Borealis Foods Inc. 8-K

What Happened

• On Feb 2, 2026 Borealis Foods Inc. received a letter from counsel to Frontwell Capital Partners Inc. (the “Lender”) saying one or more Events of Default under the Credit Agreement (dated Aug 10, 2023) have occurred and continue. The Credit Agreement includes $15,000,000 in term loans and up to $10,000,000 in revolving loans.
• The letter identifies specific continuing defaults, including failure to maintain Excess Availability of at least $4,375,000 (Section 7.1) and failure to timely deliver monthly financials and compliance certificates for the months ended Oct. 31, 2025 and Nov. 30, 2025. The Lender previously notified the company of issues on or about Dec. 10, 2025.
• Because of these defaults and under Section 8.2(b) of the Credit Agreement, the Lender says it intends to impose additional general reserves: if the Loan Parties do not raise an additional $5,000,000 in equity or provide evidence of a satisfactory refinancing commitment within 14 days, the Lender will increase the general reserve by $200,000 and then by an additional $100,000 on each subsequent weekly anniversary until cured.

Key Details

• Credit Agreement date: August 10, 2023; term loans $15,000,000 principal; revolving facility up to $10,000,000.
• Specified defaults: Failure to maintain $4,375,000 Excess Availability; missing monthly financial statements for Oct. 31, 2025 and Nov. 30, 2025.
• Cure requirement: Raise $5,000,000 equity or show refinancing commitment within 14 days to avoid initial $200,000 reserve; thereafter $100,000 weekly increases until cured.
• Company states these reserve actions constitute triggering events that increase a direct financial obligation under Item 2.04.

Why It Matters

• For investors, this filing signals liquidity and covenant pressure: the lender can and intends to withhold additional availability by increasing reserves, which reduces cash available to the company and raises near‑term cash needs.
• The company must either raise $5M of equity or secure a refinancing commitment quickly to avoid escalating weekly reserve hits; failure to do so could tighten liquidity, restrict borrowing, and force more urgent capital actions.
• This is a material credit-related development (Item 2.04) affecting the company’s obligations and financial flexibility, and investors should watch for updates on any equity raises, refinancing commitments, or further lender actions.