Borealis Foods Inc. 10-K

Item 8. Financial Statements and Supplementary Data. The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report. An index of those financial statements is found in Item 15 of Part IV of this Annual Report. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. The 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. 42 BPB’s 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: BPB’s 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. There were no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K). Item 9.A. Controls and Procedures Limitations on effectiveness of controls and procedures In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Evaluation of disclosure controls and procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated, as of the end of the period covered by this Annual Report, the effectiveness of 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. Management’s annual report on internal control over financial reporting As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act, our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Borealis Foods’ internal control over financial reporting was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Borealis Foods’ internal control over financial reporting includes those policies and procedures that: 1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company, 2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and 3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“ COSO ”) in “Internal Control — Integrated Framework (2013).” Based on this assessment, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025, due to the material weakness described below 43 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: ● adequate segregation of duties across the financial reporting close process, including the preparation, review, and approval of journal entries, account reconciliations, and financial statement disclosures; ● sufficient 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; and ● effective 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 SEC’s rules. 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 ensure that: ● proposed related party transactions were identified and submitted for Audit Committee review and approval in advance of execution in all cases; ● the terms of proposed debt instruments were evaluated against the restrictive covenants of the Company’s existing credit agreements before issuance; and ● management 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: ● hiring 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 processes; ● enhancing 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; 44 ● 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; and ● engaging 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. 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, 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, 2025. Item 9.B. Other Information. Disclosure of Information That Would Have Been Required to Be Reported on Form 8-K 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. On November 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. The 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. In November 2025, in connection with the extension of the EarlyBirdCapital, Inc. promissory note described above, each of Mr. Helg and Mr. Soltanzadeh (through Zagros Alpine Capital ULC) provided 500,000 Common Shares as collateral for the Company’s obligations under the note. The shares 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 obligations. 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 During 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). Item 9.C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 45 Part III Item 10. Directors, Executive Officers, and Corporate Governance. Directors The following table sets forth the information concerning our directors, including their ages as of May 15, 2026. Name and Position Year First Became Director Age Independent Audit Committee Compensation Committee Nominating and Governance Committee Reza Soltanzadeh Director, Chief Executive Officer 2024 53 No Ertharin Cousin Director 2024 69 Yes Barthelemy Helg Non-executive Chairman and Director 2024 60 No Shukhrat Ibragimov Director 2024 40 Yes Pavel Mynzhanov Director 2026 43 No Steven Oyer* Director 2024 70 Yes Chairman* Chairman Chairman Zaure Algaziyeva* Director 2026 46 Yes X* X X Amin Ajami* Director 2026 57 Yes X* X X * Audit 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 Year First Became Officer Age Position/Title Reza Soltanzadeh 2019 53 Director and Chief Executive Officer Pouneh Rahimi 2019 58 Chief Legal Officer Stephen Wegrzyn 2020 61 Chief Financial Officer Matt Talle 2020 64 Chief Strategy Officer Henry Wong 2021 59 Chief Marketing Officer Biographical Information Directors 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. Dr. 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. Dr. Soltanzadeh obtained his M.D. from the University of Manipal, India. Dr. Soltanzadeh 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. 46 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. Ms. Cousin previously served at Stanford University as Payne Distinguished Lecturer and Visiting Fellow, Spogli Institute for the Study of International Relations, Center for Food and Environment from September 2017 to June 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. Ms. 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. Ms. Cousin currently serves as member of the Supervisory Board of Bayer AG and the Board of Directors of Mondelez International, Inc. Ms. 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. Ms. 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. Mr. Helg has served as Chairman of Dara Capital AG, a FINRA and SEC registered investment advisory and wealth management company since March 2015. Mr. 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. Mr. 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. Mr. Helg began his career as an investment banker at Goldman Sachs. Mr. 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. Mr. 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. Mr. 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. Mr. Ibragimov currently also serves as member of the Boards of Directors of Eurasia Insurance Company JSC, Eurasian Financial Company JSC, Eurasian Bank JSC. In 2020, Mr. Ibragimov founded Eurasian Space Ventures LLP (ESV) based in Kazakhstan, venture fund investing in startups in aerospace industry. Through ESV, Mr. Ibragimov controls BITEEU, a cryptocurrency exchange operating globally. Mr. Ibragimov also is a co-founder of SPRK Music, a music platform that helps musicians to be discovered via a dedicated platform. Mr. Ibragimov graduated from the European Business School London with a bachelor’s degree and the Beijing Language and Culture University with a masters’ degree. Mr. 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. The Board has determined that Mr. Oyer qualifies as an “audit committee financial expert” as defined under Item 407(d)(5) of Regulation S-K. Mr. 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. Mr. 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. Oyer served as interim Chief Executive Officer and led the restructuring of Saflink Corporation, a NASDAQ listed biometric software company. Mr. Oyer served as a board member and audit chair of Salton, Inc., a designer, marketer, manufacturer, and distributor of a broad range of branded small appliances. Mr. 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. Mr. Oyer attended the University of Massachusetts. Mr. 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. 47 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 . 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. Mr. 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 metrics. 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. Mr. 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. Mr. Ajami holds an M.Sc. in Petroleum Engineering from Imperial College London and a B.Eng. (Hons) in Aeronautical Engineering from Queen Mary University of London. 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. Ms. Algaziyeva is a senior executive with over 20 years of experience across FMCG production, logistics, and financial services. 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. Ms. 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. Algaziyeva’s 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. Mr. 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. Ltd. 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. Mr. 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 July 2019. Ms. 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. Ms. Rahimi has over 25 years of experience working with companies in the high-tech industry both as a lawyer and trusted business advisor. Ms. 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. Ms. Rahimi obtained her J.D. from the New England School of Law and her B.A. from McGill University. Ms. Rahimi is licensed to practice law in New York, Massachusetts, and Ontario. 48 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. Mr. 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. Mr. Wegrzyn began his career as an accountant at Ernst and Young. Mr. Wegrzyn 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. Talle served as Vice President of Business Development from June 2015 to December 2019, as Executive Vice President, Board of Director from March 2010 to June 2015, and from March 2008 to June 2010, Mr. Talle served as Vice President of Sales and Marketing. Mr. 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. Mr. 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. Mr. 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 Expert We have a standing Audit Committee of the board of directors. Mr. Oyer, Ms. Algaziyeva and Mr. Ajami currently serve as members of the Audit Committee, with Mr. Oyer serving as the chairperson of the Audit Committee. Our board of directors has determined that Mr. Oyer, Ms. 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. Oyer, Ms. 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 rules. 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. 49 Availability of Governance Documents The 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 they file. 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 follows: Name Number of Late Reports Number of Transactions Not Reported on a Timely Basis Known Failure to File Barthelemy Helg 1 1 None Zagros Alpine Capital ULC 1 1 None Amin Ajami 1 1 None Zaure Algaziyeva 1 1 None Pavel Mynzhanov 1 1 None Item 11. Executive Compensation. Our named executive officers (or “ NEOs ”) for the year ended December 31, 2025, consisted of five individuals: (i) Reza Soltanzadeh, our current Chief Executive Officer, who served as our principal executive officer during the year ended December 31, 2025; (ii) Stephen Wegrzyn, our current Chief Financial Officer, who served as our principal financial officer at the end of the fiscal year ended December 31, 2025; (iii) Pouneh Rahimi, our Chief Legal Officer, who was serving as our executive officer at the end of the fiscal year ended December 31, 2025; (iv) Henry Wong, our current Chief Marketing Officer, who was serving as our executive officer at the end of the fiscal year ended December 31, 2025; and (v) Matt Talle, our current Chief Strategy Officer, who was serving as our executive officer at the end of the fiscal year ended December 31, 2025. 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. 50 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 Year Salary ($) Bonus ($) Option Awards ($) Stock Awards ($) All Other Compensation ($) Total ($) Reza Soltanzadeh 2025 500,000 (1) — — — — 500,000 President and Chief Executive Officer 2024 450,998 — — — — 450,998 Stephen Wegrzyn 2025 178,000 — — — — 178,000 Chief Financial Officer 2024 178,000 — — — — 178,000 Pouneh Rahimi 2025 202,915 — — — — 202,915 Chief Legal Officer 2024 202,915 — — — — 202,915 Henry Wong 2025 183,365 — — — — 183,365 Chief Marketing Officer 2024 183,365 — — — — 183,365 Matt Talle 2025 280,110 — — — — 280,110 Chief Strategy Officer 2024 256,110 — — — — 256,110 (1) Mr. 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. Mr. Talle, Mr. Wegrzyn and Mr. Wong were not party to an employment agreement during 2025 or 2024. Ms. 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 elements: 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. 51 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 $300,000 in the aggregate. No grants were made under the equity incentive plan to NEOs in 2025. Health and Welfare Plans Our named executive officers are eligible to participate in the employee benefit plans that we offer to our employees generally, including medical, life and accidental death and dismemberment, and short- and long-term disability benefits in Canada and the United States, and basic and extended health care, dental, counseling services, disability, life and accidental death and dismemberment insurance and survivor benefits in Canada. Clawback Policy We adopted a compensation recovery policy (the “Company’s Clawback Policy”), which was effective March 27, 2024, that is compliant with the Nasdaq Listing Rules, as required by the Dodd-Frank Act. A copy of the Company’s Clawback Policy was previously filed as Exhibit 97.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on April 15, 2025, and is incorporated herein by reference. Outstanding Equity Awards at Fiscal Year End As of December 31, 2025, no NEO held any outstanding equity awards. Director Compensation The following table sets forth compensation earned by or paid to each non-employee director for the year ended December 31, 2025. Name Fees Earned or Paid in Cash ($) Stock Awards ($)(1) Option Awards ($) All Other Compensation ($) Total ($) Ertharin Cousin — 40,125 — — 40,125 Barthelemy Helg — 40,125 — — 40,125 Shukhrat Ibragimov — — — — — Steven Oyer — 40,125 — — 40,125 Shiv Vikram Khemka(2) — 40,125 — — 40,125 (1) 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. Mr. 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. 52 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 $ 16,666.66 Compensation Committee $ 16,666.66 Nominating and Corporate Governance Committee $ 16,666.66 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. Item 12. 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: ● each person who is the beneficial owner of more than 5% of the issued and outstanding Common Shares; and ● each of our named executive officers and directors. Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she, or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days of 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. To 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 Number of shares % of Total Voting Power Directors and Named Executive Officers of the Company (1) Reza Soltanzadeh (2) 3,160,452 14.72 % Barthelemy Helg (3) 2,718,056 12.66 % Stephen Wegrzyn (4) 33,046 * Pouneh Rahimi (5) 192,368 * Matt Talle (6) 214,665 * Henry Wong (7) 14,334 * Amin Ajami (8) 110,169 * Shukhrat Ibragimov (9) 3,224,880 15.03 % Steven Oyer (10) 14,500 * Ertharin Cousin (11) 12,500 * Zaure Algaziyeva 0 - Pavel Mynzhanov (12) 930 * All directors and executive officers as a group (12 individuals) 9,695,900 (13) 42.41 % Five or more Percent Holders Reza Soltanzadeh (2) 3,160,452 14.72 % Oxus Capital Pte. Ltd. (14) 13,772,119 39.09 % Belphar Ltd. (15) 2,848,955 13.27 % Barthelemy Helg (3) 2,718,056 12.66 % Alta Partners LLC (16) 1,435,364 6.27 % Sergii Diachenko (17) 3,072,471 12.52 % * Less than 1%. (1) Unless otherwise noted, the business address of each of the following entities or individuals is c/o Borealis Foods Inc. 1540 Cornwall Road, Suite 104, Oakville, Ontario L6J 7W5. 53 (2) Consists 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. (4) Consists of 33,046 Common Shares. (5) Consists of 192,368 Common Shares held by Zagros Alpine Capital ULC. Ms. 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. (6) Consists of (i) 80,962 Common Shares and (ii) 133,703 Common Shares held by Zagros Alpine Capital ULC. Mr. 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. Soltanzadeh in the table above by virtue of his sole voting control over Zagros Alpine Capital ULC. (7) Consists of 14,334 Common Shares. (8) Consists 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. Mr. 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. (10) Consists of 14,500 Common Shares. (11) Consists of 12,500 Common Shares. (12) Consists of 930 Common Shares. (13) 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. (14) 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. Ltd. 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 Ltd. is 3rd Floor, Yamraj Building, Market Square P.O. Box 3175 Road Town, Tortola British Virgin Islands . Mr. Ibragimov is the controlling shareholder. 54 (16) 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. (17) 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 outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders — — 1,041,415 Equity compensation plans not approved by security holders — — — Total — — 1,041,415 Item 13. Certain Relationships and Related Transactions, and Director Independence. 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. 55 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: (a) the risks, costs and benefits to the Company; (b) the 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; (c) the terms of the transaction; (d) the availability of other sources for comparable services or products; and (e) the 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”), as lender. 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. 56 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. Soltanzadeh, and 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. The 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. Mr. Soltanzadeh, the Company’s Chief Executive Officer, is the President and controlling person of Z Ventures Inc. and Zagros Alpine Capital ULC. Mr. 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 year 2025: Note Date Holder Name Amount Interest Rate Currency Maturity Date 20-May-25 Z Ventures Inc. $ 300,000.00 10 % USD Demand Note 20-May-25 Z Ventures Inc. $ 85,000.00 10 % USD Demand Note 20-May-25 Barthelemy Helg $ 200,000.00 10 % USD Demand Note 20-May-25 Barthelemy Helg $ 500,000.00 10 % USD Demand Note 20-May-25 Zagros Alpine Capital $ 200,000.00 10 % CAD Demand Note 20-May-25 Barthelemy Helg $ 1,000,000.00 10 % USD Demand Note 20-May-25 Barthelemy Helg $ 700,000.00 10 % USD Demand Note 15-Aug-25 Barthelemy Helg $ 150,000.00 10 % USD Demand Note 15-Aug-25 Barthelemy Helg $ 30,000.00 10 % USD Demand Note 19-Nov-25 Oxus Capital PTE LTD. $ 3,500,000.00 10 % USD June 30,2026 19-Nov-25 Z Ventures Inc. $ 500,000.00 10 % USD Demand Note 19-Nov-25 Barthelemy Helg $ 1,500,000.00 10 % USD Demand Note 19-Nov-25 Z Ventures Inc. $ 100,000.00 10 % USD Demand Note 19-Nov-25 Barthelemy Helg $ 300,000.00 10 % USD Demand Note 19-Nov-25 Z Ventures Inc. $ 300,000.00 10 % USD Demand Note 19-Nov-25 Barthelemy Helg $ 150,000.00 10 % USD Demand Note 19-Nov-25 Z Ventures Inc. $ 150,000.00 10 % USD Demand Note 19-Nov-25 Barthelemy Helg $ 150,000.00 10 % USD Demand Note 19-Nov-25 Z Ventures Inc. $ 150,000.00 10 % USD Demand Note 19-Nov-25 Z Ventures Inc. $ 120,000.00 10 % USD Demand Note 19-Nov-25 Barthelemy Helg $ 120,000.00 10 % USD Demand Note 19-Nov-25 Z Ventures Inc. $ 100,000.00 10 % USD Demand Note 19-Nov-25 Barthelemy Helg $ 100,000.00 10 % USD Demand Note 19-Nov-25 Z Ventures Inc. $ 86,305.00 10 % USD Demand Note 19-Nov-25 Barthelemy Helg $ 85,000.00 10 % USD Demand Note 19-Nov-25 Z Ventures Inc. $ 150,000.00 10 % USD Demand Note 19-Nov-25 Barthelemy Helg $ 150,000.00 10 % USD Demand Note 19-Nov-25 Z Ventures Inc. $ 150,000.00 10 % USD Demand Note 19-Nov-25 Barthelemy Helg $ 150,000.00 10 % USD Demand Note 19-Dec-25 Z Ventures Inc. $ 25,000.00 10 % USD Demand Note 19-Dec-25 Barthelemy Helg $ 25,000.00 10 % USD Demand Note 57 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 As 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. Helg and 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 that Mr. Helg and Mr. 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. Helg and 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 Officer; and Mr. 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; and Mr. Mynzhanov, who serves as a Director of Oxus Capital PTE Ltd., the Company’s lender under the Credit Agreement described above. 58 Item 14. Principal Accountant Fees and Services. Carr, Riggs & Ingram, LLC (“CRI”), (PCAOB ID: 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. Berkowitz 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: Fee Category For the year ended December 31, 2025 For the year ended December 31, 2024 Audit Fees (1) $ 264,561 $ 166,910 Audit-Related Fees (2) 17,750 127,348 Tax Fees(3) 20,373 6,319 All Other Fees(4) - 55,370 Total $ 302,684 $ 355,947 (1) Audit Fees. 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 Fees. Audit-related fees consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. (3) Tax Fees. Tax fees consist of fees billed for professional services relating to tax compliance, tax planning and tax advice. (4) All Other Fees. 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. 59 Part IV Item 15. Exhibits and Financial Statement Schedules (a)(1) Financial Statements. The following documents are included on pages F-1 through F-22 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 3.1* Form 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). 3.2* Form of Borealis Articles of Continuance (incorporated by reference to Exhibit 10.8 to Oxus Acquisition Corp.’s Registration Statement on S-4, filed with the SEC on August 14, 2023). 4.1* Description of 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) 4.2 + Warrant issued by Borealis Foods Inc. to EarlyBirdCapital, Inc. dated June 13, 2025. 4.3 + Warrant issued by Borealis Foods Inc. To EarlyBirdCapital, Inc. dated November 19, 2025. 10.1+ 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) 10.2* + 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). 10.4* 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). 10.5* 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). 10.6 Form of Borealis Foods Inc. Director and Officer Indemnification Agreement. 10.12* 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). 60 10.13* Conversion 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). 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). 16.1* Letter 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). 19.1* Borealis Foods Inc. 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). 23.1 Consent of Independent Registered Public Accounting Firm 31.1 Certification of Principal Executive Officer Pursuant to Rules 13A-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Financial Officer Pursuant to Rules 13A-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1* Borealis Foods Inc. 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). 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. 61 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Borealis Foods Inc. By: /s/ Reza Soltanzadeh Reza Soltanzadeh Chief Executive Officer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Name Title Date /s/ Reza Soltanzadeh Chief Executive Officer and Director June 2, 2026 Reza Soltanzadeh (principal executive officer) /s/ Stephen Wegrzyn Chief Financial Officer June 2, 2026 Stephen Wegrzyn (principal financial officer) /s/ Barthelemy Helg Director June 2, 2026 Barthelemy Helg /s/ Ertharin Cousin Director June 2, 2026 Ertharin Cousin Signature not provided Director June 2, 2026 Shukhrat Ibragimov /s/ Steven Oyer Director June 2, 2026 Steven Oyer /s/ Pavel Mynzhanov Director June 2, 2026 Pavel Mynzhanov /s/ Zaure Algaziyeva Director June 2, 2026 Zaure Algaziyeva /s/ Amin Ajami Director June 2, 2026 Amin Ajami 62 BOREALIS FOODS INC. FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2025 Table of Contents PART I. FINANCIAL INFORMATION Page Reports of Independent Registered Public Accounting Firms (PCAOB ID: 213 & 52 ) F-2 Financial Statements 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 F- 1 REPORT 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 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 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 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 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 that: (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. Palm Beach Gardens, FL June 1, 2026 F- 2 Borealis Foods Inc. and Subsidiaries Consolidated Balance Sheets December 31, 2025 December 31, 2024 Assets Current Assets Cash $ 63,859 $ 652,965 Accounts receivable, net of allowance for credit losses of $ 230,000 and $ 247,653 as of December 31, 2025 and December 31, 2024, respectively 2,648,229 1,965,748 Inventories, net 4,582,576 8,046,259 Prepaid expenses and other current assets 760,616 1,134,611 Total current assets 8,055,280 11,799,583 Property, plant and equipment, net 43,891,964 45,736,326 Intangible assets 298,041 319,307 Right - of-use asset, net 158,361 63,826 Goodwill - 1,917,356 Other non-current assets 169,685 169,685 Total assets $ 52,573,331 $ 60,006,083 Liabilities and Shareholders’ (deficit) Current liabilities: Accounts payable and accrued expenses $ 16,046,886 $ 11,529,803 Due to related parties 27,295,885 7,825,792 Line of credit, current portion 2,691,096 - Convertible notes payable, current portion 3,000,000 - Notes payable, current portion, net of capitalized loan costs 20,100,380 5,456,934 Operating lease payable, current portion 39,982 55,116 Finance leases payable, current portion 642,474 538,845 Total current liabilities 69,816,703 25,406,490 Due to related parties, net of current portion - 7,601,661 Line of credit, net of current portion - 7,600,000 Convertible notes payable, net of current portion - 3,000,000 Notes payable, net of current portion - 14,478,051 Operating lease payable, net of current portion 118,528 12,015 Finance leases payable, net of current portion 489,461 1,143,829 Deferred tax liability 1,379,226 1,459,923 Total liabilities 71,803,918 60,701,969 Shareholders’ (deficit) Common shares, no par value - - Additional paid-in capital 90,540,605 90,096,688 Accumulated deficit ( 109,771,192 ) ( 90,792,574 ) Total shareholders’ (deficit) ( 19,230,587 ) ( 695,886 ) Total liabilities and shareholders’ (deficit) $ 52,573,331 $ 60,006,083 See accompanying notes to the consolidated financial statements. F- 3 Borealis Foods Inc. and Subsidiaries Consolidated Statements of Operations For the Years Ended December 31, 2025 2024 Gross sales $ 31,475,628 $ 29,100,391 Sales discounts & allowances ( 1,396,057 ) ( 1,431,497 ) Revenue, net 30,079,571 27,668,894 Cost of goods sold 24,726,916 23,155,766 Depreciation and amortization 1,841,285 2,323,617 Total cost of goods sold 26,568,201 25,479,383 Gross profit 3,511,370 2,189,511 Total sales, general & administrative expenses 14,547,355 22,594,486 Loss from operations ( 11,035,985 ) ( 20,404,975 ) Other income (expense): Impairment loss ( 2,007,438 ) - (Loss) gain on foreign exchange rates ( 15,943 ) 3,554 Interest expense ( 5,985,962 ) ( 5,060,678 ) Total other expense ( 8,009,343 ) ( 5,057,124 ) Loss before income taxes ( 19,045,328 ) ( 25,462,099 ) Income tax benefit 66,710 134,901 Net loss $ ( 18,978,618 ) $ ( 25,327,198 ) Loss per share from net loss Basic $ ( 0.89 ) $ ( 1.25 ) Diluted ( 0.89 ) ( 1.25 ) Weighted average shares outstanding Basic 21,428,650 20,309,934 Diluted 21,428,650 20,309,934 See accompanying notes to the consolidated financial statements. F- 4 Borealis Foods Inc. and Subsidiaries Consolidated 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 Shares Common Stock Number of Shares Common Stock Number of Shares Common Stock Paid-In Capital Accumulated Deficit Total Balance at December 31, 2023 100,000,000 -- 57,117,774 -- 6,345,000 -- 44,118,081 ( 65,465,376 ) ( 21,347,295 ) Expense related to stock options (Note 9) -- -- -- -- -- -- 1,273,053 -- 1,273,053 Convertible debt converted to equity from reverse recapitalization -- -- -- -- -- -- 54,991,472 -- 54,991,472 Assumption of debt from reverse recapitalization -- -- -- -- -- -- ( 10,285,918 ) -- ( 10,285,918 ) Conversion to Newco shares from reverse recapitalization ( 78,621,110 ) -- ( 57,117,774 ) -- ( 6,345,000 ) -- -- -- -- Net loss -- -- -- -- -- -- -- ( 25,327,198 ) ( 25,327,198 ) Balance at December 31, 2024 21,378,890 $ -- -- $ -- -- $ -- $ 90,096,688 $ ( 90,792,574 ) $ ( 695,886 ) Exercise of restricted share units 2,962 -- -- -- -- -- 17,490 -- 17,490 Expense related to restricted share units -- -- -- -- -- -- 81,353 -- 81,353 Issuance of restricted share units 81,454 -- -- -- -- -- 345,074 -- 345,074 Net loss -- -- -- -- -- -- -- ( 18,978,618 ) ( 18,978,618 ) Balance at December 31, 2025 21,463,306 $ - $ - $ - $ - $ - $ 90,540,605 $ ( 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 F- 5 Borealis Foods Inc. and Subsidiaries Consolidated Statements of Cash Flows For the Year Ended December 31, 2025 For the Year Ended December 31, 2024 Cash Flows from Operating Activities: Net loss $ ( 18,978,618 ) $ ( 25,327,198 ) Adjustments to reconcile net loss to net cash used in operating activities: Non-cash compensation expense related to restricted share units and stock options $ 443,917 $ 1,273,053 Depreciation and amortization 1,841,286 2,323,617 Amortization of loan costs 498,728 310,964 Impairment loss 2,007,438 - Provision for credit losses ( 17,653 ) 23,220 Provision for inventory reserve ( 716,528 ) 703,450 Deferred income taxes ( 80,697 ) ( 106,309 ) Changes in operating assets and liabilities: Accounts receivable ( 664,828 ) ( 213,212 ) Inventories 4,180,210 ( 1,804,681 ) Prepaid expenses and other 373,995 ( 288,734 ) Operating lease ( 3,157 ) ( 3,138 ) Accounts payable and accrued expenses 4,517,084 8,019,425 Net cash used in operating activities $ ( 6,598,823 ) $ ( 15,089,543 ) Cash flows from investing activities Proceeds from reverse capitalization $ - $ 63,575 Purchases of intangible assets ( 68,816 ) ( 319,307 ) Purchases of property, plant and equipment 3,078 ( 1,651,403 ) Net cash used in investing activities $ ( 65,738 ) $ ( 1,907,135 ) Cash flows from financing activities Net payments from related parties $ 11,868,432 - Proceeds from convertible notes payable - 3,000,000 Payments on finance leases payable ( 550,740 ) ( 565,987 ) Borrowings on line of credit 8,410,937 7,600,000 Payments on line of credit ( 13,319,841 ) - Payments on notes payable ( 333,333 ) - Net cash provided by financing activities $ 6,075,455 $ 10,034,013 Net change in cash $ ( 589,106 ) $ ( 6,962,665 ) Cash, beginning of period 652,965 7,615,630 Cash, end of period $ 63,859 $ 652,965 Supplemental cash flow data Cash paid during the period for: Interest $ 1,036,259 $ 2,636,181 Income taxes $ 13,987 $ 14,948 Non-cash investing and financing activities Conversion of notes payable into Class A shares - $ ( 54,991,472 ) Note payable supplier finance - 2,747,833 Note payable accounted for as due to related party - 7,601,661 Operating lease renewal 222,771 See accompanying notes to the consolidated financial statements. F- 6 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements 1. Description of Business and Summary of Significant Accounting Policies Overview The accompanying consolidated financial statements include the financial statements of Borealis Foods Inc. (“ Borealis ”), and its subsidiaries: Palmetto Gourmet Foods (Canada) Inc., (“ PGF Canada ”), Palmetto Gourmet Foods, Inc. (“ PGF ”), PGF Real Estate I, Inc. (“ PGF RE I ”), PGF Real Estate II, Inc. (“ PGF RE II ”), and Borealis IP (“ Borealis IP ”) (collectively, the “ Company ”). Borealis is a food technology integrator with a mission to address global food security challenges through the development and commercialization of tasty, affordable and sustainable functional foods. Borealis has developed a range of high-quality, affordable, sustainable, and nutritious premium, ready-to-eat meals sold in the United States, Canada, Central America, South America and Europe. PGF Canada is a holding company, holding the shares of PGF. PGF is a food manufacturing company with a BRC AA+ rated food grade facility. PGF RE I and PGF RE II are holding companies that rent their fixed assets to PGF. Borealis IP holds the intellectual property of the Company. Intercompany balances and transactions have been eliminated in consolidation. Reverse Recapitalization Transaction On February 23, 2023, Borealis Foods Inc., a corporation incorporated under the laws of Canada (“ Legacy Borealis ”) entered into a Business Combination Agreement (as amended, amended and restated, supplemented, or otherwise modified from time to time, the “ Business Combination Agreement ”) with Oxus Acquisition Corp. (“ Oxus ”) and 1000397116 Ontario Inc., an Ontario corporation and a wholly owned subsidiary of Oxus (“ Newco ”). On February 7, 2024, Legacy Borealis, Oxus, and Newco consummated the transactions (collectively, the “ Reverse Recapitalization ”) contemplated by the Business Combination Agreement by means of a statutory arrangement under the Canada Business Corporations Act and the Business Corporations Act (Ontario), implemented in accordance with the terms and conditions set forth in the Business Combination Agreement and the related plan of arrangement (as amended, amended and restated, supplemented, or otherwise modified from time to time, the “ Plan of Arrangement ”) following the approval at an extraordinary general meeting of the shareholders of Oxus held on February 2, 2024. Pursuant to the terms of the Business Combination Agreement, among other things: (i) Oxus domesticated and continued as a corporation under the laws of Ontario, Canada (“ New Oxus ”); and (ii) pursuant to the Plan of Arrangement, (a) Newco and Legacy Borealis amalgamated (the “ Legacy Borealis Amalgamation ”, and the amalgamated corporation resulting therefrom, “ Amalco ”), with Amalco surviving the Legacy Borealis Amalgamation as a wholly-owned subsidiary of New Oxus; and (b) following the Legacy Borealis Amalgamation, New Oxus and Amalco amalgamated (the “ Borealis Amalgamation, ” and together with the Legacy Borealis Amalgamation, the “ Amalgamations ,” and the corporation resulting therefrom, “ Borealis ,” as a corporation amalgamated under the Business Corporations Act (Ontario)), with Borealis surviving the Borealis Amalgamation. Borealis continues under the name “ Borealis Foods Inc. ” The equity structure prior to the reverse merger (Class A, B and C) with unlimited amounts authorized all had the same rights and privileges. With the reverse recapitalization, all outstanding shares of Class A, B and C were combined into common shares of the newly formed Company. Accounting Impact of the Reverse Recapitalization The transaction was accounted for as a reverse recapitalization. Oxus was deemed the accounting predecessor and Borealis is the successor Securities and Exchange Commission (“ SEC ”) registrant. Under this method of accounting, Oxus was treated as the acquired company for financial statement reporting purposes. For accounting purposes, Legacy Borealis was deemed to be the accounting acquirer in the transaction and, consequently, the transaction was treated as a recapitalization of Legacy Borealis. Accordingly, the consolidated balance sheets and results of operations of Legacy Borealis became the historical financial statements of Borealis, and Oxus’ assets, liabilities, and results of operations were consolidated with Legacy Borealis’ beginning on February 7, 2024. The net assets of Oxus were recognized at carrying value, with no goodwill or other intangible assets recorded. Transaction costs incurred and unpaid by Oxus were converted into debt (Note 4) and shown as a reduction in additional paid-in capital. F- 7 Borealis Foods Inc. and Subsidiaries 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 doubt. 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. Subsequent to December 31, 2025, the Company completed the refinancing of its senior credit facility through a new Credit Agreement with Oxus Capital PTE Ltd. (“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. Dollar. Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Equivalents The Company classifies all highly liquid securities with stated maturities of three months or less from the date of purchase as cash equivalents. There were no cash equivalents as of December 31, 2025 and December 31, 2024. Inventories, net Inventories are stated at the lower of cost or net realizable value. The cost of raw materials is determined using the first-in, first- out method. The cost of finished goods is determined using the weighted average cost method. A reserve is recorded for any food inventory that is expired (or expected to expire before sale) and any raw materials for projects that have been discontinued. F- 8 Borealis Foods Inc. and Subsidiaries 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, 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. 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 Machine hours assets: Furniture, fixtures and equipment 89,232 machine hours Construction in progress includes the cost of property, plant and equipment being constructed or otherwise not yet in service. Costs include materials, labor, capitalized interest, engineering and testing costs, and other costs necessary to get the assets ready for their intended use. Intangible Assets Patents are recorded at cost and are amortized on a straight-line basis over their estimated useful lives. The carrying value of patents is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. A trademark impairment charge of $ 90,082 was recorded in Q4 2025, reducing the trademark balance to zero at December 31, 2025. Loan Costs The costs of obtaining equipment leases and debt issuance costs are amortized over the term of the respective obligations, using the straight-line method. US GAAP requires that the effective yield method be used to amortize debt issuance costs; however, the effect of using the straight-line method is not materially different from the results that would have been obtained under the effective yield method. Amortization of loan costs is included as a component of interest expense in the accompanying consolidated statements of operations. Loan costs are shown as reduction of related debt balances for financial statement presentation. Goodwill The Company’s goodwill resulted from a prior year acquisition. Goodwill is not amortized but is reviewed annually for impairment or more frequently as events or circumstances indicate its carrying amount may not be recoverable. A goodwill impairment charge of $ 1,917,356 was recorded in Q4 2025, reducing the goodwill balance to zero at December 31, 2025. F- 9 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements Amounts Due to Related Parties 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 31, 2025. 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. The 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. These sales contain a single performance obligation. Revenue is recognized at a point in time and the Company recognizes revenue upon shipment of goods when ownership, risk, and rewards transfer to the customer. Certain of the Company’s contracts with customers include variable consideration consisting of payment discounts and promotions. These programs include rebates, temporary on-shelf price reductions, off-invoice discounts, retailer advertisements, product coupons, slotting fees and other trade activities. Provision for discounts and incentives are recorded in the same period in which the related revenues are recognized. Gross revenues were approximately $ 31,476,000 and $ 29,100,000 for the years ended December 31, 2025 and 2024, respectively. Total payment discounts and promotions were approximately $ 1,396,000 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 customers are continuously monitored and an allowance for credit losses is maintained based on historical experience adjusted for current conditions and reasonable forecasts taking into account geographical and industry-specific economic factors. The Company also considers specific customer collection issues. Since the Company’s accounts receivable are largely similar, the Company evaluates its allowance for credit losses as one portfolio segment. At origination, the Company evaluates credit risk based on a variety of credit quality factors including prior payment experience, customer financial information, credit ratings, probabilities of default, industry trends and other internal metrics. On a continuing basis, data for each major customer is regularly reviewed based on past-due status to evaluate the adequacy of the allowance for credit losses; actual write-offs are charged against the allowance. The Company incurred significant production training expenses for the years ended December 31, 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. F- 10 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements Advertising Costs associated with advertising are expensed as incurred and are included in selling, general and administrative expenses. Advertising costs expensed for the years ended December 31, 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, 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 $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. F- 11 Borealis Foods Inc. and Subsidiaries 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: Level 1: Observable inputs, such as quoted market prices in active markets for the identical asset or liability that are accessible at the measurement date. Level 2: Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly for the asset or liability. Level 3: Unobservable inputs that reflect the entity’s own assumptions about the exit price of the asset or liability. Unobservable inputs may be used if there is little or no market data for the asset or liability at the measurement date. The Company does not have assets measured at fair value on a recurring basis. The following methods and assumptions were used to estimate the fair value of each class of financial instruments: The carrying amounts reported in the consolidated balance sheets for accounts receivable and accounts payable approximate their fair values due to the short-term nature of these instruments. There is no material difference between the carrying amounts and fair values of the Company’s debt obligations, notes payable, line of credit and convertible notes payable, as interest rates approximate current market rates for similar types of debt instruments (Level 2). Disclosures about the fair value of financial instruments are based on pertinent information available to management as of December 31, 2025 and December 31, 2024. 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. F- 12 Borealis Foods Inc. and Subsidiaries 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. Warrants Outstanding warrants were assumed at the Reverse Recapitalization. The fair value of the warrants was determined using the Monte Carlo analysis at the date of the transaction. The Company accounts for its Public and Private warrants as equity- classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ ASC 480 ”) and ASC 815, Derivatives and Hedging (“ ASC 815 ”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent year end date while the warrants are outstanding. It was determined at the Transaction Date that there were no changes to the classes or language that would impact the original assessment that the Public and Private warrants should be classified as equity. Shipping and Handling Costs Shipping and handling costs are expensed as incurred and are included in general and administrative expense in the consolidated statements of operations. Recent Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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 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): 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. See notes 5, income taxes, for the required disclosures. F- 13 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 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. ASU No. 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. In December 2025, the FASB issued ASU No. 2025-11, 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. ASU No. 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. ASU No. 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. 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. 2. Inventories, net Inventories were as follows: December 31, December 31, 2025 2024 Raw materials $ 3,930,750 $ 6,712,529 Finished goods 827,381 2,225,813 Reserve for obsolete inventory ( 175,555 ) ( 892,083 ) $ 4,582,576 $ 8,046,259 3. Property, Plant and Equipment, Net Property, plant and equipment were as follows: December 31, December 31, 2025 2024 Building and improvements $ 10,110,188 $ 10,110,188 Furniture, fixtures and equipment 48,632,985 48,517,228 Construction in progress 760,387 879,220 59,503,560 59,506,636 Less: accumulated depreciation ( 15,611,596 ) ( 13,770,310 ) $ 43,891,964 $ 45,736,326 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. F- 14 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements 4. Debt 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. 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, 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 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 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 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 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 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: $ 25,792,000 in 2026; $ 0 in 2027; and $ 0 in 2028. 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. Principal 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. 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. Helg and 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. F- 15 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements 5. Income Taxes The Company accounts for income taxes using the liability method. Deferred income tax assets and liabilities are determined based on differences between the financial statement and income tax basis of the respective assets and liabilities, using enacted tax rates in effect for the years when the differences are expected to reverse. Borealis is taxed under Canadian tax laws at a rate of 26.5 %. Borealis does not file a consolidated tax return. PGF, PGF RE I, and PGF RE II (the “United States subsidiaries”) are taxed as C corporations, with a statutory rate of 21 %. (Loss) income before income tax expense (benefit) for the years ended December 31, 2025 and 2024 is as follows 2025 2024 U.S. Income (Loss) before Tax $ ( 11,997,676 ) $ ( 4,635,408 ) 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 as follows 2025 2024 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 December 31, 2025 2024 Current provision Federal $ - $ ( 832 ) State ( 13,987 ) ( 14,116 ) Foreign - 43,540 Current benefit (provision) for income taxes $ ( 13,987 ) $ 28,592 Deferred provision Federal $ ( 2,021,580 ) $ ( 4,628,566 ) State ( 379,524 ) ( 903,382 ) Foreign ( 1,750,184 ) ( 891,677 ) Valuation allowance for unrealizable net deferred tax assets 4,231,985 6,529,934 Deferred benefit/(provision) for income taxes $ 80,697 $ 106,309 Total benefit/(provision) for income taxes $ 66,710 $ 134,901 F- 16 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements The Company adopted ASU 2023-09 “Income Taxes (Topic 740): Improvements 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 Amount Percent U.S. federal statutory tax rate $ ( 3,999,732 ) 21.00 % State income taxes, net of federal income tax effect $ ( 391,090 ) 2.05 % Foreign tax effects $ - 0.00 % Canada $ - 0.00 % Statutory tax rate difference between Canada and United States $ ( 363,246 ) 1.91 % Stock Options $ 93,223 ( 0.49 ) % Other Adjustments $ 59 0.00 % Changes in valuation allowance $ 1,750,184 ( 9.19 ) % Changes in valuation allowance $ 2,481,801 ( 13.03 ) % Nontaxable or nondeductible items $ - 0.00 % Impairment Loss $ 402,645 ( 2.11 ) % Other Adjustments $ 3,494 ( 0.02 ) % Deferred tax true-ups $ ( 44,048 ) 0.23 % Other adjustments $ - 0.00 % Other Effective tax rate - (Benefit)/provision $ - 0.00 % $ ( 66,710 ) 0.35 % 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: 2024 Amount Federal tax expense 21.00 % State tax expense 3.23 % Statutory tax rate difference between Puerto Rico and United States ( 27.81 )% Changes in valuation allowance 1.39 % Other 1.77 % Provision for income taxes ( 0.42 )% Significant components of the Company’s deferred tax assets are as follows: As of December 31, Deferred tax assets: 2025 2024 Net operating losses carried forward $ 31,762,682 $ 26,153,662 Other deferred tax assets 164,721 294,263 Total deferred tax assets $ 31,927,403 $ 26,447,925 Deferred tax (liabilities): Property, plant and equipment $ ( 6,832,156 ) $ ( 5,663,837 ) Total deferred tax (liabilities) ( 6,832,156 ) ( 5,663,837 ) Valuation allowance ( 26,474,473 ) ( 22,244,011 ) Net deferred tax assets/(liabilities) $ ( 1,379,226 ) $ ( 1,459,923 ) 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 periods. 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. F- 17 Borealis Foods Inc. and Subsidiaries 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 and Canada. 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. The federal 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. F- 18 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements 6. Contingencies From time to time, the Company is involved in legal proceedings in the normal course of business. Management does not believe that the final resolution of any such legal proceedings will have a material effect on the consolidated financial position or results of operations of the Company. 7. Leases The Company leases certain equipment from third-parties. The determination of whether an arrangement is a lease is made at the lease’s inception. In accordance with US GAAP, a contract is (or contains) a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. Right-of-use (“ ROU ”) assets represent the Company’s right to use an underlying asset for the lease term, and lease obligations represent the Company’s obligation to make lease payments over that term. ROU assets and lease obligations are recognized at the lease commencement date based on the present value of lease payments calculated using the implicit rate when it is readily determinable. In the absence of an implicit rate, management may use the Company’s incremental borrowing rate based on the information available at lease commencement. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. ROU assets associated with operating leases recorded net of accumulated amortization were approximately $ 158,000 and $ 64,000 as of December 31, 2025 and December 31, 2024, respectively. ROU 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, the Company recognized rent expense associated with leases as follows: 2025 2024 Operating lease cost: Fixed rent expense $ 46,123 $ 44,643 Finance lease cost: Amortization of ROU assets 636,034 636,034 Net lease cost $ 682,157 $ 680,677 Lease cost - SG&A $ 46,123 $ 44,643 Lease cost - Depreciation and Amortization 636,034 636,034 Net lease cost $ 682,157 $ 680,677 F- 19 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements ROU assets and lease liabilities consist of the following as of December 31, 2025 and 2024: 2025 2024 Operating leases - ROU assets: Operating lease, ROU assets, gross $ 161,598 $ 179,849 Accumulated amortization ( 3,237 ) ( 116,023 ) Operating leases - ROU assets, net $ 158,361 $ 63,826 Operating lease liabilities: Operating leases, current portion $ 39,982 $ 55,116 Operating leases, non-current portion 118,528 12,015 Total operating lease liabilities $ 158,510 $ 67,131 Finance leases, ROU assets: Property and equipment, gross $ 3,180,169 $ 3,180,169 Accumulated depreciation ( 2,425,725 ) ( 1,789,691 ) Finance leases, ROU assets, net $ 754,444 $ 1,390,478 Finance lease liabilities: Finance leases payable, current portion $ 642,474 $ 538,845 Finance leases payable, non-current portion 489,461 1,143,829 Total finance lease liabilities: $ 1,131,935 $ 1,682,674 Future minimum payments due under operating and finance leases as of December 31, 2025 consisted of the following: Years Ending December 31, Operating Leases Finance Leases 2026 $ 54,051 $ 776,818 2027 54,795 519,093 2028 55,751 - 2029 23,484 - Total 188,081 1,295,911 Less: effect of discounting ( 29,571 ) ( 163,976 ) Lease liability recognized $ 158,510 $ 1,131,935 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. F- 20 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements 8. Warrants The following represents a summary of warrants outstanding and exercisable on December 31, 2025: Description Issue Date Classification Exercise Price Expiration Date Outstanding Shares Exercisable Shares Private Placement Warrants 9/13/2021 Equity $ 11.50 2/7/2029 9,300,000 9,300,000 Public Warrants 9/13/2021 Equity $ 11.50 2/7/2029 17,250,000 17,250,000 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 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. 9. 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, 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 3.81 % Expected term (years) 5 - 10 Expected volatility 80.00 % Dividend yield 0.00 % For the years ended December 31, 2025 and 2024, 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 Average Exercise Price Weighted Remaining Contractual Life(Years) Options outstanding at December 31, 2023 3,666,426 $ 0.0001 8.10 Granted 333,574 0.0001 8.10 Exercised ( 4,000,000 ) 0.0001 — Expired or forfeited — — — Options outstanding at December 31, 2024 — — Granted — — — Exercised — — — Expired or forfeited — — — Options outstanding at December 31, 2025 — — F- 21 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements Restricted Stock Restricted Stock Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2023 — — Granted 16,954 5.83 Vested — — Forfeited — — Outstanding at December 31, 2024 16,954 5.83 Granted 120,000 3.21 Vested ( 124,454 ) 3.57 Forfeited — — Outstanding at December 31, 2025 12,500 3.21 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. RSUs 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. The 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. The purpose of the plan is to attract, retain and incentivize eligible participants and align their interests with those of shareholders through equity-based compensation. 10. Earnings per share Basic earnings or loss per share is based on the weighted average number of common shares outstanding for the period. For the purposes of calculating diluted earnings per share, the number of shares outstanding has been adjusted for the dilutive effects of warrants. For Years Ended December 31, December 31, 2025 2024 Basic (loss) per share calculation Net (loss) available to common shareholders $ ( 18,978,618 ) $ ( 25,327,198 ) Weighted average common shares outstanding (basic) 21,428,650 20,309,934 Basic (loss) per share from net loss $ ( 0.89 ) $ ( 1.25 ) Diluted (loss) per share calculation Net (loss) available to common shareholders $ ( 18,978,618 ) $ ( 25,327,198 ) Weighted average common shares outstanding (basic) 21,428,650 20,309,934 Warrants — — Weighted average common shares outstanding (diluted) 21,428,650 20,309,934 Diluted (loss) per share from net loss * $ ( 0.89 ) $ ( 1.25 ) * In periods where the Company has incurred a net loss, diluted earnings per share is based on the number of common shares issued and outstanding as including the effects of warrants would be anti-dilutive. 11. Segment Reporting The Company has a single reportable segment focused around sale of similar products. This reportable segment derives revenues from the manufacture and sale of high quality, affordable and nutritious ready to eat meals. The Company 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. F- 22 Borealis Foods Inc. and Subsidiaries Notes to Consolidated Financial Statements The Company’s CODM is the Chief Executive Officer. The CODM reviews revenue by geographic region as the primary basis for resource allocation and performance assessment. Discrete 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 2025 2024 Southeast $ 10,695,000 $ 11,933,000 Midwest 9,446,000 4,307,000 Southwest 3,400,000 2,731,000 Northeast 2,441,000 1,547,000 Mountain 2,186,000 1,422,000 Pacific 1,839,000 5,109,000 International 1,469,000 2,051,000 Total Gross Revenue $ 31,476,000 $ 29,100,000 12. 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. Principal 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. F- 23