts

of $ 2,050,000 and $ 282,500 , respectively.

In addition, the Chief Executive Officer deferred approximately $ 208,000 in compensation during

this same period.

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