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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

~~September~~ 30March 31, ~~2025~~2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Borealis Foods Inc.

(Exact name of registrant as specified in its charter)

Ontario		001-40778		98-1638988
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification Number)

1540 Cornwall Rd. #104 Oakville, Ontario, Canada		L6J 7W5
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (905) 278-2200

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class: Trading Symbol: Name of Each Exchange on Which Registered: Common Shares BRLS Nasdaq Capital Market Warrants BRLSW Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November~~June 1930, ~~2025~~2026, 21,463,306 Common Shares of the registrant, no par value, were issued and outstanding.

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) filed by Borealis Foods Inc. (the “Company” or “Borealis Foods”, “our”, “us” or “we”) contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements regarding the financial position, business strategy and the plans and objectives of management for future operations. These statements constitute projections, forecasts, and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. When we discuss our strategies or plans, we are making projections, forecasts, or forward-looking statements. Such statements are based on the beliefs of, as well as assumptions made by and information currently available to, Borealis Foods’ management.

Forward-looking statements ~~involve~~may ~~risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks and uncertainties~~ include, ~~but~~for ~~are not limited to~~example, statements ~~the following~~about:

●

our senior secured debt is held by a related party that also holds a significant equity position and has the right to appoint directors to our Board, which may create conflicts of interest;

●

approximately $29.1 million of shareholder indebtedness (plus approximately $4.3 million of accrued interest as of June 30, 2026) is contractually subject to automatic conversion into Common Shares on or after July 1, 2026 if we do not consummate equity financings of at least $70.0 million at $9.00 per share, although such conversion is deferred pending receipt of shareholder approvals required under Nasdaq Listing Rules 5635(b) and 5635(d), and any such conversion when effected would result in substantial dilution to existing shareholders;

●

our Board of Directors has been reconstituted at the direction of our lender, and the lender-appointed directors may not act independently of the lender’s interests in all circumstances;

●

our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern;

●

our limited operating history makes it difficult to evaluate our business and prospects;

● our potential insolvency or inability to pay our ~~debts~~debt would have a material adverse effect on our business, financial condition, results of operations and cash flow;

●

we may be unable to execute our business plan or maintain our competitive position and high-level customer satisfaction if we fail to maintain adequate operational and financial resources or fail to obtain additional financing, particularly if we continue to grow rapidly;

●

we have a substantial debt burden, a significant portion of which matures soon and requires repayment or refinancing;

●

our management team has limited experience managing a public company;

●

we are an early stage and emerging growth company and, as such, we are subject to all the risks associated with early stage and emerging growth companies;

● we have identified material weaknesses in our internal control over financial reporting; if we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, ~~investors~~shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our Common Shares;

●

a significant portion of our revenue is concentrated with a limited number of customers;

●

adverse climate conditions may have an adverse effect on our business. We may take various actions to mitigate our business risks associated with climate change, which may require us to incur substantial costs and may not be successful, due to, among other things, the uncertainty associated with the longer-term projections associated with managing climate risks;

●

our dependence on suppliers may materially adversely affect our operating results and financial position;

●

manufacturing and production forecasts are based on multiple assumptions. We must adequately estimate our manufacturing capacity and inventory supply. If we overestimate our demand and overbuild our capacity or inventory, we may have significantly underutilized assets. Underutilization of our manufacturing facilities can adversely affect our gross margin and other operating results;

● our business operations and financial results could be adversely affected by ~~changes~~the inevolving U.S.-Canada trade ~~policies~~environment , including ~~the~~tariffs ~~imposition~~under ofSection ~~new~~232 ~~tariffs~~and orSection ~~trade~~122 ~~restrictions~~of byapplicable ~~the~~ U.S. ~~government. With tariffs and other~~ trade ~~barriers~~laws, ~~between~~Canadian counter-tariffs, the ~~U.S.~~outcome ~~and~~of Canada,-United States-Mexico ~~and~~Agreement ~~other~~(CUSMA) ~~jurisdictions,~~review ~~our~~process ~~sales, profitability,~~ and ~~competitive~~other ~~position~~changes in ~~those~~trade ~~markets could be negatively impacted~~policies;

●

our business operations and financial results have been and could continue to be adversely affected by the 2026 Iran war, including the closure of the Strait of Hormuz and resulting disruptions to global energy, commodity, and supply chain markets;

●

we previously received a notice from the Nasdaq Listing Qualifications Department regarding non-compliance with Nasdaq Listing Rule 5620(a) (annual meeting requirement), and although we held our annual meeting of shareholders on June 29, 2026, we have not yet received confirmation from Nasdaq that we have regained compliance;

●

we may experience volatility in costs for ingredients and packaging due to conditions that are difficult to predict;

● ~~our~~issuances ~~future~~of ~~success~~Common ~~will~~Shares ~~depend,~~upon inconversion ~~part,~~of onrelated-party ~~our~~indebtedness ~~ability~~under tothe ~~maintain~~Conversion ~~our~~Agreement ~~technological~~and ~~leadership,~~the ~~enhance~~May ~~our~~29, ~~current~~2026 ~~food~~convertible ~~products,~~promissory ~~develop~~note ~~new~~issued ~~food~~to ~~products~~Oxus ~~that~~Capital ~~meet~~are ~~changing~~expected ~~customer~~to ~~needs~~require ~~and~~shareholder ~~preferences,~~approval ~~advertise~~under ~~and~~Nasdaq ~~market~~Listing ~~our~~Rules ~~food products~~5635(b), ~~and~~which ~~influence~~approval ~~and~~has ~~respond~~not tobeen ~~emerging~~obtained ~~industry~~and ~~standards~~was ~~and~~not ~~other~~sought ~~technological~~at ~~changes~~our onJune a29, ~~timely~~2026 ~~and~~annual ~~cost-effective~~meeting ~~basis~~of shareholders;

● a $3.0 million convertible promissory note we issued to our ~~business~~controlling ~~depends~~shareholder on ~~our~~May ~~use~~29, of2026 ~~proprietary~~is ~~technology~~convertible ~~relying~~at ~~heavily~~$1.45 onper ~~laws~~share tointo ~~protect~~approximately 2.07 million Common Shares upon receipt of required Nasdaq shareholder approvals, and any such ~~technology~~conversion would dilute existing shareholders;

●

U.S. shareholders may not be able to obtain judgments or enforce civil liabilities against us or our executive officers or our Board of Directors (our “Board”);

● we will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives; and

●

other risk factors and uncertainties described in this Quarterly Report, our most recent Annual Report on Form 10-K, and other filings with the SEC.

We urge investors to consider all of the risks, uncertainties, and other factors disclosed in this filing carefully in evaluating the forward-looking statements contained in this Quarterly Report. We cannot assure you that the results or developments anticipated by us and reflected or implied by any forward-looking statement contained in this report will be realized or, even if substantially realized, that those results or developments will result in the forecasted or expected consequences for us or affect us, our operations or financial performance as we forecasted or expected. These forward looking statements are based on information available as of the date of this Quarterly Report and current expectations, forecasts, and assumptions, and involve a number of judgments, risks, and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws. We intend the forward-looking statements contained in this Quarterly Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the “Securities Act”, and Section 21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act”.

As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. You should not place undue reliance on our forward-looking statements.

		Page
PART I. FINANCIAL INFORMATION		1
Item 1.	Unaudited Condensed Consolidated Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets	1
	Unaudited Condensed Consolidated Statements of Operations	2
	Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity (Deficit)	3
	Unaudited Condensed Consolidated Statements of Cash Flows	4
	Notes to the Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1817
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
PART II. OTHER INFORMATION		29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
SIGNATURES		32

Borealis Foods, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets

	September 30, 2025			December 31, 2024 (Audited)
	March 31, 2026			December 31, 2025 (Audited)
Assets
Current Assets:
Current Assets
Cash	$	~~128~~479,~~869~~857		$	~~652~~63,~~965~~859
Accounts receivable, net of allowance for credit losses of $280,000 and $247,653 as of September 30, 2025 and December 31, 2024, respectively		2,574,783			1,965,748
Accounts receivable, net of allowance for credit losses of $197,003 and $230,000 as of March 31, 2026 and December 31, 2025, respectively		1,742,569			2,648,229
Inventories, net		53,~~997~~532,~~898~~536			84,~~046~~582,~~259~~576
Prepaid expenses and other current assets		~~769~~1,~~073~~069,601			1760,~~134,611~~616
Total current assets		96,~~470~~824,~~623~~563			118,~~799~~055,~~583~~280
Property, plant and equipment, net		4443,~~325~~505,~~607~~919			4543,~~736~~891,~~326~~964
Intangible assets		~~383~~298,~~710~~041			~~319~~298,~~307~~041
Right - of-use asset, net		30148,~~615~~371			63158,~~826~~361
Goodwill		1,917,356			1,917,356
Other non-current assets		169,685			169,685
Total assets	$	5650,~~297~~946,~~596~~579		$	6052,~~006~~573,~~083~~331
Liabilities and Shareholders’ (deficit)
Current liabilities:
Accounts payable and accrued expenses	$	1417,~~030~~363,~~501~~227		$	1016,~~802~~046,~~524~~886
Due to related parties		1928,~~134~~717,~~580~~709			727,~~825~~295,~~792~~885
Line of credit, current portion		102,~~149~~209,~~641~~383			~~727~~2,~~279~~691,096
Notes payable, current portion, net of capitalized loan costs		20,166,932			5,456,934
Convertible notes payable, current portion		3,000,000			3,000,000
Operating lease payable, current portion		31,710			55,116
Notes payable, current portion, net of capitalized loan costs		19,850,380			20,100,380
Finance leases payable, current portion		606,031			538,845
Operating lease payable, current portion		37,912			39,982
Total current liabilities		64,119,395			25,406,490
Finance leases payable, current portion		668,338			642,474
Due to related parties, net of current portion		-			7,601,661
Total current liabilities		71,846,949			69,816,703
Line of credit, net of current portion		-			7,600,000
Operating lease payable, net of current portion		110,928			118,528
Convertible notes payable, net of current portion		3,000,000			3,000,000
Finance leases payable, net of current portion		312,356			489,461
Notes payable, net of current portion		-			14,478,051
Deferred tax liability		1,379,226			1,379,226
Operating lease payable, net of current portion		-			12,015
Total liabilities		73,649,459			71,803,918
Finance leases payable, net of current portion		666,856			1,143,829
Deferred tax liability		1,459,923			1,459,923
Total liabilities		69,246,174			60,701,969
Shareholders’ (deficit)
Common Stock, no par value		-			-
Common shares, no par value		-			-
Additional paid-in capital		90,~~412~~580,~~531~~730			90,~~096~~540,~~688~~605
Accumulated deficit		(~~103~~113,~~361~~283,~~109~~610	)		(90109,~~792~~771,~~574~~192	)
Total shareholders’ (deficit)		(1222,~~948~~702,~~578~~880	)		(~~695~~19,~~886~~230,587	)
Total liabilities and shareholders’ (deficit)	$	5650,~~297~~946,~~596~~579		$	6052,~~006~~573,~~083~~331

See accompanying notes to the unaudited condensed consolidated financial statements.

Borealis Foods, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
	2025			2024			2025			2024
	2026			2025
Gross sales	$	7,~~364~~782,~~072~~208		$	87,~~075~~224,~~788~~957		$	~~22,164,899~~		$	~~22,036,285~~
Sales discounts & allowances		(~~260~~414,~~323~~425	)		(~~387~~379,~~889~~287	)		~~(1,027,210~~	)		~~(1,127,673~~	)
Revenue, net		7,~~103~~367,~~749~~783			76,~~687~~845,~~899~~670			~~21,137,689~~			~~20,908,612~~
Cost of goods sold		56,~~609~~142,~~977~~848			5,~~953~~465,~~089~~314			~~17,274,802~~			~~17,109,095~~
Depreciation and amortization		~~453~~386,~~214~~044			~~461~~480,~~540~~554			~~1,407,642~~			~~1,861,351~~
Total cost of goods sold		6,~~063~~528,~~191~~892			65,~~414~~945,~~629~~868			~~18,682,444~~			~~18,970,446~~
Gross profit		1838,~~040,558~~891			1899,~~273,270~~802			~~2,455,245~~			~~1,938,166~~
Total sales, general & administrative expenses		2,~~965~~900,~~415~~040			43,~~894~~816,~~318~~920			~~10,653,223~~			~~17,721,575~~
Loss from operations		(12,~~924~~061,~~857~~149	)		(32,~~621~~917,~~048~~118	)		~~(8,197,978~~	)		~~(15,783,409~~	)
Other (expense):
Other income (expense):
Gain on foreign exchange rates		(936	)		(2,765	)		(14,203	)		3,368
Loss on foreign exchange rates		(1,143	)		(11,047	)
Interest expense, net		(1,855,028	)		(1,207,524	)		(4,342,367	)		(3,766,542	)
Interest expense		(1,450,126	)		(1,259,423	)
Total other expense		(1,~~855~~451,~~964~~269	)		(1,~~210~~270,~~289~~470	)		~~(4,356,570~~	)		~~(3,763,174~~	)
Loss before income taxes		(3,~~780~~512,~~821~~418	)		(4,~~831~~187,~~337~~588	)		~~(12,554,548~~	)		~~(19,546,583~~	)
Income tax expense		-			~~(832~~-	)		~~(13,987~~	)		~~(14,948~~	)
Net loss	$	(3,~~780~~512,~~821~~418	)	$	(4,~~832~~187,~~169~~588	)	$	~~(12,568,535~~	)	$	~~(19,561,531~~	)
Loss per share from net loss
Basic	$	(0.1816	)	$	(0.2320	)	$	~~(0.59~~	)	$	~~(0.98~~	)
Diluted	$	(0.1816	)	$	(0.2320	)	$	~~(0.59~~	)	$	~~(0.98~~	)
Weighted average shares outstanding											-
Basic		21,~~463~~428,~~415~~650			21,~~378~~379,~~890~~347			~~21,416,970~~			~~19,951,016~~
Diluted		21,~~463~~428,~~415~~650			21,~~378~~379,~~890~~347			~~21,416,970~~			~~19,951,016~~

See accompanying notes to the unaudited condensed consolidated financial statements.

Borealis Foods, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in ~~Stockholders~~Shareholders’ Equity (Deficit) (Unaudited)

~~Nine~~Three Months Ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025

	Class A Common Stock					Class B Common Stock					Class C Common Stock					~~Additional~~
	Number of			Common		Number of			Common		Number of			Common		Additional Paid-In			Accumulated
	Shares			Stock		Shares			Stock		Shares			Stock		Capital			Deficit			Total
Balance at January 1, 2024		100,000,000		$	--		57,117,774		$	--		6,345,000		$	--	$	44,118,081		$	(65,465,376	)	$	(21,347,295	)
Balance at January 1, 2025		21,378,890		$	--		--		$	--		--		$	--	$	90,096,688		$	(90,792,574	)	$	(695,886	)
Expense related to stock options (Note 8)		--			--		--			--		--			--		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	)
Coversion to Newco shares from reverse recapitalization		(78,621,110	)		--		(57,117,774	)		--		(6,345,000	)		--		--			--			--
Net loss		--			--		--			--		--			--		--			(8,431,622	)		(8,431,622	)
Balance at March 31, 2024		21,378,890		$	--		--		$	--		--		$	--	$	90,096,688		$	(73,896,998	)	$	16,199,690
Net loss		--			--		--			--		--			--		--			(6,297,740	)		(6,297,740	)
Balance at June 30, 2024		21,378,890		$	--		--		$	--		--		$	--	$	90,096,688		$	(80,194,738	)	$	9,901,950
Net loss		--			--		--			--		--			--		--			(4,832,169	)		(4,832,169	)
Balance at September 30, 2024		21,378,890		$	--		--		$	--		--		$	--		90,096,688			(85,026,907	)		5,069,781
Balance at January 1, 2025		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		--			--		--			--		--			--		40,676			--			40,676
Net loss		--			--		--			--		--			--		--			(4,187,588	)		(4,187,588	)
Balance at March 31, 2025		21,381,852		$	--	$	--		$	--	$	--		$	--	$	90,154,854		$	(94,980,162	)	$	(4,825,308	)
Issuance of restricted share units		66,667			--		--			--		--			--		214,001			--			214,001
Balance at January 1, 2026		21,463,306		$	--		--		$	--		--		$	--	$	90,540,605		$	(109,771,192	)	$	(19,230,587	)
Expense related to restricted share units		--			--		--			--		--			--	$	40,~~677~~125			--		$	40,~~677~~125
Net loss		--			--		--			--		--			--		--			(43,~~600~~512,~~126~~418	)		(43,~~600~~512,~~126~~418	)
Balance at June 30, 2025		21,448,519		$	--		--		$	--		--		$	--	$	90,409,532		$	(99,580,288	)	$	(9,170,756	)
Balance at March 31, 2026		21,463,306			--		--			--		--			--		90,580,730			(113,283,610	)		(22,702,880	)
Issuance of restricted share units		14,787			--		--			--		--			--		2,999			--			2,999
Net loss		--		$	--		--		$	--		--		$	--		--		$	(3,780,821	)	$	(3,780,821	)
Balance at September 30, 2025		21,463,306		$	--		--		$	--		--		$	--	$	90,412,531		$	(103,361,109	)	$	(12,948,578	)

~~Common~~ 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 unaudited condensed consolidated financial statements.

Borealis Foods, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)

	For the Nine Months Ended September 30, 2025			For the Nine Months Ended September 30, 2024
	For the Three Months Ended March 31, 2026			For the Three Months Ended March 31, 2025
Cash Flows from Operating Activities:
Net loss	$	(123,~~568~~512,~~535~~418	)	$	(194,~~561~~187,~~531~~588	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash compensation expense related to stock options		315,842			1,273,053
Non-cash compensation expense related to restricted share units		40,125			58,166
Depreciation and amortization		1386,~~407,642~~044			1480,~~861,351~~554
Amortization of loan costs		~~231,947~~-			~~232~~76,~~798~~466
Provision for credit losses		~~289~~32,~~197~~997			96(47,~~217~~653	)
Provision for inventory reserve		(~~692~~30,~~083~~120	)		(33126,~~534~~323	)
Changes in operating assets and liabilities:
Accounts receivable		~~(898~~872,~~233~~663	)		(1234,~~228,251~~308	)
Inventories		21,~~740~~080,~~444~~160			(1421,~~771,837~~189	)
Prepaid expenses and other		~~365~~(308,~~539~~985	)		~~(202~~201,~~151~~262	)
Operating lease		~~(2,211~~321	)		(~~22,185~~624	)
Accounts payable and accrued expenses		31,~~227~~316,~~978~~341			41,~~857~~517,~~067~~638
Accrued interest		1,822,362			228,885
Net cash used in operating activities	$	(122,872	)	$	(1,372,605	)
Net cash used in operating activities		(3,760,111	)		(14,270,118	)
Cash flows from investing activities
Proceeds from reverse capitalization		-			63,575
Purchases of intangible assets		-			(9,515	)
Purchases of intangible assets		(64,403	)		(253,017	)
Purchases of property, plant and equipment		-			(16,229	)
Purchases of property, plant and equipment		3,078			(1,519,208	)
Net cash used in investing activities	$	-		$	(25,744	)
Net cash used in investing activities		(61,325	)		(1,708,650	)
Cash flows from financing activities
Proceeds from financing activities
Proceeds from related parties		1,421,825			1,085,000
Proceeds from related parties		3,707,127			-
Payments on finance leases payable		(151,242	)		(147,080	)
Proceeds from convertible notes payable		-			3,000,000
Payments on line of credit		(4,996,956	)		-
Payments on finance leases payable		(409,787	)		(415,320	)
Borrowings on line of credit		4,515,243			-
Borrowings on line of credit		-			6,500,000
Payments on notes payable		(250,000	)		-
Net cash provided by financing activities	$	3538,~~297,340~~870		$	9937,~~084,680~~920
Net change in cash		(524,096	)		(6,894,088	)
		-
Cash, beginning of period		652,965			7,615,630
Net change in cash		415,998			(460,429	)
Cash, end of period	$	128,869		$	721,542
Cash, beginning of period		63,859			652,965
Cash, end of period	$	479,857		$	192,536
Supplemental cash flow data
Cash paid during the period for:
Interest	$	1808,~~086,356~~850		$	2243,~~314,683~~500
Income taxes	$	-		$	14,116
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

See accompanying notes to the unaudited condensed consolidated financial statements.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

1. ~~Description~~Basis of ~~Business~~Presentation and ~~Summary of~~ Significant Accounting Policies

Overview

The accompanying unaudited condensed consolidated ~~financial~~ ~~statements include the~~ financial statements of Borealis Foods Inc. ~~(“Borealis”),~~ and its wholly-owned subsidiaries: ~~Palmetto Gourmet~~(collectively, ~~Foods~~the ~~(Canada)~~“Company,” ~~Inc.~~“Borealis,” (“~~PGF~~we,” ~~Canada~~“us,” or “our”), ~~Palmetto~~have ~~Gourmet~~been ~~Foods,~~prepared ~~Inc.~~in accordance with accounting principles generally accepted in the United States of America (“~~PGF~~GAAP”), ~~PGF~~for ~~Real~~interim ~~Estate I,~~financial ~~Inc.~~information ~~(“PGF~~and REin ~~I”),~~accordance ~~PGF~~with ~~Real~~the ~~Estate~~instructions IIto Form 10-Q and Article 8 of Regulation S-X. Accordingly, ~~Inc~~they do not include all the information and footnotes required by GAAP for complete financial statements. ~~(“PGF~~In REthe ~~II”)~~opinion of management, ~~and~~all ~~Borealis~~adjustments, IPconsisting ~~(“Borealis IP”)~~only ~~(collectively~~of normal recurring adjustments, ~~the~~considered ~~“Company”)~~necessary for a fair presentation have been included.

~~Borealis~~The iscondensed aconsolidated ~~food~~balance ~~technology~~sheet ~~integrator~~as ~~with a~~of ~~mission~~December to31, ~~address~~2025 ~~global~~has ~~food~~been ~~security~~derived ~~challenges~~from ~~through~~ the ~~development~~audited ~~and~~financial ~~commercialization~~statements at that date but does not include all of ~~tasty,~~the ~~affordable~~information and ~~sustainable functional~~footnotes ~~foods.~~required ~~Borealis~~by ~~has~~GAAP ~~developed~~for acomplete ~~range~~financial ofstatements. ~~high-quality,~~These ~~affordable,~~unaudited ~~sustainable,~~condensed ~~and~~consolidated ~~nutritious~~financial ~~premium,~~statements ~~ready-to-eat~~should ~~meals sold~~be read in conjunction with the ~~United~~Company’s ~~States~~Annual Report on Form 10-K for the year ended December 31, ~~Canada~~2025, ~~Central~~filed ~~America,~~with ~~South~~the ~~America~~Securities and ~~Europe~~Exchange Commission.

~~PGF~~The ~~Canada~~results isof aoperations ~~holding~~for ~~company~~the three months ended March 31, ~~holding~~2026 ~~the~~are ~~shares~~ not necessarily indicative of ~~PGF~~the results to be expected for the full year ending December 31, 2026.

The financial data presented herein for three months ended March 31, 2026 and 2025 reflects the consolidated operations of Palmetto Gourmet Foods, Inc. (“PGF”) isand aits ~~food~~real ~~manufacturing~~estate ~~company~~subsidiaries ~~with~~(“PGF aRE ~~BRC AA+~~I” ~~rated~~and ~~food~~“PGF ~~grade~~RE ~~facility~~II”), which constitute substantially all of the Company’s operating activities.

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.”

Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. ~~For~~The ~~the three and nine months ended September 30, 2025, the~~ Company has incurred recurring operating losses ~~from~~since ~~operations~~inception and ~~negative~~has ~~cash~~a ~~flows~~working ~~from~~capital ~~operating activities;~~deficit and ~~had~~accumulated ~~cash~~deficit ofthat ~~approximately~~raise ~~$0.13 million as of September 30, 2025. In addition, current liabilities significantly exceeded current assets, and near-term debt maturities and related-party obligations are~~ substantial. ~~These conditions raise substantial~~ doubt about ~~the~~its ~~Company’s~~ ability to continue as a going concern within one year after ~~November~~the ~~19,~~date ~~2025~~these financial statements are issued.

~~Management~~ ~~has~~As ~~implemented~~of ~~several~~March ~~strategic~~31, ~~and~~2026, ~~operational~~the ~~initiatives aimed~~Company athad ~~improving~~cash ~~sales~~of approximately $0.5 million and ~~financial~~a ~~performance~~net working capital deficit of approximately $(65.0) ~~For~~million. The Company’s total liabilities exceed total assets and the ~~three~~Company ~~months~~has ~~ended~~experienced ~~September~~recurring 30losses from operations and negative cash flows from operating activities. On November 13, 2025, the Company ~~significantly~~received ~~reduced~~a ~~sales~~notice from FrontWell Capital Partners Inc. (“FrontWell”) asserting the occurrence of a Default under the FrontWell Credit Agreement. On March 27, ~~general~~ 2026, the Company and ~~administrative~~its ~~expenses~~subsidiaries byentered ~~40%~~into ~~year-over-year,~~a ~~driven~~Forbearance byand Amendment Agreement with FrontWell (the ~~conclusion~~“Forbearance ofAgreement”), ~~one-time~~pursuant ~~transaction-related~~to ~~costs~~which FrontWell agreed to forbear from exercising its rights and remedies with respect to specified defaults through April 27, 2026, subject to compliance with certain conditions including the retention of a ~~disciplined reduction~~Chief Restructuring Officer. On April 27, 2026, the Company repaid and satisfied in ~~discretionary~~full ~~spending~~all obligations outstanding under the FrontWell Credit Agreement using proceeds from a new $17.0 ~~Gross~~million ~~margin,~~term ~~excluding~~loan ~~depreciation~~entered into with Oxus Capital PTE Ltd. (“Oxus Capital”), a ~~non~~major ~~GAAP~~related-party ~~measurement~~shareholder, ~~was~~as ~~18%~~described asfurther ofin ~~September~~Note ~~30,~~4 ~~2025~~and ~~consistent with~~Note ~~18%~~11. asThe ofFrontWell ~~September~~Credit ~~30,~~Agreement ~~2024~~has been fully discharged and the August 2026 balloon maturity risk has been eliminated.

Subsequent to March 31, 2026, the Company completed the Oxus Credit Agreement on April 27, 2026, which extended the maturity of the Company's primary secured debt facility from August 2026 to April 2031, issued a separate $3.0 million unsecured convertible promissory note to Oxus Capital on May 29, 2026. Management’s remaining plans to address the conditions giving rise to substantial doubt include: (i) consummation of equity financings of at least $70.0 million at $9.00 per share on or before July 1, 2026; (ii) absent such financings, the conversion of approximately $29.1 million of related-party indebtedness (plus approximately $4.3 million of accrued interest as of June 30, 2026) into Common Shares under the Conversion Agreement, subject to receipt of shareholder approvals required under Nasdaq Listing Rules 5635(b) and 5635(d); (iii) continued financial support from related parties with respect to demand and past-due obligations; (iv) continued growth in institutional food service volumes; and (v) ongoing SG&A discipline.

Notwithstanding the foregoing, management has concluded under ASC 205-40 that substantial doubt about the Company's ability to continue as a going concern has not been alleviated, because management's plans cannot be assessed as probable of being effectively implemented. As of the date of issuance of these financial statements, the Company has no commitments for the equity financing contemplated by the Subscription Agreement, the $9.00 per share threshold is substantially above recent trading prices of the Common Shares, the shareholder approvals required for the contemplated conversion have not been obtained, the Company’s total liabilities continue to exceed total assets, and the Company continues to rely on related-party support to meet near-term obligations.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Description of Business and Summary of Significant Accounting Policies (continued)

Going Concern (continued)

The Company has not raised external capital in the three quarters of 2025 but is actively evaluating financing alternatives, including debt and equity issuances, to support ongoing operations and strengthen the balance sheet. Management is also aligning inventory and production levels with committed demand from stable institutional customers, which is expected to enhance working capital efficiency and cash flow conversion through the remainder of the year.

While these measures represent meaningful progress toward operational stability, the Company’s ability to continue as a going concern remains subject to successful execution of its strategic plan and securing additional financing, if needed. Accordingly, substantial doubt remains about the Company’s ability to continue as a going concern within one year from the date these unaudited condensed consolidated financial statements are issued. We have included additional disclosures in MD&A under “Liquidity and Capital Resources,” and in Note 11, “Subsequent Events,” regarding related-party advances and compensation deferral subsequent to quarter-end

Basis of Presentation

The accompanying unaudited condensed 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.

We have condensed certain categories of information in our unaudited condensed consolidated financial statements to enhance the readability and understanding of those statements by making them more succinct. As a result, certain footnote disclosures we normally include in our annual consolidated financial statements have been omitted but remain prepared in accordance with US GAAP and the rules and regulations of the SEC (“Securities and Exchange Commission”). For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present our unaudited condensed consolidated balance sheets and unaudited condensed consolidated statements of operations, changes in shareholders’ equity (deficit), and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. Certain prior period amounts have been reclassified to conform to current-period presentation.

Estimates

The preparation of the unaudited condensed 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 unaudited condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting periods. 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~~The ~~were~~Company has no cash equivalents as of ~~September 30~~March 31, ~~2025~~2026 and December 31, ~~2024~~2025.

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 by using the weighted average cost method.

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

Prepaid Expenses

Prepaid expenses were approximately $~~769~~1,070,000 and $1761,~~135,~~000, composed primarily of prepaid insurance, deposits on inventory purchases and property, plant and equipment purchases, as of ~~September~~March 3031, ~~2025~~2026, and December 31, ~~2024~~2025, respectively.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Description of Business and Summary of Significant Accounting Policies (continued)

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 $638,000 and $548,000 for the three months ended September 30, 2025 and 2024, respectively. The change in the method of calculating depreciation resulted in an increase in net income of $1,858,000 and $1,158,000 for the nine months ended September 30, 2025 and 2024, respectively. The total cost basis of machinery subject to depreciation over machine hours was approximately $38,717,000 and $38,601,000 as of September 30, 2025 and December 31, 2024, respectively.

Straight-line assets:

Buildings and improvements			10-30 years
Furniture, fixtures and equipment			3-15 years

Machine hours assets:

Furniture, fixtures and equipment

89,232 machine hours

Construction in progress includes the cost of property, plant and equipment being constructed or otherwise not yet in service. Costs include materials, labor, capitalized interest, engineering and testing costs, and other costs necessary to get the assets ready for their intended use.

Intangible Assets

Patents are recorded at cost and are amortized on a straight-line basis over their estimated useful lives. The carrying value of patents is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

~~Loan Costs~~6

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 unaudited condensed consolidated statements of operations. Loan costs are shown as reduction of related debt balances for financial statement presentation.

Goodwill

The Company’s goodwill resulted from a prior year acquisition. Goodwill is not amortized but is reviewed annually for impairment or more frequently as events or circumstances indicate its carrying amount may not be recoverable. No impairment losses were recorded for the three months and nine months ended September 30, 2025 and 2024.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Description of Business and Summary of Significant Accounting Policies (continued)

Amounts Due to Related Parties

Amounts due to related parties (Company shareholders and entities controlled by Company shareholders) totaled $1928,~~134~~717,~~580~~709 as of ~~September~~March ~~30, 2025 and $15,427,453 as of December~~ 31, ~~2024. This~~2026 ~~related party liability is comprised of multiple notes payable to a shareholder in the amount of $10,505,792~~ and $727,~~325~~295,~~790~~885 as of ~~September~~ ~~30, 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 September 30,~~ 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 $527,127 as of September 30, 2025, bears interest at 10% annually and are due on demand. The remaining $7,601,661 shareholder note payable was a result of expenses recognized by Oxus and resulted in reduction of contributed equity at the Reverse Recapitalization. This note matures in February 2026 after extension and is non-interest bearing.

~~Related~~ ~~parties~~This ~~debt~~related ~~balances~~party ~~outstanding~~liability asis comprised of ~~September~~ 30multiple notes payable to Barthelemy Helg, ~~2025~~Non-Executive ~~are~~Chairman ~~due~~of asthe ~~follows:~~Board ~~$11~~of Directors,~~533,000~~ in ~~2025~~the amount of $14,425,792 and $713,~~602~~285,~~000~~792 inas of March 31, 2026 and December 31, 2025, respectively, and is due on demand and bears interest at 10% annually.

~~The~~ ~~salary~~An ofadditional ~~the~~note ~~Company’s~~payable ~~CEO~~to ~~was~~a ~~accrued and~~shareholder ~~not~~in ~~paid~~the ~~during~~amount ~~the~~of ~~nine~~$500,000 ~~months~~as ~~ended~~of ~~September~~March 3031, ~~2025. The~~2026 ~~Company~~and ~~recorded~~December ~~$333~~31,~~330~~ in2025, ~~accrued~~bears ~~payroll~~interest ~~expense~~at to10% ~~reflect compensation~~annually ~~for~~and ~~services~~is ~~performed~~due June 30, 2026.

Additional notes payable to Reza Soltanzadeh, the Company’s CEO, in the amount of $2,690,256 and $2,408,432 as of March 31, 2026 and December 31, 2025, respectively, and bears interest at 10% annually and are due on demand.

The remaining $11,101,661 is comprised of two shareholder notes payable to Oxus Capital PTE Ltd. (“Oxus”). 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 March 31, 2026 are due as follows: $28,717,709 in 2026.

The salary of the Company’s CEO was accrued and not paid during the three months ended March 31, 2026. The Company recorded $125,000 in accrued payroll expense to reflect compensation for services performed during the three months ended March 31, 2026. The total accrued payroll expense of the Company’s CEO is $583,328 and $458,328 as of March 31, 2026 and December 31, 2025 respectively.

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. No impairment losses were recorded for three months ~~and nine months~~ ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025.

Revenue and Cost Recognition and Accounts Receivable

The Company’s revenue is primarily generated from the sale of food products. ~~These~~The ~~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 as a reduction in revenue in the same period in which the related revenues are recognized. ~~Gross revenues for the three and nine-month periods ended September~~ ~~30, 2025 and 2024 were approximately $7,364,000 and $8,076,000 for the three months ended and $22,165,000 and $22,036,000 for the nine months ended September 30, 2025 and 2024, respectively.~~

Total payment discounts and promotions were approximately $~~260~~414,000 and $~~388~~379,000 for the three months ended ~~and~~March $131,~~027,000~~ 2026 and $12025,~~128,000~~ ~~for the nine months ended,~~ respectively, resulting in net revenues of approximately $7,~~104~~368,000 and $76,~~688~~846,000 ~~for the three-month periods ended and $21~~,~~138,000 and~~ ~~$20,909,000 for the nine-month periods ended September 30, 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.

~~Borealis~~ ~~Foods~~The ~~Inc~~Company incurred production training expenses for the three months ended March 31, 2026 and 2025, totaling approximately $133,000 and $201,000, respectively. Such amounts are recorded in sales, general and ~~Subsidiaries~~administrative costs in the accompanying unaudited condensed consolidated statement of operations as these costs are not directly attributable to finished goods production.

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Description of Business and Summary of Significant Accounting Policies (continued)

Revenue and Cost Recognition and Accounts Receivable (continued)

The Company incurred production training expenses for the three and nine-month periods ended September 30, 2025 and 2024, totaling approximately $251,000 and $478,000 for the three months ended and $645,000 and $1,364,000 for the nine months ended, respectively, due to PGF adding production capabilities during both periods. Such amounts are recorded in sales, general and administrative costs in the accompanying unaudited condensed consolidated statement of operations as these costs are not directly attributable to finished goods production.

The Company’s cost of goods sold represent materials, direct labor costs, and allocated overheads associated with the sale of finished goods to customers.

Advertising

Costs associated with advertising are expensed as incurred and are included in sales, general and administrative expenses. Advertising costs expensed for the three ~~and~~months ~~nine month periods~~ ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025 were approximately $~~618~~463,000 and $1566,~~123,~~000 ~~for the three months ended and $1~~,~~771,000~~ ~~and $5,074,000 for the nine months ended,~~ 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 three ~~and nine~~ months ended ~~September 30~~March 31, ~~2025~~2026 and ~~2024~~2025 were approximately $5250,000 and $5652,000 ~~for the three months ended and $156~~,~~000~~ ~~and $142,000 for the nine months ended,~~ respectively, and are included in sales, general, and administrative expenses in the accompanying condensed 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 three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026 and ~~2024~~2025 were approximately ~~$488,000~~ ~~and~~ $1446,~~307,~~000 ~~for the three months ended~~ and $1607,~~613,~~000 ~~and $2~~,~~476,000~~ ~~for the nine months ended,~~ respectively, and are included in sales, general, and administrative expenses in the accompanying condensed consolidated statements of operations.

In April 2023, the Company entered into a multi-year agreement for a marketing representative to assist in the recipes for three co-branded private label ramen noodles as well to be utilized in marketing of the Company for the marketing representative’s name, image, likeness and voice. This agreement includes a service fee, an investment stake in the Company, and a royalty agreement on future co-branded sales. The service fee under this agreement is expensed on a straight-line basis under the terms of the contract. The marketing representative has a world-wide reputation within the gourmet food industry. We believe this agreement will assist us to increase our presence in the ramen noodle market.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Description of Business and Summary of Significant Accounting Policies (continued)

Transaction Costs

On February 23, 2023, Legacy Borealis entered into a definitive business combination agreement with Oxus, which was consummated on February 7, 2024 and is described further in Note 1. In connection with this agreement, the Company has incurred transaction costs of approximately $0 and $0 for the three months ended and $0 and $1,506,000 for the nine months ended September 30, 2025 and 2024, respectively. Transaction costs have been expensed as incurred and are included in sales, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Concentration of Risk

At times the Company maintains cash balances at financial institutions in excess of federally insured limits. 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 2% 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 three customers accounted for approximately 38% and sales to four customers accounted for approximately 53% of net revenues for three month periods ended September 30, 2025 and 2024, respectively. Sales to three customers accounted for approximately 44% and 45% of net revenues for the nine month periods ended September 30, 2025 and 2024, respectively. Accounts receivable from one customer amounted to approximately 17% and three customers amounted to 37% of total accounts receivable as of September 30, 2025 and December 31, 2024, respectively. Substantially all of the Company’s sales for the three and nine month periods ended September 30, 2025 and 2024 occurred in the United States, Canada, Central America, South America, and Europe.8

~~Purchases~~ ~~from~~Sales 10to ~~vendors~~three customers accounted for approximately 62 58% and 51 sales to four customers accounted for approximately 60% of ~~purchases~~net ~~during~~revenues for the three months period ended March 31, 2026 and 57 2025, respectively. Accounts receivable from two customers amounted to approximately 31% and 54 accounts receivable from three customers amount to approximately 51% of ~~purchases~~total ~~for~~accounts ~~the~~receivable ~~nine~~as ~~month~~of ~~periods~~March ~~ended September 30~~31, ~~2025~~ 2026 and ~~2024~~December 31, 2025, respectively. ~~Accounts~~The ~~payable~~Company’s tosales ~~these~~for ~~vendors~~the ~~totaled~~three ~~approximately~~months $2ended March 31,~~048,000~~ 2026 and $22025 were generated primarily in the United States across the Southeast,~~570~~ Midwest,~~000 as~~ ofSouthwest, ~~September 30~~Northeast, ~~2025~~ Mountain, and ~~2024~~Pacific regions, ~~respectively~~with the balance generated in international markets, including Canada, Central America, South America, and Europe. See Note 10 for revenue disaggregated by geographic region.

Purchases from 10 vendors accounted for approximately 46% and 46% of purchases during the three months ended March 31, 2026 and 2025, respectively. Accounts payable to these vendors totaled approximately $1,501,000 and $2,678,000 as of March 31, 2026 and 2025, 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 condensed 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 unaudited condensed consolidated balance sheets for accounts receivable and accounts payable approximate their fair values due to the short-term nature of these instruments.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Description of Business and Summary of Significant Accounting Policies (continued)

Fair Value Measurements (continued)

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 ~~September~~March 3031, ~~2025~~2026 and December 31, ~~2024~~2025. 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 unaudited condensed consolidated financial statements and current estimates of fair value may differ significantly from the amounts presented herein.

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 unaudited condensed consolidated financial statements based on the estimated fair value of the instruments issued. The Company measures the cost of employees’ and/or directors’ 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 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 date of completion of the Reverse Capitalization that there were no changes to the classes or language that would impact the original assessment that the warrants should be classified as equity.

Shipping and Handling Costs

Shipping and handling costs are expensed as incurred and are included in sales, general and administrative expense in the unaudited condensed consolidated statements of operations.

Recent Accounting Pronouncements

In ~~December~~November ~~2023~~2024, the ~~Financial~~FASB ~~Accounting~~issued ~~Standards Board~~ASU ~~(“FASB”)~~2024-03, ~~issued~~Income ~~Accounting~~Statement ~~Standards~~- ~~Update~~Reporting Comprehensive Income - Expense Disaggregation Disclosures (“ASU 2024-03”) ~~2023-09,~~which ~~Income~~requires ~~Taxes~~entities to (~~Topic~~i) ~~740~~disclose amounts of (a)~~: Improvements~~ topurchase ~~Income~~of ~~Tax~~inventory, ~~Disclosures~~(b) employee compensation, to(c) ~~enhance~~depreciation, ~~transparency~~(d) ~~into~~intangible ~~income~~asset ~~tax~~amortization, ~~disclosures.~~and, ~~The~~(e) ~~amendments~~depreciation, ~~require~~depletion, ~~annual~~and ~~disclosure of~~amortization ~~certain~~recognized ~~information~~as ~~relating~~part toof ~~the~~oil-and ~~rate~~gas-producing ~~reconciliation~~activities, ~~income~~(ii) ~~taxes~~include ~~paid~~certain byamounts ~~jurisdiction,~~that ~~income~~are ~~(or~~already ~~loss)~~required ~~from~~to ~~continuing~~be ~~operations before~~disclosed ~~income~~under ~~tax~~current ~~expense~~U.S. ~~(or~~GAAP ~~benefit)~~in ~~disaggregated~~the ~~between~~same ~~domestic~~disclosures ~~and~~as ~~foreign~~other disaggregation requirements, ~~income~~(iii) ~~tax~~disclose ~~expense~~a ~~(or~~qualitative ~~benefit)~~description ~~from~~of ~~continuing~~the ~~operations disaggregated~~amounts byremaining ~~federal~~in ~~(national),~~relevant ~~state,~~expense ~~and~~captions ~~foreign.~~that ~~The~~are ~~amendments~~not ~~also~~necessarily ~~eliminate~~disaggregated ~~certain~~quantitatively, ~~requirements~~and ~~relating~~(iv) todisclose ~~unrecognized~~the ~~tax benefits~~total ~~and~~amount ~~certain~~of ~~deferred~~selling ~~tax~~expenses, ~~disclosure~~in ~~relating~~annual toreporting ~~subsidiaries~~periods, ~~and~~an ~~corporate~~entity’s ~~joint~~definition ~~ventures.~~of ~~The~~selling expense. ASU 2024-03 is effective for ~~years~~annual reporting periods beginning after December 15, ~~2024,~~2026 and interim reporting periods ~~within years~~ beginning after December 15, ~~2025~~2027. Early adoption is permitted. The Company is currently evaluating ASU 2024-03 to determine the impact ofit ~~this~~may ~~standard~~have on its ~~condensed~~ consolidated financial statements ~~and related disclosures~~.

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.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Description of Business and Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements (continued)

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures 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 condensed consolidated financial statements.

In July 2025, the FASB issued ASU 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 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 collections are evaluated. ASU 2025-05 if 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 condensed consolidated financial statements.

2. Inventories, net

Inventories were as follows:

	September 30,			December 31,
	March 31,			December 31,
	2025			2024
	2026			2025
Raw materials	$	43,~~474~~269,~~114~~913		$	63,~~712~~930,~~529~~750
Finished goods		1408,~~723,784~~058			2827,~~225,813~~381
Reserve for obsolete inventory		(~~200~~145,~~000~~435	)		(~~892~~175,~~083~~555	)
	$	53,~~997~~532,~~898~~536		$	84,~~046~~582,~~259~~576

3. PPE, Net

Property, plant and equipment were as follows:

	September 30,			December 31,
	March 31,			December 31,
	2025			2024
	2026			2025
Building and improvements	$	10,110,188		$	10,110,188
Furniture, fixtures and equipment		48,~~628~~632,~~675~~985			48,~~517~~632,~~228~~985
Construction in progress		~~764~~760,~~696~~387			~~879~~760,~~220~~387
		59,503,559			59,506,636
		59,503,560			59,503,560
Less: accumulated depreciation		(15,~~177~~997,~~952~~641	)		(1315,~~770~~611,~~310~~596	)
	$	4443,~~325~~505,~~607~~919		$	4543,~~736~~891,~~326~~964

Depreciation expense recorded in the three ~~and nine~~months ~~month periods~~ ended ~~September 30~~March 31, ~~2025~~2026 and ~~2024~~2025 was approximately $~~453~~386,000 and $~~462~~481,000 ~~for the three months ended and $1~~,~~408,000 and~~ ~~$1,861,000 for the nine months ended,~~ respectively, which is included as a component of cost of goods sold.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

4. Debt

In ~~2022~~2021, the Company issued a $203,000,000 of convertible ~~notes~~ ~~payable~~note that, ~~after~~matures anin ~~extension~~December ~~was~~2026 ~~negotiated, had a stated maturity of February 2024~~ (unless converted) and ~~bore~~bears interest at 10 3% annually. OnAccrued orinterest ~~before~~is payable monthly. The outstanding principal and interest under the ~~earlier~~convertible note may be converted, at the option of the ~~maturity~~holder, ~~date~~into the same equity as issued upon the Company’s issuance of preferred or common shares of at least $10,000,000 (a “qualified financing event”), either as ~~defined~~a insingle ~~the~~round ~~note~~or ~~agreements, the~~a ~~outstanding~~lead ~~principal and interest were convertible~~round, at ~~the~~85% ~~option~~ of the ~~holder,~~per ~~into~~share ~~common~~price ~~shares~~paid ofduring the ~~Company~~qualified financing event. The ~~notes~~note ~~and accrued~~holder ~~interest~~elected ~~were~~not ~~converted~~to ~~into~~convert ~~2,189,997~~at ~~common~~the ~~shares~~Reverse ~~with~~Recapitalization ~~the~~and ~~consummation~~therefore of the ~~Reverse~~note ~~Recapitalization~~is ~~with~~due ~~Oxus.~~at maturity

In ~~2022~~During 2023, the Company’s ~~issued~~subsidiaries ~~$4,800,000~~entered ininto ~~convertible notes~~a ~~payable. During 2023,~~ $425,~~500~~000,000 offinancing ~~the~~agreement ~~notes~~with ~~matured~~FrontWell ~~without~~Capital ~~conversion~~Partners ~~and~~Inc. ~~were~~(“FrontWell”), ~~repaid~~comprised byof ~~the~~a ~~Company. The remaining~~ $~~300~~15,000 of,000 ~~convertible~~term ~~notes~~facility ~~payable~~and ~~bore~~a ~~interest at~~ $10~~% annually and~~,000,000 ~~after~~revolving anline ~~extension~~of ~~was negotiated~~credit, ~~had~~with a ~~state~~ maturity ofdate ~~February~~in ~~2024 (unless~~August ~~converted)~~2026. ~~The~~In ~~outstanding~~March ~~principal~~2024 and ~~interest~~February ~~under~~2025, the ~~remaining~~Company ~~convertible~~entered ~~notes~~into ~~were~~amendments ~~convertible,~~extending at the ~~option~~first ofprincipal ~~the holder,~~payment ~~into~~date; ~~the~~under ~~same equity as issued upon~~ the ~~Company’s~~February ~~issuance~~2025 ofamendment, ~~preferred~~monthly orpayments ~~common shares~~ of ~~at least~~ $1083,000~~,000.~~ ~~The~~commenced ~~notes and~~in ~~accrued~~September ~~interest~~2025 ~~thereon~~with ~~were~~a ~~converted~~lump-sum ~~into~~balloon ~~40,544~~payment ~~common shares with the consummation~~ of ~~the~~$14,083,000 ~~Reverse~~due ~~Recapitalization~~at ~~with Oxus~~maturity.

In ~~2023~~addition to the term facility, the Company ~~issued~~obtained a $2710,000,000 ~~of convertible~~line ~~notes payable,~~ of ~~which~~credit ~~$27,000,000~~to ~~had~~fund aworking ~~maturity~~capital ~~date~~needs in ~~2024~~support ~~(unless~~of ~~converted)~~its ~~and~~growth ~~bore~~strategy. ~~interest~~Interest accrues at ~~10%~~the ~~annually.~~prime ~~On or~~rate ~~before~~plus the ~~earlier~~applicable margin of ~~the~~4.50%. ~~maturity~~Interest ~~date~~is ordue aand ~~“qualified~~payable ~~financing~~monthly ~~event”,~~beginning ~~as defined~~ in ~~the~~September ~~note~~2023. ~~agreements,~~The ~~the outstanding~~line ~~principal~~of ~~and~~credit ~~interest~~includes ~~were~~an ~~convertible,~~unused atline ~~the~~fee ~~option~~ of ~~the~~0.25% ~~holder,~~per ~~into~~annum ~~common~~beginning ~~shares~~on ofclosing ~~the~~date ~~Company.~~through ~~The~~nine ~~notes~~months and ~~accrued~~ ~~interest~~increases ~~were~~to ~~converted~~0.50% ~~into~~per 3annum thereafter. As of March 31,~~787,585~~ ~~common~~2026 ~~shares~~and inDecember ~~connection~~31, ~~with~~2025 the ~~consummation~~line of ~~the~~credit ~~Reverse~~had ~~Recapitalization with~~$2,209,383 ~~Oxus~~and $2,691,096 drawn upon it, respectively.

InOn ~~2021~~November 13, 2025, the Company ~~issued~~received a $3notice from FrontWell asserting the occurrence of a Default under the FrontWell Credit Agreement. The default arose,~~000~~ in part,~~000~~ ~~convertible note~~from the issuance of certain promissory notes to related parties that ~~matures~~was insubsequently identified as potentially inconsistent with the debt incurrence restrictions of the FrontWell Credit Agreement. On March 27, 2026, ~~(unless~~the ~~converted)~~Company and ~~bears~~its ~~interest~~subsidiaries atPalmetto 3%Gourmet ~~annually~~Foods, Inc., ~~Accrued~~PGF ~~interest~~Real isEstate ~~payable~~I, ~~monthly~~Inc., ~~The~~and ~~outstanding~~PGF ~~principal and~~Real ~~interest~~Estate ~~under~~II, Inc. (collectively, the ~~convertible~~“Forbearance ~~note~~Parties”) ~~may~~entered beinto ~~converted,~~a atForbearance ~~the~~and ~~option~~Amendment ofAgreement with FrontWell (the ~~holder~~“Forbearance Agreement”), ~~into~~pursuant ~~the~~to ~~same~~which ~~equity~~FrontWell asagreed ~~issued~~to ~~upon~~forbear ~~the~~from ~~Company’s issuance~~exercising ofits ~~preferred~~rights orand ~~common~~remedies ~~shares~~with ofrespect atto ~~least~~specified ~~$10~~defaults under the FrontWell Credit Agreement through April 27,~~000~~ 2026,~~000~~ (asubject ~~“qualified~~to ~~financing~~compliance ~~event”)~~with certain conditions, ~~either~~including asthe retention of a ~~single~~Chief ~~round~~Restructuring ~~or a~~Officer. ~~lead~~On ~~round~~April 27, at2026, ~~85%~~the ofCompany repaid and satisfied in full all outstanding obligations under the ~~per~~FrontWell ~~share~~Credit ~~price~~Agreement ~~paid~~using ~~during~~proceeds from the ~~qualified~~Oxus ~~financing~~Credit ~~event~~Agreement described below. ~~The~~In ~~note~~connection ~~holder~~with ~~elected~~the ~~not~~full topayoff, ~~convert~~the atengagement of the ~~Reverse Recapitalization~~Chief ~~and~~Restructuring ~~therefore~~Officer ~~the~~was ~~note~~terminated. isThe ~~due~~FrontWell atCredit ~~maturity~~Agreement has been fully discharged and all liens thereunder released.

In January 2024, the Company issued a $3,000,000 convertible note payable that had a maturity date in 2024 (unless converted) and bore interest at 10% annually. The note was converted into 375,925 common shares with the consummation of the Reverse Recapitalization with Oxus.11

13 Oxus Capital Credit Agreement (Subsequent Event). On April 27, 2026 — subsequent to March 31, 2026 — the Company’s subsidiaries (PGF, PGF Real Estate I, Inc., and PGF Real Estate II, Inc.) entered into a Credit Agreement (the “Oxus Credit Agreement”) with Oxus Capital PTE Ltd. (“Oxus Capital”), a related-party major shareholder, as lender. Borealis Foods Inc. and certain affiliates are guarantors. The Oxus Credit Agreement provides for a term loan of $17,000,000, the proceeds of which were used to repay in full all FrontWell obligations (approximately $16.2 million), with the balance applied to transaction expenses and general corporate purposes. Key terms: (i) maturity April 27, 2031; (ii) interest at 12% per annum (14% upon default); (iii) interest-only through April 30, 2027, with Oxus Capital having the option to convert the first year’s accrued interest (approximately $2.0 million) into Common Shares of the Company at the average 60-day closing price preceding May 1, 2027; (iv) principal repayable in 48 consecutive monthly installments commencing May 1, 2027; and (v) secured by a first-priority lien on substantially all assets of the Borrowers, including mortgages on the manufacturing facility and distribution center in Saluda, South Carolina. The Oxus Credit Agreement contains customary covenants and events of default, including that the departure of Reza Soltanzadeh from a senior management role constitutes an event of default subject to a 180-day cure period. The Oxus Credit Agreement and the Conversion Agreement were approved by disinterested members of the Board on April 24, 2026 and constitute a related party transaction.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

4. Debt (continued)

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 were 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 financing agreement is secured by a collateral package that includes substantially all of the assets of PGF, PGF RE I, and PGF RE II.

Amortization expense of approximately $78,000 was recorded on the fees for the three months ended and $232,000 and $233,000 for the nine months ended September 30, 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 2023. The line of credit includes an unused line fee of 0.25% per annum beginning on closing date through nine months and increases to 0.50% per annum thereafter. As of September 30, 2025 and December 31, 2024 the line of credit had $10,149,641 and $8,327,279 drawn upon it, respectively. The line of credit amount due includes $2,549,641 and $727,279 of accrued interest as of September 30, 2025, and December 31, 2024, respectively.

In the period leading up to the Reverse Recapitalization, significant transaction costs were incurred by both parties. In total, three notes payable of $5,433,713 were issued for the transaction debt. 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 has been extended with a maturity date inof ~~December 2025~~June 30, 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 has been extended with a maturity date inof ~~December 2025~~June 30, 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 has been extended with a maturity date inof ~~February~~December ~~2026~~31, 2025, and bears interest at 8% per annum.

~~Debt~~ ~~balances~~The ~~outstanding~~foregoing asthree oftransaction-related ~~September~~notes 30payable, ~~2025~~ aggregating $5,433,713, are ~~due~~exclusive asof ~~follows:~~the $57,~~767~~601,~~000~~661 innon-interest-bearing ~~2025~~Oxus ~~and~~shareholder ~~$25~~note described under “Amounts Due to Related Parties,~~267~~” which is also a Reverse Recapitalization-related obligation. Including that note,~~000~~ intransaction-related ~~2026;~~notes payable aggregate $013,035,374, inconsistent ~~2027;~~with ~~and~~the $0disclosure in ~~2028~~the Company's Annual Report on Form 10-K.

Debt balances outstanding as of March 31, 2026 are due as follows: $25,060,000 in 2026

In connection with the Oxus Credit Agreement, Oxus Capital is entitled to appoint two members to the Company's Board of Directors, and the Company entered into a Subscription Agreement pursuant to which it is obligated to use commercially reasonable efforts to raise not less than $70.0 million in additional equity at a price of not less than $9.00 per share on or before July 1, 2026. If the equity financing is not consummated by such date, the Conversion Agreement provides for the automatic conversion of approximately $29.1 million of related-party indebtedness (plus approximately $4.3 million of accrued interest as of June 30, 2026) into Common Shares, subject to the receipt of any required shareholder approvals. The Oxus Credit Agreement remains outstanding at a principal amount of $17.0 million. Separately, on May 29, 2026, the Company issued a $3.0 million senior unsecured convertible promissory note to Oxus Capital, the terms of which are described in Note 11. Oxus Capital is the Company's former SPAC sponsor and, through its controlling shareholder Kenges Rakishev, the beneficial owner of approximately 39.09% of the Company's outstanding Common Shares. Accordingly, the Oxus Credit Agreement, the Conversion Agreement, the Subscription Agreement, and the May 29, 2026 promissory note each constitute a related party transaction.

As to Note 3, 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.

The escrowed shares had been originally issued to the pledgors in connection with the Company’s prior business combination and registered under the Company’s S-4 registration statement, and had been held by the pledgors for more than two years prior to the January 2026 transfer. 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.

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%. The total income tax provision (benefit) expense recorded for the three months ended ~~September 30~~March 31, ~~2025~~2026 and ~~2024~~2025 was $0 and $10,~~000,~~ respectively, on a consolidated pre-tax book loss of approximately $3,~~781~~512,000 and $4,~~831~~188,000 in the three month periods ended ~~September 30, 2025~~March ~~and 2024~~31, ~~respectively.~~2026 ~~The total income tax provision (benefit) expense recorded for the nine months ended September 30, 2025~~ and ~~2024 was approximately $14,000 and $15,000, respectively, on a consolidated pre-tax book loss of approximately $12,555,000 and $19,547,000 in the nine month periods ended September 30,~~ 2025 ~~and 2024~~, respectively.

The Company’s tax provision is based on a projected effective rate based on annualized amounts applied to actual income to date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of capital loss and net operating loss (“NOL”) carryforwards is dependent upon the generation of future capital gains and taxable income in periods prior to their expiration. The Company currently provides a valuation allowance against the full amount of the NOLs since the Company is uncertain as to the realization of the full amount of benefits in the future. The Company will continue to assess the need for, and the amount of, the valuation allowance at each reporting period.

14 Transactions for which tax deductibility or the timing of tax deductibility is uncertain are analyzed by management based on their technical characteristics. The Company recognizes accrued interest and penalties, if any, related to uncertain tax positions in income tax expense. Management has determined that the Company does not have any uncertain tax positions or associated unrecognized tax benefits that materially impact the unaudited condensed consolidated financial statements or related disclosures. As a result, at March 31, 2026, and 2025, the Company did not have a liability for unrecognized tax benefits, interest or penalties under United States or Canadian tax law. The Company paid no penalties during the three month period ending March 31, 2026. The Company files income tax returns in the Canadian and U.S. federal jurisdictions, and in South Carolina. The Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2021. There are no tax examinations currently in progress.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

5. Income Taxes (continued)

Transactions for which tax deductibility or the timing of tax deductibility is uncertain are analyzed by management based on their technical characteristics. The Company recognizes accrued interest and penalties, if any, related to uncertain tax positions in income tax expense. Management has determined that the Company does not have any uncertain tax positions or associated unrecognized tax benefits that materially impact the unaudited condensed consolidated financial statements or related disclosures. As a result, at September 30, 2025, and 2024, the Company did not have a liability for unrecognized tax benefits, interest or penalties under United States or Canadian tax law. The Company paid no penalties during the three month period ending September 30, 2025. The Company files income tax returns in the Canadian and U.S. federal jurisdictions, and in South Carolina. The Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2021. There are no tax examinations currently in progress.

6. Contingencies

From time to time, the Company is involved in legal proceedings in the normal course of business. Management does not believe that the final resolution of any such legal proceedings will have a material effect on the condensed consolidated financial position or results of operations of the Company.

7. Warrants

The following represents a summary of warrants outstanding and exercisable as of ~~September~~March ~~30, 2025 and December~~ 31, ~~2024~~2026:

Description	Issue Date	Classification Exercise	Price		Expiration Date	Outstanding Shares		Exercisable Shares
Private Placement Warrants	9/13/2021	Equity	$	11.50	2/7/2029		9,300,000		9,300,000
Public Warrants	9/13/2021	Equity	$	11.50	2/7/2029		17,250,000		17,250,000
							26,550,000		26,550,000
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 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, ~~due~~except to the ~~expiration~~private ofplacement ~~the~~warrants ~~transfer~~were ofnot ~~the~~transferable, ~~private~~assignable ~~placement~~or ~~warrants~~salable until 30 days after the completion of the Reverse Recapitalization.

15 On June 13, 2025, the Company issued 100,000 private placement warrants to purchase 100,000 Common Shares at an exercise price of $5.00 per share, expiring on July 18, 2027. The warrants were issued in connection with the extension of the maturity date of the EarlyBirdCapital promissory note.

~~Borealis~~ ~~Foods~~On ~~Inc~~November 19, 2025, the Company issued 250,000 private placement warrants to purchase 250,000 Common Shares at an exercise price of $2.50 ~~and~~per ~~Subsidiaries~~share, expiring on November 19, 2028. The warrants were issued in connection with the further extension of the maturity date of the EarlyBirdCapital promissory note through December 31, 2025.

~~Notes~~8. toEquity ~~the~~Based ~~Unaudited Condensed Consolidated Financial Statements~~Compensation

8.Restricted 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 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 nine months ended September 30, 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.

	Restricted Stock Units			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2024		16,954			5.83
Granted		—			—
Vested		(3,000	)		5.83
Forfeited		—			—
Outstanding at March 31, 2025		13,954		$	5.83

Outstanding at December 31, 2025		12,500			3.21
Granted		—			—
Vested		(12,500	)		3.21
Forfeited		—			—
Outstanding at March 31, 2026		—			—

~~The~~ ~~fair~~Stock ~~values~~compensation ofexpense ~~the~~related to restricted stock~~-based~~ ~~awards~~units ~~granted were~~(“RSUs”) ~~calculated~~was ~~with~~approximately $40,000 and $58,000 for the ~~following~~three ~~assumptions:~~months ended March 31, 2026 and 2025, respectively.

Risk-free interest rate	3.81	%
Expected term (years)	5-10
Expected volatility	80	%
Dividend yield	0	%

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.

~~For~~The ~~the~~Company’s ~~three~~Equity ~~and~~Incentive ~~nine~~Plan, ~~month~~adopted ~~periods~~on ~~ended~~February ~~September 30~~7, ~~2025 and~~ 2024, ~~the~~provides ~~Company~~for ~~recorded~~the ~~approximately~~grant ~~$0 and $1,273,000, respectively,~~ of stock~~-based~~ ~~compensation expense under this plan. On February 7~~options, ~~2024~~RSUs, asperformance ashare ~~result~~units ~~of the Reverse Recapitalization~~ (~~Note 1~~PSUs), ~~4,000,000~~deferred ~~stock~~share ~~options~~units ~~were~~(DSUs) ~~exercised~~ and ~~converted at~~stock anappreciation ~~exchange~~rights ~~ratio~~(SARs) ofto ~~0.0661~~directors, ~~into 264~~officers,~~400~~ ~~shares~~employees ofand ~~common stock~~consultants. ~~This~~The ~~stock~~purpose ~~option~~of the plan ~~was~~is ~~closed~~to ~~upon~~attract, ~~the~~retain ~~business combination~~ and a ~~new~~incentivize ~~equity~~eligible ~~incentive~~participants ~~plan~~and ~~was~~align ~~approved~~their ~~and~~interests ~~implemented~~with asthose of ~~February~~shareholders 7,through ~~2024~~equity-based compensation.

~~Stock~~The ~~option~~12,500 ~~activity~~shares ~~for~~that vested in the ~~nine~~three months ended March 31, 2026, have not been issued or registered and therefore, total shares outstanding remains unchanged since December 31, 2025.

~~months ended September 30, 2024 is summarized as follows:~~14

	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 September 30, 2024		—			—		—

For the three and nine months ended September 30, 2025, the Company issued 14,787 and 131,703 restricted stock units under the new equity incentive plan, that vest immediately up to eight months. During the three and nine months ended September 30, 2025, the Company recognized approximately $3,000 and $316,000 of stock compensation related to such restricted stock units and 85,287 of such units were exercised.

Borealis Foods Inc. and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

9. Earnings per share

Basic earnings or loss per share is based on the weighted average number of common shares outstanding for the period. For the purposes of calculating diluted earnings per share, the number of shares outstanding has been adjusted for the dilutive effects of warrants.

Basic (loss) per share calculation	For Three Months Ended						~~For Nine Months Ended~~
	September 30,			September 30,			September 30,			September 30,
	March 31,			March 31,
	2025			2024			2025			2024
	2026			2025
Net (loss) available to common shareholders	$	(3,~~780~~512,~~821~~418	)	$	(4,~~832~~187,~~169~~588	)	$	~~(12,568,535~~	)	$	~~(19,561,531~~	)
Weighted average common shares outstanding (basic)		21,~~463~~428,~~415~~650			21,~~378~~379,~~890~~347			~~21,416,970~~			~~19,951,016~~
Basis (loss) per share from net loss	$	(0.18	)	$	(0.23	)	$	(0.59	)	$	(0.98	)
Basic (loss) per share from net loss	$	(0.16	)	$	(0.20	)
Diluted (loss) per share calculation
Net (loss) available to common shareholders	$	(3,~~780~~512,~~821~~418	)	$	(4,~~832~~187,~~169~~588	)	$	~~(12,568,535~~	)	$	~~(19,561,531~~	)
Weighted average common shares outstanding (basic)		21,~~463~~428,~~415~~650			21,~~378~~379,~~890~~347			~~21,416,970~~			~~19,951,016~~
Warrants		—			—			—			—
Weighted average common shares outstanding (diluted)		21,~~463~~428,~~415~~650			21,~~378~~379,~~890~~347			~~21,416,970~~			~~19,951,016~~
Diluted (loss) per share from net loss *	$	(0.1816	)	$	(0.2320	)		~~(0.59~~	)	$	~~(0.98~~	)

*	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.

10. Segment Reporting

The Company has a single reportable segment focused around ~~the~~ sale of similar products. This reportable segment derives revenues from the manufacture and sale of high quality, affordable and nutritious ready to eat meals.

The Company’s ~~chief~~identifies its operating ~~decision-maker (the~~segments ~~“CODM”),~~in ~~who~~accordance iswith ~~the~~ASC ~~chief executive officer~~280, ~~assesses~~Segment ~~performance~~Reporting. ~~for~~An ~~the~~operating ~~reportable~~ segment ~~and~~is ~~decides~~a ~~how~~component ~~to allocate~~of ~~resources~~an ~~using~~entity ~~net income~~ (~~loss~~a) asthat ~~the~~engages ~~primary~~in ~~measure~~business ofactivities ~~profitability.~~from ~~The~~which ~~CODM~~it ismay ~~not~~earn ~~regularly~~revenues ~~provided~~and ~~with~~incur ~~specific segment~~ expenses, ~~but focuses on revenue, gross profit, and net income~~ (~~loss~~b). ~~Expense~~whose ~~information,~~operating ~~including~~results ~~cost~~are ofregularly ~~sales~~reviewed ~~can~~by ~~be easily computed from~~ the ~~provided~~chief ~~information.~~operating ~~These~~decision ~~segment~~maker (~~and consolidated~~CODM) ~~measures~~to ofmake ~~profitability~~decisions ~~are~~about ~~shown~~resources into ~~the~~be ~~unaudited~~allocated ~~condensed~~to ~~consolidated statements~~the ofsegment ~~operations.~~and ~~The~~assess ~~measure~~its ofperformance, ~~segment~~and ~~assets~~(c) isfor ~~reported~~which ondiscrete ~~the~~financial ~~consolidated~~information ~~balance~~is ~~sheets as total assets~~available.

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 three months ended March 31, 2026 and 2025, respectively. Regions correspond to the sales territories through which the Company distributes its products in the United States, Canada, and international markets.

	Three months ended March 31
	2026		2025
Southeast	$	1,447,000	$	2,638,000
Midwest		3,578,000		1,847,000
Southwest		482,000		1,078,000
Northeast		265,000		452,000
Mountain		1,425,000		422,000
Pacific		179,000		514,000
International		406,000		274,000
Total Gross Revenue	$	7,782,000	$	7,225,000

11. Subsequent Events

The Company evaluated subsequent events ~~and transactions after September 30, 2025~~ through ~~November 19, 2025,~~ the date ~~the~~these ~~unaudited condensed consolidated~~ financial statements were issued,. ~~for subsequent~~The following events ~~requiring~~occurring ~~disclosure~~after inMarch ~~these~~31, ~~unaudited~~2026 ~~condensed~~require ~~consolidated financial statements~~disclosure.

Oxus Credit Agreement. On ~~November~~April 1327, ~~2025~~2026, the Company’s ~~received~~subsidiaries a— ~~notice~~Palmetto ~~from~~Gourmet ~~its~~Foods, ~~senior~~Inc., ~~lender~~PGF Real Estate I, ~~Frontwell~~Inc., ~~Capital~~and ~~Parners~~PGF Real Estate II, Inc. (collectively, the “Borrowers”) — entered into a Credit Agreement (the “~~Frontwell~~Oxus Credit Agreement”) with Oxus Capital PTE Ltd. (“Oxus Capital”), ~~asserting~~ ~~the~~a ~~occurrence~~major related-party shareholder, as lender. Borealis Foods Inc., Borealis IP Inc., and Palmetto Gourmet Foods (Canada) Inc. are party as guarantors. The Oxus Credit Agreement provides for a term loan of ~~multiple~~up ~~Events~~to $17,000,000, the proceeds of ~~Default~~which were used to repay in full and discharge all outstanding obligations under the FrontWell Credit Agreement ~~and~~(approximately ~~indicating~~$16.2 ~~that~~million), ~~cash~~with ~~dominion~~the ~~had~~balance ~~been~~applied ~~imposed~~to transaction expenses and ~~future~~ ~~revolving~~general ~~advances~~corporate ~~would~~purposes. beThe ~~made~~term loan matures on April 27, 2031, bears interest at ~~Frontwell’s~~12% ~~discretion.~~per ~~Between~~annum ~~October~~(14% 21upon default), and ~~November~~is ~~19,~~repayable ~~2025,~~in ~~the~~48 ~~Borrowers~~consecutive ~~also made~~monthly ~~substantial~~installments ~~repayments~~commencing onMay 1, 2027. Oxus Capital has the ~~Revolving~~option, ~~Loans~~at its sole election, ~~reducing~~to convert all interest accrued during the ~~outstanding~~first ~~balance~~year ~~from~~of the loan (approximately $~~10.~~2.0 million) tointo $3common equity of the Company in lieu of cash.6 ~~million, bringing~~The term loan is secured by a first-priority lien on substantially all assets of the Borrowers, ~~back~~including ~~within~~mortgages ~~their~~on ~~Borrowing~~the ~~Base~~Company’s ~~requirements~~manufacturing facility and distribution center in Saluda, South Carolina. AsThe Oxus Credit Agreement was approved by the disinterested members of the ~~date~~Board of ~~this~~Directors ~~filing,~~on ~~the~~April ~~obligations~~24, ~~have~~2026. ~~not~~Oxus ~~been~~Capital ~~accelerated, and~~is the Company’s isformer ~~evaluating~~SPAC ~~the~~sponsor ~~notice~~and, ~~with~~through its ~~advisors~~controlling ~~and~~shareholder ~~continues~~Kenges toRakishev, ~~work~~a ~~collaboratively~~beneficial ~~with~~owner of approximately 39.09% of the ~~lender~~Company’s outstanding Common Shares.

On ~~November~~Conversion ~~19,~~Agreement. ~~2025~~In connection with the Oxus Credit Agreement, the Company ~~issued~~entered ~~promissory~~into ~~notes~~a toConversion ~~the~~Agreement ~~Chairman of~~with ~~the~~Oxus ~~Company’s~~Capital, ~~Board~~Reza ofSoltanzadeh ~~Directors~~ (~~the~~ “~~Chairman~~CEO”), and ~~Chief~~Barthelemy Helg (“Non-Executive ~~Officer~~Chairman”) of(collectively, the ~~Company (the~~ “~~CEO~~Shareholders”) in. Pursuant to the Conversion Agreement, approximately $29.1 million in aggregate principal ~~amounts~~amount of $2indebtedness previously advanced by the Shareholders to the Company,~~705,000~~ ~~and~~plus approximately $14.3 million in accrued interest (calculated through June 30,~~805~~ 2026),~~000,~~ ~~respectively.~~will Inautomatically ~~addition,~~convert into Common Shares if the Company ~~issued~~does anot ~~promissory~~consummate ~~note~~one toor ~~one of~~more ~~its~~equity ~~major~~financings ~~shareholders,~~resulting ~~Oxus~~in ~~Capital~~aggregate ~~PTE~~gross ~~Ltd.~~proceeds ~~(“Oxus”)~~of inat ~~the~~least ~~amount~~$70 million at a price of $39.00 per share on or before July 1,~~500,000~~ 2026. The ~~notes~~term ~~were~~loan ~~granted~~under inthe ~~connection with~~Oxus Credit Agreement is expressly excluded from the ~~Chairman,~~indebtedness subject to conversion. If the ~~CEO~~automatic ~~and~~conversion ~~Oxus~~occurs, ~~advancing~~existing anshareholders ~~aggregate~~would ~~amount~~experience ofsubstantial $8dilution. Board Reconstitution. Pursuant to the Oxus Credit Agreement,~~010,000~~ ~~between~~the ~~October~~Company 22was required, ~~2025~~no ~~and~~later ~~November~~than 17May 11, ~~2025.~~2026, ~~The~~to ~~terms of~~reconstitute ~~the~~its ~~notes~~Board ~~are~~of ~~described~~Directors inby ~~Exhibits~~appointing ~~10.1~~Pavel Mynzhanov and ~~10.2~~Zaure ~~which~~Algaziyeva ~~are~~(or ~~filed~~such ~~herewith~~other individuals acceptable to Oxus Capital). InPavel ~~addition~~Mynzhanov, ~~the~~who ~~Chief~~has ~~Executive~~served ~~Officer~~as ~~deferred~~a ~~approximately $69,000~~Director inof ~~compensation~~Oxus ~~through~~Capital ~~November~~since 19June 2022, ~~2025~~was appointed to the Board in May 2026.

Oxus Convertible Promissory Note. On May 29, 2026, the Company issued a $3.0 million convertible promissory note (the “Note”) to Oxus Capital. The Note is a senior unsecured obligation of the Company, bears interest at 10% per annum, and matures on August 29, 2026, subject to automatic extension if the shareholder approvals required for conversion under applicable Nasdaq Listing Rules have not been obtained by that date. Oxus Capital may elect at maturity to convert all or any portion of the outstanding principal into Common Shares at $1.45 per share, subject to customary adjustments, a 49.9% beneficial ownership blocker, and receipt of all required approvals. Based on the initial conversion price and without giving effect to accrued interest or the blocker, the Note would be convertible into approximately 2,068,966 Common Shares. The proceeds may not be used to repay borrowed-money indebtedness, including indebtedness owing to any shareholder or secured creditor. The Note constitutes a related party transaction. The foregoing description is qualified in its entirety by reference to the Note, which was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 4, 2026.

Nasdaq Listing Compliance. On January 12, 2026, the Company received a notice from the Nasdaq Listing Qualifications Department that it was not in compliance with Nasdaq Listing Rule 5620(a), which requires listed companies to hold an annual meeting of shareholders within twelve months of the end of each fiscal year. Nasdaq granted the Company an extension until June 29, 2026 to regain compliance. The Company held its annual meeting of shareholders on June 29, 2026. The Company expects to receive confirmation from Nasdaq that it has regained compliance with Listing Rule 5620(a); however, such confirmation has not been received as of the date of this Quarterly Report.

Nasdaq Shareholder Approval Requirements. The issuance of Common Shares upon (i) the automatic conversion of approximately $29.1 million of related-party indebtedness (plus approximately $4.3 million of accrued interest as of June 30, 2026) under the Conversion Agreement and (ii) the conversion of the Oxus Convertible Promissory Note described above is expected to require shareholder approval under Nasdaq Listing Rules 5635(b) (change of control) and potentially 5635(d) (issuance of 20% or more of outstanding Common Shares at a price below the Nasdaq minimum price). Shareholder approval of these matters was not sought at the Company’s June 29, 2026 annual meeting. The Conversion Agreement and the Note each contain provisions that defer the applicable conversion and extend the applicable maturity until the required shareholder approvals are obtained. The Company intends to convene a special meeting of shareholders, or to include the required proposals at its next annual meeting, to seek the required approvals. There can be no assurance that such approvals will be obtained.

EarlyBirdCapital Escrow Shares. As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, in November 2025, in connection with the extension of a promissory note originally issued to EarlyBirdCapital, Inc. (“EBC”), Barthelemy Helg and Reza Soltanzadeh (through Zagros Alpine Capital ULC) each provided 500,000 Common Shares as collateral. Following an alleged default under the note, the escrowed shares were transferred to EBC. In late April 2026, EBC advised the Company that a portion of such shares had been sold and the proceeds applied against amounts outstanding. On May 8, 2026, the Board of Directors determined that such shares had been provided solely for the benefit of the Company and resolved that the Company would take appropriate steps to make Mr. Helg and Mr. Soltanzadeh whole. As of the date of this Quarterly Report, no replacement shares have been issued.

Between April 1, 2026 and May 29, 2026, the Company received additional unsecured advances from the Non-Executive Chairman of the Board of Directors in the amount of $910,000.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the interim unaudited condensed consolidated financial statements and the related notes thereto included in Part I, Item 1 of this Quarterly Report, and our audited consolidated financial statements and related notes in our Annual Report filed on Form 10-K for the year ended December 31, 2025 (“Annual Report”) filed with the Securities and Exchange Commission (“SEC”) on June 2, 2026.

The following discussion and analysis may contain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, those set forth under Item 1.A., “Risk Factors,” included in Part I of the Annual Report.

Overview

Borealis Foods is a pioneering, integrated food science and manufacturing company that is redefining affordable nutrition. Known for popular ramen noodle brands including the high-protein Chef Woo, Chef Ramsay, Ramen Express, and Woodles, Borealis Foods brings innovative fusion flavors from diverse culinary traditions, creating delicious and nutritious meal options for consumers. With U.S.-based production facilities, the company’s portfolio reflects a commitment to quality, innovation, and sustainability.

The first quarter of 2026 reflects continued operational progress against our core strategic priorities: institutional channel expansion, gross margin defense, and SG&A rationalization. Net revenue increased 8.0% year-over-year to $7.37 million, loss from operations improved 29.3% to $(2.06) million from $(2.92) million in Q1 2025, and total SG&A declined 24.0% to $2.90 million. Net loss improved 16.1% to $(3.51) million from $(4.19) million in the prior year period.

Consistent with Borealis Foods’ strategy of partnership with prominent national and international food producers, retailers and distributors, the Company expanded institutional manufacturing partnerships and food service customer base through the addition of two global food manufacturers. One production arrangement was entered into during the first quarter of 2026 and the second was entered shortly after quarter-end. Under these arrangements, a leading global cereal and snack food company and a major multinational consumer packaged goods company now have production arrangements with the Company for manufacturing at our Saluda, South Carolina facility.

These relationships build upon the Company’s existing network of institutional partnerships and further expand our contracted demand pipeline and accelerate the path toward higher capacity utilization. Management believes these partnerships are an important step in the continued development of the Company’s institutional manufacturing business. The Company believes these relationships reflect confidence in the quality and capabilities of the PGF facility; as production volumes under these arrangements increase, the Company expects they may contribute to improved capacity utilization and greater absorption of fixed manufacturing costs, although the timing and extent of such benefits will depend on customer demand and production schedules.

Basis of Presentation

The unaudited condensed consolidated financial statements included in this Quarterly Report have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

~~ITEM~~Results 2.of ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Operations

~~You~~Comparison ~~should read the following discussion and analysis~~ of ~~our financial condition and results of operations in conjunction with~~ the ~~interim~~Three ~~unaudited~~Months ~~condensed~~Ended ~~consolidated financial~~March statements and the related notes thereto included in Part I, Item 1 of this Quarterly Report, and our audited consolidated financial statements and related notes in our Annual Report filed on Form 10-K for the year ended December 31, ~~2024~~2026 ~~(“Annual Report”) filed with the Securities~~ and ~~Exchange Commission (“SEC”) on April 15,~~ 2025.

The following ~~discussion~~sets ~~and~~forth ~~analysis~~a ~~may~~summary ~~contain forward-looking~~of ~~statements~~our ~~that involve risks and uncertainties. Our actual~~ results ~~may differ materially from those anticipated in these~~ ~~forward-looking statements as a result~~ of ~~various~~operations ~~factors,~~for ~~including,~~the ~~those~~presented ~~set~~months ~~forth~~($ ~~under Item 1.A., “Risk Factors,” included~~ in ~~Part I of the Annual Report.~~thousands):

Overview

	For the Three Months Ended March 31,												2026 vs 2025
	2026 (Unaudited)						2025 (Unaudited)						Variance
	$			% of Revenues, net			$			% of Revenues, net			$			% of Prior Period
Revenues
Gross sales	$	7,782					$	7,225					$	557
Sales discounts & allowances		(414	)		(6	)%		(379	)		(6	)%		(35	)		(0	)%
Revenue, net		7,368						6,846						522
Cost of goods sold		6,143			83	%		5,465			80	%		678			3	%
Depreciation		386			5	%		481			7	%		(95	)		(2	)%
Total cost of goods sold		6,529			89	%		5,946			87	%		583			2	%
Gross profit		839			11	%		900			13	%		(61	)		(2	)%
Sales & marketing		463			6	%		566			8	%		(103	)		(2	)%
Business development		446			6	%		607			9	%		(161	)		(3	)%
Training		133			2	%		201			3	%		(68	)		(1	)%
General & administrative expenses		1,858			25	%		2,443			36	%		(585	)		(11	)%
Total sales, general & administrative expenses		2,900			39	%		3,817			56	%		(917	)		(17	)%
Loss from operations		(2,061	)		(28	)%		(2,917	)		(43	)%		856			15	%
Total other expense		(1,451	)		(20	)%		(1,270	)		(19	)%		(181	)		(1	)%
Loss before income taxes		(3,512	)		(48	)%		(4,187	)		(61	)%		675			13	%
Income tax benefit		0			0	%		0			0	%					0	%
Net loss	$	(3,512	)		(48	)%	$	(4,187	)		(61	)%	$	675			13	%

Other financial Data:
Adjusted EBITDA	$	(181	)		(2	)%	$	(557	)		(8	)%	$	376			6	%

~~Borealis~~Adjusted ~~Foods~~EBITDA is a ~~pioneering,~~non-GAAP ~~integrated~~financial ~~food~~metric. ~~science~~See ~~and~~“How ~~manufacturing~~we ~~company~~Evaluate ~~that~~Our isOperations” ~~redefining~~below ~~affordable nutrition. Known~~ for ~~popular~~an ~~ramen~~explanation ~~noodle~~of ~~brands like~~ the ~~high~~terms ~~protein Chef~~EBITDA ~~Woo,~~and ~~Chef~~Adjusted ~~Ramsay,~~EBITDA ~~Ramen Express,~~ and ~~Woodles,~~a ~~Borealis~~reconciliation of ~~Foods~~net ~~brings~~income ~~innovative~~to ~~fusion~~EBITDA ~~flavors from diverse culinary traditions, creating delicious~~ and ~~nutritious~~Adjusted ~~meal~~EBITDA ~~options~~ for ~~consumers.~~each ~~With~~applicable Uperiod.~~S.-based production facilities, the company’s portfolio reflects a commitment to quality, innovation, and sustainability.~~

The Company continued to execute a strategic repositioning of its revenue base and customer portfolio in 2025, with an emphasis on gross margin expansion and operational efficiency. While total revenue declined compared to the prior year, gross profit turned positive, reflecting improved pricing dynamics, a more favorable product mix, and a deliberate move away from low-margin, high-volume retail partnerships.18

~~The~~Revenue ~~Reverse~~and ~~Recapitalization~~Customer Trends

OnNet ~~February~~revenue ~~23,~~increased ~~2023,~~8.0% ~~Borealis~~year-over-year ~~Foods~~to ~~Inc~~$7.~~, a corporation~~37 ~~incorporated~~million ~~under~~for the ~~laws~~three ofmonths ~~Canada~~ended ~~(“Legacy~~March ~~Borealis”)~~31, ~~entered into a Business Combination Agreement (as amended~~2026, ~~amended~~ ~~and~~compared ~~restated,~~to ~~supplemented,~~$6.85 ormillion ~~otherwise~~for ~~modified from time to time,~~ the ~~“Business~~three ~~Combination~~months ~~Agreement”) with~~ended ~~Oxus~~March ~~Acquisition~~31, ~~Corp~~2025. ~~(“Oxus”)~~Gross ~~and~~sales ~~1000397116 Ontario Inc~~increased 8.,0% anto ~~Ontario corporation and a wholly owned subsidiary of Oxus (“Newco”)~~$7.78 Onmillion ~~February~~from $7,.23 ~~2024,~~million ~~Legacy~~in ~~Borealis, Oxus, and Newco consummated~~ the ~~transactions~~prior ~~(collectively, the~~year ~~“Reverse~~period. ~~Recapitalization”)~~The ~~contemplated~~growth bywas ~~the~~driven ~~Business Combination Agreement~~ by ~~means~~continued expansion of aour ~~statutory~~institutional ~~arrangement~~food ~~under~~service ~~the Canada Business Corporations Act and the Business Corporations Act (Ontario)~~channel, ~~implemented~~including inincreased ~~accordance~~volumes ~~with~~from ~~the~~existing ~~terms~~partners and ~~conditions set forth in~~ the ~~Business~~initial ~~Combination~~contribution ~~Agreement~~from ~~and~~new ~~the~~major ~~related~~manufacturing ~~plan of arrangement (as amended, amended and restated, supplemented, or~~partnerships ~~otherwise~~entered ~~modified~~into ~~from~~during ~~time to time,~~ the ~~“Plan~~first ~~of Arrangement”) following the approval at an extraordinary general meeting of the shareholders of Oxus held on February 2, 2024~~quarter.

~~Pursuant~~The toquarter marks the ~~terms~~beginning of ~~the~~a ~~Business Combination~~meaningful ~~Agreement,~~expansion ~~among~~in ~~other~~our ~~things:~~customer ~~(i)~~base ~~Oxus domesticated~~ and ~~continued~~contracted asproduction avolume. ~~corporation~~During ~~under~~Q1 2026, the ~~laws~~Company ofentered ~~Ontario,~~into ~~Canada~~production ~~(“New~~arrangements ~~Oxus”);~~with ~~and~~two ~~(ii)~~globally ~~pursuant~~recognized toconsumer ~~the~~food ~~Plan of Arrangement~~companies, (one a) ~~Newco~~leading ~~and~~global ~~Legacy~~cereal ~~Borealis~~and ~~amalgamated~~snack ~~(the~~manufacturer ~~“Legacy Borealis Amalgamation”,~~ and the ~~amalgamated~~other ~~corporation~~a ~~resulting~~major ~~therefrom,~~multinational consumer ~~“Amalco”),~~packaged ~~with~~goods ~~Amalco~~company ~~surviving~~with ~~the~~an ~~Legacy~~extensive ~~Borealis~~food ~~Amalgamation as~~and abeverage ~~wholly-owned~~portfolio. ~~subsidiary~~These ofarrangements ~~New~~add ~~Oxus;~~two ~~and~~significant ~~(b)~~sources ~~following~~of ~~the~~contracted volume ~~Legacy~~to ~~Borealis~~our ~~Amalgamation,~~existing ~~New~~institutional ~~Oxus~~relationships and ~~Amalco~~are ~~amalgamated~~expected ~~(the~~to ~~“Borealis Amalgamation,”~~contribute ~~and~~meaningfully ~~together~~to ~~with~~revenue ~~the Legacy Borealis Amalgamation, the “Amalgamations,”~~ and ~~the~~capacity ~~corporation~~utilization ~~resulting~~beginning ~~therefrom.~~in ~~“Borealis,” as a corporation amalgamated under~~ the ~~Business~~second ~~Corporations~~quarter ~~Act~~of ~~(Ontario)),~~2026 ~~with~~and ~~Borealis~~accelerating ~~surviving~~ through the ~~Borealis~~remainder ~~Amalgamation.~~of ~~Borealis continues under~~ the ~~name “Borealis Foods Inc~~year.”.

~~Unless otherwise~~The ~~indicated,~~annualized ~~references~~revenue torun-rate ~~the~~implied ~~“Company,”~~by ~~“our,”~~Q1 2026 ~~“us”~~net orrevenue ~~“we”~~is inapproximately ~~this~~$29.47 ~~Item~~million. ~~2 refer~~Management toanticipates ~~Oxus~~this ~~Acquisition~~run-rate ~~Corp.,~~to orincrease ~~Oxus,~~materially ~~before~~as the ~~consummation~~new ofco-packing ~~the~~arrangements and ~~Transaction.~~expanded ~~References~~institutional tovolumes ~~our~~ramp ~~“management”~~through orthe ~~our “management~~remainder ~~team”~~of ~~refer~~2026. toRevenue ~~our~~concentration ~~officers~~with ~~and~~any ~~directors,~~single ~~and~~mass ~~references~~retail topartner ~~the~~has ~~“sponsor”~~continued to ~~refer~~decline, toconsistent ~~Oxus~~with ~~Capital Pte.~~our ~~Ltd.~~strategic ~~The~~objective ~~term~~of ~~“New~~building ~~Borealis”~~a ~~refers~~diversified, tohigh-quality ~~Borealis~~institutional ~~Foods~~manufacturing ~~Inc.~~portfolio ~~after~~that generates ~~the~~consistent ~~consummation~~large-order ofvolume ~~the~~at ~~Business~~favorable ~~Combination~~margins.

18Sales discounts and allowances were $0.41 million for Q1 2026, or 6.0% of gross sales, consistent with Q1 2025 at $0.38 million (also 6.0% of gross sales), reflecting stable promotional discipline as our customer mix continues to evolve toward institutional and manufacturing channels with lower promotional requirements.

~~Basis~~Product ofMix ~~Presentation~~and Margin Performance

~~Borealis~~Gross ~~Foods’~~profit ~~unaudited~~for ~~condensed~~the ~~consolidated~~three months ended March ~~financial~~31, ~~statements~~2026 ~~were~~was ~~prepared~~$0.84 inmillion ~~accordance~~(11.0% ~~with~~of Unet revenue), compared to $0.S90 million (13.0% of net revenue) for the three months ended March 31, 2025, a decrease of $0.06 million. Non-GAAP gross margin, less depreciation, was 16.0% ~~See~~for ~~Note~~Q1 12026 compared to ~~our~~20.0% ~~unaudited~~for ~~condensed~~Q1 ~~consolidated~~2025. ~~financial statements~~The ~~for~~year-over-year margin comparison reflects a ~~description~~product ofmix ~~our~~shift ~~basis~~in ofQ1 ~~presentation~~2026 as we onboard new partners initial production runs which typically carry lower per-unit margins as lines are qualified and production efficiencies are established. Management expects gross margin to recover and expand as these new relationships scale to full volume and line efficiencies are optimized.

~~Results~~The primary drivers of ~~Operations~~the gross profit variance are:

~~Comparison~~Volume-driven COGS increase: Cost of goods sold, excluding depreciation, increased $0.68 million year-over-year commensurate with the ~~Nine~~8.0% ~~Months~~increase ~~Ended~~in ~~September 30~~revenue, ~~2025~~reflecting higher raw material and ~~2024~~direct labor costs on the larger production base. As a percentage of net revenue, cost of goods sold (excluding depreciation) was 83.4% in Q1 2026 versus 80.0% in Q1 2025.

~~The~~New ~~following~~customer ~~sets~~onboarding ~~forth~~costs: aQ1 ~~summary~~2026 ofreflects the ~~our~~initial ~~results of~~production ~~operations~~qualification ~~for~~runs and related efficiency ramp-up costs associated with the ~~presented~~new ~~months~~major ($manufacturing inpartnerships. These ~~thousands):~~are transitional costs that are expected to normalize as production volumes reach steady-state.

	For the Nine Months Ended September 30,												2025 vs 2024
	2025 (Unaudited)						2024 (Unaudited)						Variance
	$			% of Revenues, net			$			% of Revenues, net			$			% of Prior Period
Revenues
Gross sales	$	22,165					$	22,036					$	129
Sales discounts & allowances		(1,027	)		(5	)%		(1,127	)		(5	)%		100			(0	)%
Revenue, net		21,138						20,909						229			0	%
Cost of goods sold		17,274			82	%		17,110			82	%		164			(0	)%
Depreciation		1,408			7	%		1,861			9	%		(453	)		(2	)%
Total cost of goods sold		18,682			88	%		18,971			91	%		(289	)		(2	)%
Gross profit (loss)		2,456			12	%		1,938			9	%		518			2	%
Sales & marketing		1,771			8	%		5,074			24	%		(3,303	)		(16	)%
Business development		1,613			8	%		2,476			12	%		(863	)		(4	)%
Training		645			3	%		1,364			7	%		(719	)		(6	)%
General & administrative expenses		6,624			31	%		8,808			42	%		(2,184	)		(11	)%
Total sales, general & administrative expenses		10,653			50	%		17,722			85	%		(7,069	)		(33	)%
Loss from operations		(8,197	)		(39	)%		(15,784	)		(75	)%		7,587			35	%
Total other expense		(4,357	)		(21	)%		(3,763	)		(18	)%		(593	)		(3	)%
Loss before income taxes		(12,554	)		(59	)%		(19,547	)		(93	)%		6,993			34	%
Income tax benefit		(14	)		(0	)%		(15	)		(0	)%		1			0	%
Net loss	$	(12,568	)		(59	)%	$	(19,562	)		(94	)%	$	6,994			34	%
Other financial Data:
Adjusted EBITDA	$	(2,038	)		(10	)%	$	(1,961	)		(10	)%	$	(77	)		0	%

Depreciation reduction: Depreciation within cost of goods sold declined to $0.39 million in Q1 2026 from $0.48 million in Q1 2025, a reduction of $0.09 million, reflecting the continued benefit of the machine-hours depreciation method under which charges vary with actual production utilization.

~~Adjusted~~The ~~EBITDA~~capacity isutilization aopportunity ~~non-GAAP~~remains ~~financial metric.~~the ~~See~~most ~~“How~~powerful welever ~~Evaluate~~available to the Company. Our ~~Operations”~~Saluda, ~~below~~South ~~for~~Carolina facility operates at an ~~explanation~~installed capacity of ~~the~~600 ~~terms~~million ~~EBITDA~~meals per year, and ~~Adjusted~~current ~~EBITDA~~production ~~and~~levels represent a ~~reconciliation~~ small fraction of ~~net~~that ~~income~~capacity. The addition of the new manufacturing partnerships in Q1 2026 is the most direct mechanism available to ~~EBITDA~~us for increasing utilization. We believe the contracted demand pipeline now in place with our institutional and ~~Adjusted~~co-packing ~~EBITDA~~partners ~~for~~provides ~~each~~the ~~applicable~~clearest ~~period~~pathway we have had to date toward achieving that utilization level.’

~~Revenue~~Operating Expenses and ~~Customer~~SG&A Trends

~~Net~~Total ~~revenue~~selling, general and administrative expenses declined 24.0% year-over-year to $2.90 million, or 39.0% of net revenue, for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, ~~was~~compared to $213.1 82 million, aor ~~slight~~56.0% ~~increase~~of ~~from~~net ~~$20~~revenue, for the three months ended March 31, 2025.9 ~~million~~This represents the continuation of the structural SG&A reduction that accelerated in ~~2024~~the second half of fiscal 2025. The ~~increase~~$0.92 ~~was~~million ~~primarily driven~~reduction byin ~~continued~~Q1 ~~growth~~2026 inSG&A ~~institutional~~is ~~channels~~broad-based across all expense categories and ~~branded~~reflects ~~sales,~~normalization ~~offset~~of byour ~~the~~cost ~~planned~~base ~~exit~~as ~~from~~the ~~certain~~food ~~low-margin~~service ~~retail~~channel ~~programs~~matures.

~~Product~~Key ~~Mix~~drivers ~~and~~of ~~Margin~~the ~~Performance~~Q1 2026 SG&A improvement include:

~~Gross~~● ~~profit~~General ~~improved~~and toadministrative expenses declined $20.559 million, ~~(12~~or 24.0%, ofto ~~net revenue) from~~ $1.9 86 million, ~~(9%)~~driven inby ~~the~~lower ~~prior-year~~professional ~~period~~fees, anreduced ~~increase~~legal ofand ~~$0.6~~audit ~~million (32%). Excluding depreciation~~costs, ~~non-GAAP~~and ~~gross~~tighter ~~margin~~management ~~was~~of ~~approximately 18%,~~discretionary ~~consistent~~administrative ~~with 18% in 2024~~spending.

~~Operating~~● ~~Expenses~~Sales and ~~SG&A~~marketing ~~Trends~~expenses declined $0.10 million, or 18.2%, to $0.46 million, reflecting the normalization of marketing spend following the intensive national launch activities of early 2025.

~~Total SG&A~~● Business development expenses declined ~~40%~~$0.16 ~~year-over-year~~million, or 27.0%, to $100.745 million, ~~from~~as ~~$17.7~~the ~~million~~food inservice ~~2024.~~channel ~~This~~build-out ~~reduction~~costs ~~resulted~~have ~~from:~~moderated with the establishment of recurring institutional relationships.

● ~~Completion~~Training ofand ~~one~~start-~~time~~up ~~professional~~costs ~~and~~declined ~~legal~~$0.07 ~~fees~~million, ~~related~~or 33.0%, to $0.13 million, reflecting continued stabilization of the ~~Company’s~~PGF ~~2024~~manufacturing ~~public~~team ~~listing~~as production capabilities have matured.

●The ~~Scaled~~Q1 2026 annualized SG&A run-~~back~~rate ~~marketing~~of ~~and~~approximately $11.60 ~~advertising~~million ~~expenditures~~continues the downward trajectory. Management expects this run-rate to remain stable or continue to improve, with the new manufacturing relationships not expected to require material incremental SG&A investment given the institutional nature of those arrangements.

●Cash ~~Lower training and administrative costs resulting from tighter cost control.~~Flows

~~Loss~~The ~~from~~following ~~operations~~table ~~improved~~sets toforth ~~$8.2 million,~~our ~~compared~~cash ~~with~~flows ~~$15.8~~for ~~million in~~ the ~~prior~~periods ~~year, a 48% improvement. Adjusted EBITDA loss~~ indicated (~~non-GAAP) was~~ $~~2.0~~ ~~million, compared to $2.0 million~~ in ~~2024. Net loss narrowed to $12.6 million, compared with $19.6 million, a 36% improvement year-over-year.~~thousands):

Cash Flows

	Three Months Ended March 31,
	2026			2025
Net cash (used in) provided by:
Operating Activities	$	(123	)	$	(1,373	)
Investing Activities		—			(26	)
Financing Activities		539			938

~~The~~Operating ~~following table sets forth our cash flows for the periods indicated ($ in thousands):~~Activities

	Nine Months Ended September 30,						Year Ended December 31,
	2025			2024			2024			2023
Net cash (used in) provided by:
Operating Activities	$	(3,760	)	$	(14,270	)	$	(15,090	)	$	(18,005	)
Investing Activities		(61	)		(1,709	)		(1,907	)		(4,466	)
Financing Activities		3,297			9,085			10,034			24,940

Net cash used in operating activities for the three months ended March 31, 2026 was $0.12 million, primarily driven by the net loss of $3.51 million, adjusted for non-cash charges of $0.39 million for depreciation and amortization. This represents a 91% improvement from the $1.37 million used in the same period of 2025 primarily as a result of favorable changes in working capital, including a $0.87 million decrease in accounts receivable and a $1.08 million decrease in inventories, partially offset by a slight year-over-year decline in gross profit ($0.84 million in Q1 2026 compared to $0.90 million in Q1 2025).

~~Operating~~Investing Activities

Net cash used in ~~operating~~investing activities ~~for the nine months ended September 30, 2025~~ was $~~3.8~~0 million, ~~primarily~~for ~~driven by~~ the ~~net~~three months ~~loss~~ended ofMarch ~~$12.6 million~~31, ~~adjusted for non-cash charges of $1~~2026.40 ~~million for depreciation and amortization.~~ This ~~represents~~decrease ~~a 73% improvement~~ from ~~the~~ $140.303 million ~~used~~ in the ~~same~~three ~~period~~months ~~of 2024~~ended March 31, as2025 ~~Borealis~~aligns ~~benefited~~with ~~from~~our ~~enhanced~~focused ~~gross~~approach to ~~profit~~capital ~~due~~expenditures, toparticularly as the ~~performance~~Company ofseeks ~~high-margin~~to ~~products~~improve ~~like~~asset ~~Chef~~utilization ~~Woo~~ and ~~Woodles,~~operational ~~which~~efficiencies without significant ~~partially~~expansion ~~offset~~of ~~operational~~its ~~expenses~~production line.

~~Investing~~Financing Activities

Net cash ~~used~~provided inby ~~investing~~financing activities ~~was~~during ~~$0.6 million for~~ the ~~nine~~three months ended March ~~September 30~~31, ~~2025~~2026, ~~primarily~~was ~~attributable~~$0.54 tomillion, ~~purchases~~financing ofwas ~~intangible~~driven ~~assets~~by toadvances ~~support~~from ~~production~~related ~~scale and~~parties. ~~efficiency~~In ~~improvements.~~comparison, ~~This~~net ~~decrease~~cash ~~from~~provided ~~$1.7~~by ~~million~~financing activities in ~~2024~~the ~~aligns~~three ~~with~~months ~~our~~ended ~~focused~~March ~~approach~~31, to2025, ~~capital~~was ~~expenditures~~$0.94 million, ~~particularly as~~and ~~the~~largely ~~Company~~attributable ~~seeks~~ to ~~improve~~borrowings ~~asset~~on ~~utilization~~the ~~and~~line ~~operational~~of ~~efficiencies~~credit, proceeds ~~without~~from ~~significant~~convertible ~~expansion~~debt ofand ~~its~~related ~~production~~party ~~line~~advances.

~~Financing~~Liquidity ~~Activities~~and Capital Resources

~~Net~~As ~~cash~~of ~~provided~~March by31, ~~financing~~2026, ~~activities~~our ~~during the~~primary ~~nine~~sources ~~months~~of ~~ended~~liquidity ~~September~~were ~~30,~~borrowings under ~~2025,~~the ~~was~~FrontWell ~~$3.3~~Capital ~~million,~~Partners ~~financing~~credit ~~was~~facility ~~driven~~and by advances from related parties., Inas ~~comparison,~~cash ~~net~~generated from operations were not sufficient ~~cash~~to ~~provided~~fund byour ~~financing~~operating ~~activities~~requirements. inAs of the ~~nine~~balance ~~months~~sheet ~~ended 2024~~date, ~~was~~we ~~$9.1~~had ~~million,~~cash and ~~largely~~cash ~~attributable~~equivalents toof ~~borrowings~~approximately on$0.48 ~~the~~million ~~line~~and ofa ~~credit~~working ~~and~~capital ~~proceeds~~deficit ~~from~~of ~~convertible~~approximately ~~debt~~$(65.02) million. The ~~financing~~Company ~~activities~~was inreliant ~~2025~~on ~~primarily~~related ~~support~~party ~~working~~funding ~~capital needs~~ and ~~strategic~~vendor ~~investments~~payment timing into ~~growth~~meet ~~initiatives~~near-term obligations as of March 31, 2026.

~~Comparison~~As of March 31, 2026, the ~~Three~~FrontWell ~~Months~~term ~~Ended~~facility ~~September~~carried a balloon 30payment of approximately $14.08 million due in August 2026, ~~2025~~with an additional $2.21 million outstanding under the revolving line of credit. This scheduled maturity, occurring within twelve months of the balance sheet date, represented the most significant near-term capital structure risk as of March 31, 2026. Management was actively engaged in discussions with FrontWell and ~~2024~~evaluating alternative secured financing arrangements supported by the Company’s $43.51 million net PP&E asset base in order to refinance or extend this obligation prior to its maturity.

The ~~following~~addition ~~sets~~of ~~forth~~two amajor ~~summary~~global food manufacturers as manufacturing customers, one at the end of ~~our~~Q1 ~~results~~2026 and one shortly thereafter, is expected to improve the Company’s liquidity trajectory ofby ~~operations~~generating ~~for~~contracted, large-order institutional volume that improves working capital predictability and strengthens the ~~presented~~borrowing base. ~~months~~Management ($believes this expanded demand pipeline positions the Company to improve its working capital profile as these relationships reach full production volume in ~~thousands):~~the quarters ahead.

	For the Three Months Ended September 30,												2025 vs 2024
	2025 (Unaudited)						2024 (Unaudited)						Variance
	$			% of Revenues, net			$			% of Revenues, net			$			% of Prior Period
Revenues
Gross sales	$	7,364					$	8,076					$	(712	)
Sales discounts & allowances		(260	)		(4	)%		(388	)		(5	)%		128			0	%
Revenue, net		7,104						7,688						(584	)		0	%
Cost of goods sold		5,610			79	%		5,953			77	%		(343	)		2	%
Depreciation		453			6	%		462			6	%		(9	)		0	%
Total cost of goods sold		6,063			85	%		6,415			83	%		(351	)		2	%
Gross profit (loss)		1,041			15	%		1,273			17	%		(232	)		(2	)%
Sales & marketing		618			9	%		1,123			15	%		(505	)		(6	)%
Business development		488			7	%		1,307			17	%		(819	)		(10	)%
Training		251			4	%		478			6	%		(227	)		(3	)%
General & administrative expenses		1,608			23	%		1,986			26	%		(379	)		(2	)%
Total sales, general & administrative expenses		2,965			42	%		4,894			64	%		(1,929	)		(21	)%
Loss from operations		(1,924	)		(27	)%		(3,621	)		(47	)%		1,696			19	%
Total other expense		(1,856	)		(26	)%		(1,210	)		(16	)%		(646	)		(10	)%
Loss before income taxes		(3,780	)		(53	)%		(4,831	)		(63	)%		1,050			10	%
Income tax benefit		0			0	%		(1	)		(0	)%		1			0	%
Net loss	$	(3,780	)		(53	)%	$	(4,832	)		(63	)%	$	1,050			10	%
Other financial Data:
Adjusted EBITDA	$	293			4	%	$	17			0	%	$	276			4	%

Subsequent to March 31, 2026, the Company completed two related-party financing transactions that materially changed its capital structure and liquidity position. The April 27, 2026 Oxus Credit Agreement was previously disclosed in the Company's Annual Report on Form 10-K; the May 29, 2026 Oxus Convertible Promissory Note was not.

~~Adjusted~~On ~~EBITDA~~April is27, 2026, the FrontWell credit facility was retired in full through a ~~non~~$17.00 million term loan from Oxus Capital, a related-~~GAAP~~party ~~financial~~major ~~metric~~shareholder controlled by Kenges Rakishev, eliminating the August 2026 balloon maturity. On May 29, 2026, the Company issued a separate $3.0 million senior unsecured convertible promissory note ~~See~~to ~~“How~~Oxus weCapital, ~~Evaluate~~bearing ~~Our~~interest ~~Operations”~~at ~~below~~10% ~~for~~per anannum ~~explanation~~and maturing August 29, 2026 (subject to automatic extension pending receipt of ~~the~~required shareholder ~~terms~~approvals), ~~EBITDA~~convertible ~~and~~at ~~Adjusted~~Oxus ~~EBITDA~~Capital's ~~and~~election at maturity into Common Shares at $1.45 per share, subject to a ~~reconciliation~~49.9% beneficial ofownership ~~net~~blocker. ~~income~~These totransactions ~~EBITDA~~are described in detail under “Subsequent Events” above and ~~Adjusted~~are ~~EBITDA~~not ~~for~~reflected ~~each~~in ~~applicable~~the March ~~period~~31, 2026 balance sheet.

21Balance Sheet and Contractual Obligations

~~Revenue~~Our cash position, though lower than prior periods, reflects its active investment in operational scale-up and ~~Customer~~the ~~Trends~~expansion of high-margin product lines. Borealis Foods’ contractual obligations, including operating leases, accounts payable, and convertible notes, remain in line with planned financial commitments and reflect our strategic focus on sustainable growth.

Net revenue for the three months ended September 30, 2025 was $7.1 million, compared to $7.7 million in the same period of 2024, representing a slight decline of $0.6 million (8%). The modest reduction reflects timing of customer shipments and completion of certain mass retail programs offset by continued growth from institutional and branded accounts including Ramen Express, and Chef Woo.21

~~The~~Future ~~Company~~Capital ~~continued~~Requirements ~~its transition toward food-service~~ and institutional markets, which provide improved pricing power and stable recurring demand. Retail exposure was intentionally reduced during the period as management concentrated on higher-margin SKUs and branded products aligned with institutional growth.Liquidity

~~Product~~We ~~Mix~~need additional capital to meet our funding requirements through the next twelve months, particularly to support our expansion into the premium retail segment with a prominent global brand. As of March 31, 2026, we had cash-on-hand of $0.48 million and ~~Margin~~negative ~~Performance~~working capital of $65.02 million. Our current business plan has mitigated some capital expenditure requirements, as operational efficiencies in existing production lines have reduced the need for immediate expansion. We are actively exploring additional financing options to strengthen liquidity; however, there can be no assurance that such funding will be available on favorable terms or at all. If we cannot obtain adequate additional financing, among other things, we may have to substantially curtail or limit our research, marketing, production or distribution activities, sell assets of the Company or seek protection from creditors under bankruptcy laws, which could materially and adversely affect our business plan. Inadequate financial resources could also continue to raise substantial doubt about our ability to continue as a going concern.

~~Gross~~Going profit for the quarter totaled $1.0 million (14% of net revenue) versus $1.3 million (17%) in the prior-year quarter. The year-over-year change reflects temporary shifts in production and product mix ahead of the seasonal rollouts, along with higher packaging costs and promotional timing. Depreciation expense was consistent at $0.5 million, and excluding depreciation, non-GAAP gross margin approximated 21%, compared with 23% in 2024.Concern

~~Margin~~The ~~expansion~~accompanying isunaudited ~~expected~~condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As of March 31, 2026, conditions existed that raised substantial doubt about the Company’s ability to ~~resume~~continue as ~~new~~a going concern within one year after the date these financial ~~higher-margin~~statements ~~branded~~are ~~products~~issued. Those conditions included: (i) recurring net losses, including ~~Woodles~~a ~~and~~net ~~Chef~~loss ~~Woo~~of $3.51 million for the three months ended March 31, ~~begin~~2026; ~~shipping~~(ii) net cash used in operating activities of approximately $0.12 millon for the ~~fourth~~three ~~quarter~~months ended March 31, 2026; (iii) a working capital deficit of approximately $(65.02) million as of March 31, 2026; and ~~extend~~(iv) ~~through~~the ~~April~~FrontWell term facility balloon payment of approximately $14.08 million due in August 2026, which was within twelve months of the balance sheet date.

~~Operating~~As ~~Expenses~~of ~~and~~March ~~SG&A~~31, ~~Trends~~2026, management’s plans to address the going concern conditions included the following:

AsFrontWell Refinancing: Management was actively engaged in discussions with FrontWell Capital Partners regarding the ~~Company~~refinancing, ~~enters~~amendment, or extension of the term facility prior to its ~~primary~~August ~~seasonal~~2026 ~~production~~maturity. ~~window~~The Company’s $43.51 million net PP&E asset base, ~~investments~~representing inone ~~business~~of ~~development~~the ~~and~~most ~~R&D~~advanced ~~were~~ramen ~~made~~manufacturing facilities in North America, was expected to support ~~new high~~asset-~~margin SKUs~~based ~~and~~refinancing ~~expanded~~at ~~institutional~~a ~~partnerships~~scale sufficient to materially extend the Company’s debt runway.

~~Total~~New ~~SG&A~~Institutional ~~expenses~~Manufacturing ~~decreased~~Partnerships: During ~~38%~~the ~~year-over-year~~first quarter of 2026 and shortly thereafter, the Company entered into production arrangements with two major global food manufacturers. These relationships were expected to ~~$3.0~~generate ~~million~~meaningful ~~from~~contracted ~~$4.9~~production ~~million~~volume beginning in ~~the~~Q2 ~~third~~2026, ~~quarter~~improving ofcapacity ~~2024.~~utilization, revenue ~~Key~~predictability, ~~drivers~~and ~~included:~~the Company’s borrowing base.

●Continued ARelated ~~45%~~Party ~~reduction~~Financial inSupport: ~~sales~~The Company’s Chairman and ~~marketing~~CEO ~~expenses~~have historically provided, ~~reflecting~~and ~~conclusion~~as of ~~broad~~March ~~retail~~31, ~~promotional~~2026 ~~activities~~were expected to continue providing, financial support as needed. Advances of $2.05 million and $0.28 million, respectively, had been provided by the Chairman and CEO subsequent to December 31, 2025 and prior to the filing date of the Annual Report on Form 10-K and their continued support was considered a mitigating factor in management’s going concern assessment.

●Additional ~~Lower~~Financing: ~~training~~The Company was actively pursuing additional equity offerings, convertible debt, and ~~administrative~~strategic ~~costs~~financing ~~due~~arrangements to ~~greater~~provide ~~operational~~working ~~efficiency~~capital to support the institutional production ramp and to strengthen the balance sheet.

●SG&A ~~Targeted~~Cost ~~increases~~Reduction: inTotal ~~business-development~~SG&A ~~spending~~for tothe three ~~support~~months ~~institutional~~ended ~~expansion~~March 31, 2026 was $2.90 million, a 24.0% reduction from the prior year period, reflecting a lower and ~~new~~more ~~product~~sustainable operating ~~introductions~~cost structure that reduces the amount of revenue required to achieve operating breakeven.

~~Loss~~Subsequent ~~from~~to ~~operations~~March ~~improved~~31, to2026, the Company executed certain elements of its plan: on April 27, 2026, the FrontWell credit facility was retired in full through the $117.90 million, ~~compared~~Oxus Credit Agreement with Oxus Capital, a related-party major shareholder controlled by Kenges Rakishev, and on May 29, 2026, the Company issued a separate $3.600 million unsecured convertible promissory note to Oxus Capital. These transactions eliminate the August 2026 FrontWell inballoon maturity that was the ~~prior~~most significant near-~~year~~term ~~period~~capital structure risk identified as of the balance sheet date. Notwithstanding these transactions, ~~while~~management ~~net~~has ~~loss~~concluded ~~narrowed~~under ASC 205-40 that substantial doubt about the Company's ability to $3continue as a going concern has not been alleviated.8 ~~million~~Material ~~from~~conditions remain, including: (i) the requirement to consummate at least $470.800 million of equity financing at $9.00 ~~Adjusted~~per ~~EBITDA~~share on or before July 1, 2026, for which the Company has no commitments and which threshold is substantially above recent trading prices of the Common Shares; (~~non-GAAP~~ii) ~~was~~if such financing is not consummated, the contractual conversion of approximately $029.313 million, ~~compared with~~of related-party indebtedness (plus approximately $04.026 million inof ~~the~~accrued ~~prior~~interest ~~year~~as of June 30, ~~reflecting~~2026) ~~timing~~into Common Shares, which conversion is itself subject to receipt of ~~higher~~shareholder approvals required under Nasdaq Listing Rules 5635(b) and 5635(d) that have not been obtained; (iii) the Company’s continued reliance on demand and past-~~margin~~due ~~shipments~~obligations ~~now~~to ~~expected~~related inparties; Q4and ~~2025~~(iv) ~~through~~the ~~early~~fact that ~~2026~~the Company’s total liabilities continue to exceed total assets.

~~Liquidity~~Contractual Obligations and ~~Capital Resources~~Commitments

AsThe offollowing ~~September~~table ~~30,~~summarizes ~~2025,~~our ~~the Company continued~~non-cancellable tocontractual ~~operate~~obligations ~~under~~and ~~liquidity~~other ~~constraints.~~commitments ~~However,~~as ~~ongoing~~of ~~improvements~~March ~~in product mix~~31, ~~operating efficiency~~2026, and ~~SG&A~~the ~~reductions~~effects ~~have begun~~that tosuch ~~stabilize~~obligations ~~working~~are ~~capital~~expected ~~requirements.~~to ~~Management~~have ~~remains focused~~ on ~~cash~~our liquidity ~~preservation~~ and ~~aligning~~cash ~~inventory~~flow ~~purchases~~for ~~with committed~~future ~~demand~~periods ~~from~~(in ~~large institutional customers.~~thousands):

During the nine months ended September 30, 2025, the Chairman and the Chief Executive Officer have advanced funds totaling $3.7 million to support operations and the Chief Executive Officer deferred approximately $0.33 million of compensation. These advances are related-party transactions; we expect to disclose the key terms, including maturity, ranking, collateral (if any), and interest. The Company did not raise external capital during the period. If the Company cannot obtain adequate additional financing, it may be required to substantially curtail or limit research, marketing, production, or distribution activities, sell assets, or seek protection from creditors under bankruptcy laws.

		Total				Less than 1 year				1-3 years				4-5 years				More than 5 years
Contractual obligations and other commitments *		$	72,270			$	71,847			$	423			$	—			$	—

~~Looking~~(*) ~~ahead,~~Includes ~~management~~operating ~~expects~~lease ~~that~~liabilities ~~increased contribution~~for ~~from~~certain ~~high-volume~~of ~~institutional~~our ~~channels,~~offices ~~combined~~and ~~with~~facilities, ~~disciplined~~accounts ~~cost control~~payable, ~~will enhance cash conversion~~ and ~~support improved~~accrued ~~working~~expenses ~~capital~~including ~~efficiency~~related inparty ~~the 4th quarter of 2025~~notes.

~~Balance~~The ~~Sheet~~commitment amounts in the table above are associated with contracts that are enforceable and ~~Contractual~~legally ~~Obligations~~binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty.

~~Our cash position, though lower than prior periods, reflects its active investment in operational scale~~Off-upBalance ~~and~~Sheet the expansion of high-margin product lines. Borealis Foods’ contractual obligations, including operating leases, accounts payable, and convertible notes, remain in line with planned financial commitments and reflect our strategic focus on sustainable growth.Arrangements

~~Future~~As ~~Capital~~of ~~Requirements~~March 31, 2026 and ~~Liquidity~~December 31, 2025, we did not engage in any off-balance sheet arrangements, including the use of structured finance, special purpose entities, or variable interest entities.

We need additional capital to meet our funding requirements through fiscal year 2025, particularly to support our expansion into the premium retail segment with a prominent global brand. As of September 30, 2025, we had cash-on-hand of $0.1 million and negative working capital of $54.6 million. Our current business plan has mitigated some capital expenditure requirements, as operational efficiencies in existing production lines have reduced the need for immediate expansion. We are actively exploring additional financing options to strengthen liquidity; however, there can be no assurance that such funding will be available on favorable terms or at all. If we cannot obtain adequate additional financing, among other things, we may have to substantially curtail or limit our research, marketing, production or distribution activities, sell assets of the Company or seek protection from creditors under bankruptcy laws, which could materially and adversely affect our business plan. Inadequate financial resources could also continue to raise substantial doubt about our ability to continue as a going concern.Warrants

~~Going~~The ~~Concern~~following represents a summary of warrants outstanding and exercisable as of March 31, 2026:

Management has evaluated whether conditions and events raise substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance of these unaudited condensed consolidated financial statements (November 19, 2025). While the Company has historically experienced recurring operating losses and liquidity constraints, the financial results through the nine months ended September 30, 2025 reflect meaningful and measurable progress toward operational stabilization, improved margins, and a more durable customer and product mix.

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

~~During~~Following the ~~third~~closing ~~quarter~~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 ~~2025~~$0.01 per warrant, provided that the ~~Company~~last reported sales price of Common Shares equals or exceeds $18.00 per share (as adjusted ~~executed~~for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 days within a ~~significant~~30 ~~cost-structure~~trading ~~reset~~day period commencing once the warrants become exercisable and ~~achieved~~ending ~~sustained~~on ~~financial~~the ~~improvements~~third ~~across~~trading ~~several~~day ~~key~~prior ~~areas:~~to the date on which Borealis gives proper notice of such redemption and provided certain other conditions are met.

●The ~~SG&A~~public ~~declined~~warrants ~~38%~~are ~~year-over-year~~identical ~~for~~to ~~Q3,~~the ~~and~~2021 private ~~40%~~placement ~~YTD~~warrants in material terms and provisions, ~~reflecting~~except the ~~elimination~~private ofplacement ~~one-time~~warrants ~~SPAC~~were ~~and~~not ~~transaction-related expenses~~transferable, ~~tighter~~assignable ~~labor~~or salable ~~management,~~until ~~and~~30 ~~focused~~days ~~reductions~~after inthe ~~nonessential~~completion ~~overhead~~of the Reverse Recapitalization.

●Subsequent ~~Inventory was reduced by approximately $2.0 million year-over-year, improving working-capital turnover and lowering carrying costs.~~Events

23The Company evaluated events and transactions occurring after March 31, 2026 through the date these financial statements were available to be issued. The following subsequent events are disclosed as they are material to the financial condition and results of operations of the Company.

●Related ~~Revenues~~Party ~~remained~~Refinancing ~~stable,~~— ~~with~~April ~~YTD~~27, ~~net revenues slightly higher than the prior-year period despite exiting low-margin ramen and shifting toward higher-value channels.~~2026

●On ~~Production~~April 27, 2026, the Company's subsidiaries entered into the Oxus Credit Agreement with Oxus Capital PTE Ltd., a major shareholder of the Company controlled by Kenges Rakishev (the beneficial owner of approximately 39.09% of the Company's outstanding Common Shares), as more fully described in Note 4 and ~~inventory~~Note ~~levels~~11 ~~are~~to ~~now~~the ~~aligned~~unaudited condensed consolidated financial statements. The proceeds from this loan were used to: (i) retire in full the outstanding principal and accrued interest under the FrontWell Capital Partners credit facility, including both the term loan (with ~~committed~~an ~~institutional~~approximately ~~demand~~$14.08 million balloon that had been due in August 2026) and the revolving line of credit (approximately $2.69 million outstanding as of December 31, ~~providing~~2025); and ~~improved~~(ii) ~~visibility~~repay ~~into~~a portion of existing related party obligations. The transaction eliminates the August 2026 FrontWell maturity event that had been identified as the most significant near-term ~~cash~~capital ~~conversion~~structure ~~and~~risk ~~reducing~~in ~~volatility~~the inCompany’s ~~manufacturing~~Annual ~~costs~~Report on Form 10-K for the fiscal year ended December 31, 2025.

Although these improvements represent a clearer operating trajectory than in prior periods, the Company’s current cash position and forecasted operating requirements indicate that additional capital will be necessary to fund operations over the next twelve months. As of September 30, 2025, current liabilities included approximately $10.1 million outstanding under our revolving line of credit, approximately $15.00 million under our term loan, $5.2 million of current notes payable, and $19.1 million due to related parties (including demand notes and near-term maturities). Our debt facilities contain financial and other covenants; failure to maintain compliance, or to obtain waivers, could result in acceleration and foreclosure on collateral. As of September 30, 2025, cash was approximately $0.1 million, and current liabilities significantly exceeded current assets, reflecting continuing liquidity pressure, including current maturities of debt and related-party obligations. The Company has had extended payment terms and past-due accounts payable with the majority of its vendors and suppliers. These vendors and suppliers have had long term relationships with the Company and have been supporting in providing accommodations that help manage working capital needs to meet production demands as the Company advances its capital-raising efforts to strengthen its balance sheet.23

~~The~~Conversion Agreement. In connection with the Oxus Credit Agreement, the Company ~~did~~entered ~~not~~into ~~raise~~a ~~external~~Conversion ~~capital~~Agreement ~~during~~with Oxus Capital, Reza Soltanzadeh (“CEO”), and Barthelemy Helg (“Non-Executive Chairman”) (collectively, the ~~first~~“Shareholders”). ~~nine~~Pursuant ~~months~~to the Conversion Agreement, approximately $29.1 million in aggregate principal amount of ~~2025~~indebtedness ~~but~~previously isadvanced ~~actively~~by ~~evaluating~~the ~~several~~Shareholders ~~financing~~to ~~alternatives~~the Company, ~~including~~plus ~~incremental~~approximately $4.3 ~~debt~~million ~~capacity~~in accrued interest (calculated through June 30, 2026), will automatically convert into Common Shares if the Company does not consummate one or more equity ~~issuances~~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. If the automatic conversion occurs, existing shareholders would experience substantial dilution. Board Reconstitution. Pursuant to the Oxus Credit Agreement, the Company was required, no later than May 11, 2026, to reconstitute its Board of Directors by appointing Pavel Mynzhanov and ~~strategic~~Zaure ~~partnerships~~Algaziyeva ~~tied~~(or such other individuals acceptable to ~~long-term~~Oxus ~~supply~~Capital). ~~programs~~Pavel Mynzhanov, who has served as a Director of Oxus Capital since June 2022, was appointed to the Board in May 2026.

~~Management~~Nasdaq ~~believes~~Shareholder ~~the~~Approval ~~strengthened~~Requirements. ~~margin~~The ~~profile,~~issuance of Common Shares upon (i) the ~~shift~~automatic toconversion ~~recurring~~of ~~institutional~~approximately ~~demand~~$29.1 million of related-party indebtedness (plus approximately $4.3 million of accrued interest as of June 30, ~~and~~2026) under the ~~structural~~Conversion ~~reduction~~Agreement inand ~~SG&A~~(ii) ~~provide~~the aconversion ~~foundation~~of ~~for~~the ~~improved~~Oxus ~~financial~~Convertible ~~performance~~Promissory inNote ~~future~~described ~~periods.~~above ~~Nonetheless,~~is ~~there~~expected ~~can~~to berequire noshareholder ~~assurance~~approval ~~that~~under ~~external~~Nasdaq ~~financing~~Listing ~~will~~Rules be5635(b) ~~available~~(change onof ~~acceptable~~control) ~~terms~~and potentially 5635(d) (issuance of 20% or more of outstanding Common Shares at ~~all~~a price below the Nasdaq minimum price). ~~If adequate~~Shareholder ~~funding~~approval isof these matters was not ~~secured,~~sought at the Company’s ~~may~~June be29, 2026 annual meeting. The Conversion Agreement and the Note each contain provisions that defer the applicable conversion and extend the applicable maturity until the required shareholder approvals are obtained. The Company intends to ~~reduce~~convene ~~production,~~a ~~delay~~special ~~capital~~meeting ~~expenditures~~of shareholders, ~~implement~~or ~~additional~~to ~~cost-reduction measures,~~include ~~divest~~the ~~certain~~required ~~assets~~proposals at its next annual meeting, orto seek ~~protection~~the ~~under U~~required approvals.S. ~~bankruptcy~~There ~~laws~~can be no assurance that such approvals will be obtained.

~~Because~~Additional ~~these~~Related ~~conditions~~Party ~~continue~~Financing to— ~~raise substantial~~May ~~doubt about the Company’s ability to continue as a going concern within one year of the date of issuance (November 19~~29, 2025), the accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern and do not include adjustments that might result from this uncertainty.2026

~~Contractual~~On ~~Obligations~~May 29, 2026, the Company issued a $3.0 million senior unsecured convertible promissory note to Oxus Capital, bearing interest at 10% per annum and ~~Commitments~~maturing August 29, 2026 (subject to automatic extension if required shareholder approvals for conversion have not been obtained). The Note is convertible at Oxus Capital's election at maturity into Common Shares at $1.45 per share, subject to a 49.9% beneficial ownership blocker. The Note constitutes a related party transaction. See Note 11.

The ~~following~~April ~~table~~27, ~~summarizes~~2026 ~~our~~and ~~non~~May 29, 2026 related party financings collectively: (i) eliminate the August 2026 FrontWell balloon maturity that had constituted the most critical near-~~cancellable~~term going concern trigger; (ii) ~~contractual~~consolidate ~~obligations~~the ~~and~~Company’s ~~other~~secured ~~commitments~~debt asinto ofrelated ~~September~~party 30obligations with, ~~2025~~management believes, more flexible repayment terms; and (iii) provide $3.00 million in incremental working capital to support the ~~effects~~operational ~~that~~ramp. ~~such~~Notwithstanding ~~obligations~~these ~~are~~transactions, ~~expected~~substantial doubt about the Company’s ability to ~~have~~continue onas a going concern has not been alleviated under ASC 205-40, as more fully described ~~our~~above ~~liquidity~~under “Going Concern” and ~~cash~~in ~~flow~~Note ~~for~~1 ~~future~~to ~~periods~~the ~~(in~~unaudited ~~thousands):~~condensed consolidated financial statements.

		Total				Less than 1 year				1-3 years				4-5 years				More than 5 years
Contractual obligations and other commitments *		$	67,784			$	64,117			$	3,667			$	—			$	—

~~(*)~~Between ~~Includes~~April ~~operating~~1, ~~lease~~2026 ~~liabilities~~and ~~for~~May ~~certain~~29, of2026, ~~our~~the ~~offices~~Company received ~~and~~additional ~~facilities,~~unsecured ~~accounts~~advances ~~payable,~~from ~~and~~the ~~accrued~~Chairman ~~expenses~~of ~~including~~the ~~related~~Board ~~party~~of ~~notes~~Directors in the amount of $910,000.

~~The~~Emerging ~~commitment~~Growth ~~amounts~~Company in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. The table does not include obligations under agreements that we can cancel without a significant penalty.Status

~~Off~~Section 102(b)(1) of the Jumpstart Our Business Startups Act (the “JOBS Act”) exempts “emerging growth companies” (as defined in Section 2(a) of the Securities Act) from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-~~Balance~~emerging ~~Sheet~~growth ~~Arrangements~~companies, but any such election to not take advantage of the extended transition period is irrevocable. Oxus was an emerging growth company and elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. Following the consummation of the Reverse Recapitalization, Borealis Foods expects to continue taking advantage of the benefits of the extended transition period, although it may decide to early adopt new or revised accounting standards to the extent permitted by such standards and relevant laws and regulations. This may make it difficult or impossible to compare Borealis Foods’ financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

As of September 30, 2025 and December 31, 2024, we did not engage in any off-balance sheet arrangements, including the use of structured finance, special purpose entities, or variable interest entities.24

~~Warrants~~We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year in which the market value of common shares that are held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter, (ii) the last day of the fiscal year in which Borealis Foods has total annual gross revenue of $1.235 billion or more during such fiscal year (as indexed for inflation), (iii) the date on which Borealis Foods has issued more than $1 billion in non-convertible debt in the prior three-year period or (iv) December 31, 2026, which is the last day of the fiscal year following the fifth anniversary of Oxus’ initial public offering.

~~The~~Implications ~~following~~of ~~represents~~being a ~~summary~~Smaller ofReporting ~~warrants outstanding and exercisable on September 30, 2025 and December 31, 2024:~~Company

Description	Issue Date	Classification Exercise	Price		Expiration Date	Outstanding Shares		Exercisable Shares
Private Placement Warrants	9/13/2021	Equity	$	11.50	2/7/2029		9,300,000		9,300,000
Public Warrants	9/13/2021	Equity	$	11.50	2/7/2029		17,250,000		17,250,000
							26,550,000		26,550,000

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of common shares held by non-affiliates exceeds $250 million as of the end of that year’s second fiscal quarter, or (ii) our annual revenues exceeded $100 million during such completed fiscal year and the market value of common shares held by non-affiliates equals or exceeds $700 million as of the end of that year’s second fiscal quarter. To the extent we take advantage of such reduced disclosure obligations, we may also make comparison of our financial statements with other public companies difficult or impossible.

~~Following~~How ~~the~~We ~~closing~~Evaluate ofOur the Reverse Recapitalization, Borealis Foods 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 gives proper notice of such redemption and provided certain other conditions are met.Operations

24Net Income/(Loss)

~~The~~We ~~public~~measure ~~warrants~~performance ~~are~~based ~~identical~~on toour ~~the~~overall ~~private~~return ~~placement~~to ~~warrants~~shareholders inbased ~~material~~on ~~terms~~consolidated ~~and~~net ~~provisions~~income ~~due~~or tonet ~~the~~loss. ~~expiration~~We ondo ~~the~~not ~~transfer~~review a measure of, ~~the~~operating ~~private~~result ~~placement~~at ~~warrants~~a 30lower ~~days~~level ~~after~~ than the consolidated ~~completion~~company ofand ~~the~~we ~~Reverse~~only ~~Recapitalization~~have one reportable segment.

~~Emerging~~Adjusted ~~Growth Company Status~~EBITDA

~~Section 102(b)(1) of the Jumpstart~~ Our ~~Business Startups~~adjustments ~~Act (the “JOBS Act”) exempts “emerging growth companies” (as defined in Section 2(a) of the Securities Act) from being required~~ to ~~comply~~EBITDA ~~with new or revised financial accounting standards until private companies~~ are ~~required~~related to ~~comply with~~expenses ~~the~~and ~~new~~gains orthat ~~revised~~we ~~financial~~believe ~~accounting~~are ~~standards.~~not ~~The~~indicative ~~JOBS~~of ~~Act~~normal, ~~provides~~ongoing ~~that~~operations. aWhile ~~company~~these ~~can~~items ~~choose~~may ~~not~~be torecurring ~~take~~in ~~advantage~~nature ofand ~~the~~should ~~extended~~not ~~transition~~be ~~period~~disregarded ~~and~~in ~~comply~~evaluation ~~with~~of ~~the~~our ~~requirements~~earnings ~~that apply to non-emerging growth companies~~performance, ~~but~~it ~~any~~is ~~such~~useful ~~election~~ to ~~not~~exclude ~~take~~such ~~advantage of~~items ~~the~~when ~~extended~~analyzing ~~transition~~current ~~period~~results isand ~~irrevocable.~~trends as ~~Oxus~~these ~~was~~items ancan ~~emerging~~vary ~~growth~~significantly ~~company~~from ~~and~~period ~~elected~~ to ~~take~~period ~~advantage~~depending ofon ~~the~~specific ~~benefits~~underlying ~~of the~~transactions ~~extended transition period for new~~ or ~~revised~~events ~~financial~~that ~~accounting~~may ~~standards~~occur. ~~Following the consummation of the Reverse Recapitalization~~Therefore, ~~Borealis~~while ~~Foods~~we ~~expects to continue taking advantage of the benefits of the extended transition period, although it~~ may ~~decide~~incur ~~to early adopt new~~ or ~~revised~~recognize ~~accounting~~these ~~standards~~types toof ~~the~~expenses ~~extent permitted by such standards~~ and ~~relevant~~gains ~~laws~~in ~~and~~the ~~regulations.~~future, ~~This~~we ~~may~~believe ~~make~~that ~~it difficult~~removing orthese ~~impossible~~items tofor ~~compare~~purposes ~~Borealis Foods’ financial results with the financial results~~ of ~~another public company that is~~ ~~either~~calculating ~~not~~the anAdjusted ~~emerging~~EBITDA ~~growth~~financial ~~company~~measures orprovides isa anmore ~~emerging~~focused ~~growth~~presentation ~~company that has chosen not to take advantage~~ of ~~the~~our ~~extended~~ongoing ~~transition period~~operating ~~exemptions because of the potential differences in accounting standards used~~performance.

We ~~will~~view ~~remain~~EBITDA as an ~~emerging~~important ~~growth~~indicator ~~company~~of ~~until~~performance. ~~the~~We ~~earliest~~define ofEBITDA as net income/(iloss) ~~the~~plus ~~last~~net ~~day~~interest ofexpense, ~~the~~income ~~fiscal~~taxes, ~~year~~depreciation, inand ~~which~~amortization. ~~the~~We ~~market~~define ~~value~~Adjusted ofEBITDA as ~~common~~EBITDA ~~shares~~further ~~that~~adjusted ~~are~~for ~~held~~any byforeign exchange gains/(losses), share-based compensation expense and non-~~affiliates~~recurring ~~equals~~items if identified. orEBITDA ~~exceeds~~and ~~$700~~Adjusted ~~million~~EBITDA asare ofsupplemental ~~the~~measures ~~end~~utilized by our management and other users of ~~that~~our ~~year’s~~financial ~~second~~statements ~~fiscal~~such ~~quarter~~as investors, research ~~(ii)~~analysts and others, to assess the ~~last~~financial ~~day~~performance of ~~the~~our ~~fiscal~~assets ~~year~~without inregard ~~which~~to ~~Borealis~~financing methods, capital structure ~~Foods~~or ~~has~~historical ~~total~~cost ~~annual~~basis. ~~gross~~Adjusted ~~revenue~~EBITDA ofis $1a key performance measure that our management uses to assess the Company’s operating performance.~~235~~ ~~billion~~We orfacilitate internal comparisons of our operating performance on a more ~~during~~consistent ~~such~~basis. ~~fiscal~~We ~~year~~use ~~(as~~these ~~indexed~~performance measures for ~~inflation),~~business ~~(iii)~~planning ~~the~~purposes ~~date~~and onforecasting. ~~which Borealis~~We ~~Foods~~believe ~~has~~that ~~issued~~EBITDA ~~more~~and ~~than~~Adjusted $1EBITDA ~~billion~~enhances inan ~~non-convertible~~investor’s ~~debt~~understanding of inour ~~the~~financial ~~prior~~performance ~~three-year~~as ~~period~~they orare ~~(iv)~~useful ~~December~~in ~~31,~~assessing ~~2026,~~our ~~which is~~operating ~~the~~performance ~~last~~from ~~day~~period-to-period ofby ~~the~~excluding ~~fiscal~~certain ~~year~~items that ~~following~~we ~~the~~believe ~~fifth~~are ~~anniversary~~not representative of ~~Oxus’~~our ~~initial~~core ~~public offering~~business.

~~Implications~~For the three months ended March 31, 2026, “Adjusted EBITDA,” a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, (2) depreciation and amortization, of ~~being~~$0.39 million, (3) interest expense, of $1.45 million, (4) new product launch of $0.46 million, (5) training, of $0.13 million, (6) deferred stock compensation $0.04 million, (7) professional fees, of $0.42 million, and (8) business development and other extraordinary charges, of $0.44 million. For the three months ended March 31, 2025, “Adjusted EBITDA,” a ~~Smaller~~non-GAAP ~~Reporting~~measure, ~~Company~~is defined as net loss attributable to us before (1) income taxes, (2) depreciation and amortization, of $0.48 million, (3) interest expense, of $1.26 million, (4) new product launch of $0.57 million, (5) training, of $0.20 million, (6) deferred stock compensation $0.04 million, (7) business professional fees, of $0.48 million, and (8) business development and other extraordinary charges, of $0.61 million. Management and our Board of Directors use this non-GAAP measure for purposes of evaluating our performance. Furthermore, the Compensation Committee of our Board of Directors uses such measure to evaluate management’s performance. We, therefore, believe that the use of this non-GAAP measure provides useful information to investors and other stakeholders by allowing them to view our business through the eyes of management and our Board of Directors, facilitating comparisons of results across historical periods and focus on the underlying ongoing operating performance of our business. As noted above, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.

~~How~~Recent WeAccounting ~~Evaluate Our Operations~~Pronouncements

~~Net~~See ~~Income/(Loss)~~Note 1 to Borealis Foods’ unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for information about recent accounting pronouncements, the timing of their adoption, and Borealis Foods’ assessment, if any, of their potential impact on Borealis Foods’ financial condition and results of operations.

WeItem ~~measure performance based on our overall return to shareholders based on consolidated net income or net loss~~3. WeQuantitative doand ~~not~~Qualitative ~~review a measure of operating result at a lower level than the~~Disclosures ~~consolidated~~About ~~company~~Market ~~and we only have one reportable segment~~Risk.

~~Adjusted~~We ~~EBITDA~~are exposed to market risk in the ordinary course of our business. Market Risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in foreign currency exchange rates.

~~Our~~Concentration adjustments to EBITDA are related to expenses and gains that we believe are not indicative of normal, ongoing operations. While these items may be recurring in nature and should not be disregarded in evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends as these items can vary significantly from period to period depending on specific underlying transactions or events that may occur. Therefore, while we may incur or recognize these types of expenses and gains in the future, we believe that removing these items for purposes of calculating the Adjusted EBITDA financial measures provides a more focused presentation of our ongoing operating performance.Risk

25The 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 2% 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.

WeSales ~~view~~to ~~EBITDA~~three ascustomers anaccounted ~~important~~for ~~indicator~~approximately of58% ~~performance.~~and sales Weto ~~define~~four ~~EBITDA~~customers asaccounted ~~net~~for ~~income/(loss)~~approximately ~~plus~~60% of net ~~interest~~revenues ~~expense,~~for ~~income~~three ~~taxes,~~month ~~depreciation,~~periods ~~and~~ended ~~amortization.~~March ~~We define Adjusted EBITDA as EBITDA further adjusted for any foreign exchange gains/(losses)~~31, ~~share-based~~2026 ~~compensation expense~~ and ~~non-recurring~~2025, ~~items if identified~~respectively. ~~EBITDA~~Accounts ~~and~~receivable ~~Adjusted~~from ~~EBITDA~~two ~~are~~customers ~~supplemental~~amounted ~~measures~~to ~~utilized~~approximately by31% ~~our management~~ and ~~other~~accounts ~~users~~receivable offrom ~~our~~three ~~financial~~customers ~~statements~~amounted ~~such~~to ~~as investors,~~approximately ~~research~~51% ~~analysts~~of ~~and~~total ~~others,~~accounts toreceivable ~~assess~~as ~~the financial performance~~ of ~~our~~March ~~assets~~31, ~~without~~2026 ~~regard~~and toDecember ~~financing~~31, ~~methods~~2025, ~~capital structure or historical cost basis~~respectively. ~~Adjusted~~The ~~EBITDA~~Company’s issales afor ~~key performance measure that our management uses to assess~~ the ~~Company’s~~periods ~~operating~~presented ~~performance.~~were Wegenerated ~~facilitate~~primarily ~~internal~~in ~~comparisons~~the ofUnited ~~our~~States, ~~operating~~with ~~performance~~the onbalance agenerated ~~more~~in ~~consistent~~international ~~basis.~~markets Weincluding ~~use~~Canada, ~~these~~Central ~~performance measures~~America, ~~for~~South ~~business~~America, ~~planning purposes~~ and ~~forecasting~~Europe. WeSee ~~believe~~Note ~~that~~10 ~~EBITDA~~for ~~and~~revenue ~~Adjusted~~disaggregated ~~EBITDA enhances an investor’s understanding of our financial performance as they are useful in assessing our operating performance from period-to-period~~ by ~~excluding~~geographic ~~certain items that we believe are not representative of our core business~~region.

~~For~~Purchases ~~the~~from ~~nine~~10 ~~months~~vendors ~~ended~~accounted ~~September~~for ~~30, 2025, “Adjusted EBITDA,”~~approximately 46% ~~a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, (2) depreciation~~ and 46% ~~amortization,~~ of ~~$1.4~~purchases ~~million, (3)~~during interest expense, of $4.4 million, (4) new product launch of $1.8 million, (5) training, of $0.6 million, (6) deferred stock compensation $0.3 million, (7) professional fees, of $0.4 million, and (8) business development and other extraordinary charges, of $1.6 million. For the three months ended ~~September~~March 3031, ~~2025,~~2026 ~~“Adjusted EBITDA,” a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, (2) depreciation~~ and ~~amortization~~2025, ~~of $0~~respectively.5 ~~million,~~Accounts ~~(3)~~payable ~~interest~~to ~~expense,~~these ofvendors ~~$1.9 million, (4) new product launch~~totaled ofapproximately $~~0.6 million~~1, ~~(5) training~~501,000 ~~of $0.3 million, (6) deferred stock compensation $0.0 million, (7) business professional fees, of $0.4 million,~~ and ~~(8) business development and other extraordinary charges, of~~ $~~0.5 million. Management and our Board of Directors use this non-GAAP measure for purposes of evaluating our performance. Furthermore~~2, ~~the Compensation Committee of our Board of Directors uses such measure to evaluate management’s performance. We~~678,000 as ~~therefore, believe that the use~~ of ~~this~~March ~~non-GAAP measure provides useful information to investors and other stakeholders by allowing them to view our business through the eyes of management and our Board of Directors~~31, ~~facilitating comparisons~~2026 ~~of results across historical periods~~ and ~~focus on the underlying ongoing operating performance of our business. As noted above~~2025, ~~Adjusted~~ ~~EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U~~respectively.~~S. GAAP.~~

~~For~~Foreign ~~the~~Currency nine months ended September 30, 2024, “Adjusted EBITDA,” a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, of $0.0, (2) interest expense, of $3.8 million, (3) depreciation and amortization, of $1.9 million, (4) training, of $1.4 million, (5) business transaction costs, of $1.8 million, (6) new product launch of $5.1 million, (7) one time formulation and product development costs, of $2.5 million, and (8) deferred stock compensation $1.3 million. For the three months ended September 30, 2024, “Adjusted EBITDA," a non-GAAP measure, is defined as net loss attributable to us before (1) income taxes, (2) interest expense, of $1.2 million, (3) depreciation and amortization, of $0.5 million (4) other non-operating items, (5) training, of $0.5 million, (6) business transaction costs, of $0.3 million, (7) new product launch, of $1.1 million, (8) one-time formulation and product development costs, of $1.3 million. Management and our Board of Directors use this non-GAAP measure for purposes of evaluating our performance. Furthermore, the Compensation Committee of our Board of Directors uses such measure to evaluate management’s performance. We, therefore, believe that the use of this non-GAAP measure provides useful information to investors and other stakeholders by allowing them to view our business through the eyes of management and our Board of Directors, facilitating comparisons of results across historical periods and focus on the underlying ongoing operating performance of our business. As noted above, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP.Risk

~~Recent~~Our ~~Accounting~~customers ~~Pronouncements~~are primarily located in the United States, Central America, South America, Europe, and Canada; therefore, foreign exchange risk exposures arise from transactions denominated in currencies other than our functional and reporting currency (U.S. dollars). To date, a majority of our sales have been denominated in U.S. dollars and a significant portion of our operating expenses are denominated in Canadian dollars. We also purchase certain of our key manufacturing inputs in Euros. As we expand our presence in international markets, our results of operations and cash flows may increasingly be subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign currency exchange rates. To date, we have not entered into any hedging arrangements to minimize the impact of these fluctuations in the exchange rates. We will periodically reassess our approach to manage our risk relating to fluctuations in currency rates.

~~See~~We ~~Note~~do 1not tobelieve ~~Borealis~~that ~~Foods’~~foreign ~~unaudited condensed~~currency ~~consolidated~~risk ~~financial~~had a ~~statements~~material ~~included~~effect ~~elsewhere~~on inour ~~this Quarterly Report for information about recent accounting pronouncements~~business, ~~the~~ ~~timing~~financial ~~of their adoption~~condition, ~~and~~or ~~Borealis~~results ~~Foods’ assessment, if any,~~ of ~~their~~operations ~~potential~~during ~~impact~~the onperiods ~~Borealis Foods’ financial condition and results of operations~~presented.

~~Item 3. Quantitative and Qualitative Disclosures About Market Risk.~~26

WeInflation ~~are exposed to market risk in the ordinary course of our business. Market~~ Risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in foreign currency exchange rates.

~~Concentration~~We ~~Risk~~do not believe that inflation had a significant impact on our results of operations for any periods presented in our unaudited condensed consolidated financial statements. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs with product price increases, and our inability or failure to do so could harm our business, financial condition, and results of operations.

~~The~~Matching ~~Company~~Revenues ~~extends unsecured credit to its customers in the ordinary course of business. Payment terms are generally net 30 days~~ with discounts amounting up to 2% 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.Costs

26Certain Selling, General and Administrative costs have been expensed in the period incurred. These costs, include business development costs, transaction costs and research and development costs, consist primarily of personnel and related expenses including salaries, benefits, share-based compensation, scale-up expenses, depreciation and amortization expenses, and facility lease costs. Scale-up expenses includes material waste costs, production personnel costs and various related expenses. These costs are focused on enhancements to our existing product formulations and production processes, as well as the scientific development of new products and economic verticals. We believe continued innovation and these new verticals are expected to capture a larger share of consumers. Monetization of future opportunities created by the above investment are expected to be realized in future quarters.

~~Sales~~Item ~~to three customers accounted for approximately 38% and sales to four customers accounted for approximately 53% of net revenues for three month periods ended September 30, 2025 and 2024, respectively~~4. ~~Sales~~Controls ~~to three customers accounted for approximately 44%~~ and 45% of net revenues for the nine month periods ended September 30, 2025 and 2024, respectively. Accounts receivable from one customer amounted to approximately 17% and three customers amounted to 37% of total accounts receivable as of September 30, 2025 and December 31, 2024, respectively. Substantially all of the Company’s sales for the three and nine month periods ended September 30, 2025 and 2024 occurred in the United States, Canada, Central America, South America, and Europe.Procedures

~~Purchases~~Limitations ~~from~~on 10Effectiveness ~~vendors accounted for approximately 62% and 51%~~ of ~~purchases~~Controls ~~during the three months ended~~ and ~~57% and 54% of purchases for the nine month periods ended September 30,~~ ~~2025 and 2024, respectively. Accounts payable to these vendors totaled approximately $2,048,000 and $2,570,000 as of September 30, 2025 and 2024, respectively.~~Procedures

~~Foreign~~In ~~Currency~~designing ~~Risk~~and evaluating our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), 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. We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

~~Our~~Evaluation customers are primarily located in the United States, Central America, South America, Europe, and Canada; therefore, foreign exchange risk exposures arise from transactions denominated in currencies other than our functional and reporting currency (U.S. dollars). To date, a majority of ~~our~~Disclosure ~~sales~~Controls ~~have been denominated in U.S. dollars~~ and a significant portion of our operating expenses are denominated in Canadian dollars. We also purchase certain of our key manufacturing inputs in Euros. As we expand our presence in international markets, our results of operations and cash flows may increasingly be subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign currency exchange rates. To date, we have not entered into any hedging arrangements to minimize the impact of these fluctuations in the exchange rates. We will periodically reassess our approach to manage our risk relating to fluctuations in currency rates.Procedures

WeUnder dothe ~~not~~supervision ~~believe~~and ~~that~~with ~~foreign~~the ~~currency~~participation of ~~risk~~our ~~had~~management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure acontrols ~~material~~and ~~effect~~procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. Based on that evaluation, our ~~business~~Chief Executive Officer and Chief Financial Officer concluded that, ~~financial~~as ~~condition~~of March 31, or2026, ~~results~~our ofdisclosure ~~operations~~controls ~~during~~and procedures were not effective at the ~~periods~~reasonable ~~presented~~assurance level, as a result of the material weaknesses in internal control over financial reporting described below.

~~Inflation~~Evaluation ~~Risk~~of Internal Control over Financial Reporting

WeManagement dois ~~not~~responsible ~~believe~~for ~~that~~establishing ~~inflation had a~~and ~~significant~~maintaining ~~impact~~adequate oninternal ~~our~~control ~~results~~over offinancial ~~operations~~reporting ~~for~~as ~~any~~defined ~~periods presented~~ in ~~our~~Rule ~~unaudited~~13a-15(f) ~~condensed~~of ~~consolidated~~the ~~financial statements~~Exchange Act. ~~Nonetheless,~~Our ifinternal ~~our~~control over ~~costs~~financial ~~were~~reporting tois ~~become~~a ~~subject~~process designed to ~~significant~~provide ~~inflationary~~reasonable ~~pressures,~~assurance weregarding ~~may~~the ~~not~~reliability beof ~~able~~our tofinancial ~~fully~~reporting and ~~offset~~the ~~such~~preparation ~~higher~~of ~~costs with product price increases, and~~ our ~~inability~~unaudited orcondensed ~~failure~~consolidated tofinancial dostatements sofor ~~could~~external ~~harm~~purposes ~~our~~in ~~business,~~accordance ~~financial condition,~~with ~~and~~U.S. ~~results of operations~~GAAP.

~~Matching Revenues with Costs~~27

~~Certain~~Internal ~~Selling~~control systems, ~~General~~no ~~and~~matter ~~Administrative~~how ~~costs~~well designed, have ~~been~~inherent ~~expensed~~limitations, inincluding the ~~period~~possibility ~~incurred~~of human error or overriding of controls. ~~These~~Because ~~costs~~of the inherent limitations, ~~include~~only reasonable ~~business~~assurance ~~development~~with ~~costs,~~respect ~~transaction~~to ~~costs~~financial statement preparation and ~~research~~presentation can be provided and ~~development~~misstatements may not be prevented ~~costs,~~or ~~consist~~detected. ~~primarily~~Management ofevaluated ~~personnel~~the design and ~~related~~effectiveness ~~expenses~~of ~~including~~the ~~salaries,~~Company’s ~~benefits,~~internal ~~share-based~~control ~~compensation,~~over ~~scale-up~~financial ~~expenses, depreciation~~reporting ~~and~~as ~~amortization~~of March ~~expenses~~31, ~~and~~2026 ~~facility~~using ~~lease~~the ~~costs.~~criteria ~~Scale-up~~set ~~expenses~~forth ~~includes~~by ~~material~~the ~~waste~~Committee ~~costs,~~of ~~production~~Sponsoring ~~personnel costs~~Organizations ~~and~~of ~~various~~the ~~related~~Treadway ~~expenses.~~Commission ~~These~~in ~~costs~~Internal ~~are~~Control Integrated ~~focused~~Framework 2013. Based on ~~enhancements~~its toevaluation, management concluded that our ~~existing~~internal ~~product~~control ~~formulations~~over ~~and~~financial ~~production~~reporting ~~processes,~~was not effective as ~~well~~of asMarch ~~the~~31, ~~scientific~~2026 ~~development~~due ofto ~~new~~material ~~products~~weaknesses ~~and~~in ~~economic~~our ~~verticals.~~internal Wecontrol ~~believe~~over ~~continued~~financial ~~innovation~~reporting. ~~and~~A ~~these~~material ~~new~~weakness ~~verticals~~is a deficiency, ~~are~~or ~~expected~~combination toof ~~capture~~deficiencies, ain ~~larger~~internal ~~share~~control ofover ~~consumers.~~financial ~~Monetization~~reporting ofsuch ~~future~~that ~~opportunities~~there ~~created~~is bya ~~the~~reasonable ~~above~~possibility ~~investment~~that ~~are~~a ~~expected~~material tomisstatement of annual or interim financial statements will not be ~~realized~~prevented inor ~~future~~detected ~~quarters~~on a timely basis.

~~Item~~Consistent 4.with ~~Controls~~the material weaknesses identified as of December 31, 2025 and ~~Procedures~~disclosed in our Annual Report on Form 10-K, management concluded that the following material weaknesses continued to exist as of March 31, 2026: (i) the Company had insufficient accounting and financial reporting resources and lacked appropriate segregation of duties within its financial reporting process; and (ii) the Company did not maintain effective controls over the identification, authorization, and disclosure of related-party transactions and over monitoring of compliance with debt covenants. As a result of these material weaknesses, management concluded that the Company’s internal control over financial reporting was not effective as of March 31, 2026.

~~Limitations~~As ona ~~Effectiveness~~result of ~~Controls~~these deficiencies, material misstatements were identified and corrected in the consolidated financial statements as of and for the year ended December 31, 2025. Because there is ~~Procedures~~a reasonable possibility that material misstatements of the consolidated financial statements will not be prevented or detected on a timely basis, we concluded the deficiencies represent material weaknesses in our internal control over financial reporting and our internal controls over financial reporting was not effective as of March 31, 2026. However, we have been in the process of remediating the internal control integrated framework in order to address this weakness.

InOur ~~designing~~Chief ~~and~~Executive ~~evaluating~~Officer ~~our~~and ~~disclosure~~Chief ~~controls~~Financial ~~and~~Officer ~~procedures~~have ~~(as~~taken ~~defined~~additional insteps ~~Rules~~to ~~13a-15(e)~~support ~~and 15d-15(e) under the Exchange Act), management recognizes~~ that ~~any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving~~ the ~~desired~~unaudited ~~control~~condensed ~~objectives.~~consolidated Wefinancial dostatements ~~not expect~~for that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the ~~objectives~~period ofended ~~the disclosure~~March ~~controls and procedures are met. Further~~31, ~~the~~2026 ~~design of disclosure controls and procedures must reflect the fact that there~~ are ~~resource constraints,~~presented ~~and~~fairly ~~the benefits must be considered relative to their costs. Because of the inherent limitations~~ in ~~all~~accordance ~~disclosure~~with ~~controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any~~U.S. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditionsGAAP.

27Changes in Internal Control over Financial Reporting

~~Evaluation~~There ofwere ~~Disclosure~~no ~~Controls~~changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a–15(f) and ~~Procedures~~15d-15(f)) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our unaudited condensed consolidated financial statements for external purposes in accordance with U.S. GAAP.28

~~Internal~~PART ~~control~~II ~~systems,~~– noOTHER matter how well designed, have inherent limitations, including the possibility of human error or overriding of controls. Because of the inherent limitations, only reasonable assurance with respect to financial statement preparation and presentation can be provided and misstatements may not be prevented or detected. Management evaluated the design and effectiveness of the Company’s internal control over financial reporting as of September 30, 2025 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control Integrated Framework 2013. Based on its evaluation, management concluded that our internal control over financial reporting was not effective as of September 30, 2025 due to material weaknesses in our 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 annual or interim financial statements will not be prevented or detected on a timely basis.INFORMATION

~~Consistent~~Item ~~with~~1. ~~December~~Legal ~~31, 2024, the Company did not effectively design, implement and operate effective process-level control activities related to inventory management.~~Proceedings

AsWe aare ~~result~~not ofcurrently ~~these~~a ~~deficiencies,~~party ~~material~~to ~~misstatements~~any litigation ~~were~~or ~~identified~~claims ~~and~~that, ~~corrected~~if indetermined ~~the~~adversely ~~consolidated~~against ~~financial statements as of and for the year ended December 31~~us, ~~2024.~~would ~~Because~~have ~~there is~~ a ~~reasonable~~material ~~possibility~~adverse ~~that~~effect ~~material~~on ~~misstatements~~our ofbusiness ~~the~~operating ~~consolidated~~results, financial condition, ~~statements will not be prevented~~ or ~~detected~~cash onflows. aWe ~~timely basis~~may, wefrom ~~concluded~~time ~~the~~to ~~deficiencies~~time, ~~represent~~be ~~material~~party ~~weaknesses~~to inlitigation ~~our~~and ~~internal~~subject ~~control~~to ~~over~~claims ~~financial~~in ~~reporting~~the ~~and~~ordinary ~~our~~course ~~internal~~of ~~controls~~business. ~~over~~Regardless ~~financial reporting was not effective as~~ of ~~September~~the 30outcome, ~~2025.~~litigation ~~However,~~can we have ~~been~~an inadverse ~~the~~impact ~~process~~on ofus ~~remediating~~because of the ~~internal control~~defense ~~integrated~~and ~~framework~~settlement incosts, ~~order~~diversion toof ~~address~~management resources, ~~this~~and ~~weakness~~other factors.

~~Our~~Item Chief Executive Officer and Chief Financial Officer have taken additional steps to support that the unaudited condensed consolidated financial statements for the period ended September 30, 2025 are presented fairly in accordance with U1A.S. ~~GAAP.~~Risk Factors

~~Changes~~Our inrisk ~~Internal~~factors ~~Control~~are ~~over~~disclosed ~~Financial~~in Part I, Item ~~Reporting~~1A of our Annual Report on Form 10-K, filed with the SEC on June 2, 2026.

~~There~~The ~~were~~risk factors set forth below update and supplement the risk factors disclosed in the Annual Report. Except as set forth below, there have been no material changes from the risk factors disclosed in ~~our~~the ~~internal~~Annual ~~control~~Report. The risk factors disclosed in the Annual Report, together with the updated and supplemental risk factors ~~over~~set ~~financial~~forth ~~reporting~~below, ~~(as~~should ~~such~~be ~~term~~carefully isconsidered, ~~defined~~together with the other information in ~~Exchange~~this ~~Act~~Quarterly ~~Rule~~Report ~~13a–15(f)~~and our other filings with the SEC, in evaluating the Company and ~~15d-15(f))~~our ~~during~~Common Shares and Warrants. The risks described in the ~~most~~Annual ~~recent~~Report ~~fiscal~~and ~~quarter~~below are not the ~~that~~only ~~have~~risks ~~materially~~we ~~affected,~~face. Additional risks and uncertainties not currently known to us or ~~are~~that ~~reasonably~~we ~~likely~~currently deem to be immaterial may also materially and adversely affect, our ~~internal~~business, ~~control~~financial ~~over~~condition, ~~financial~~or ~~reporting~~results of operations.

~~Remediation~~Approximately ~~Plan~~$33.3 million of related-party indebtedness is subject to contractual automatic conversion into Common Shares on or after July 1, 2026, and any such conversion will result in substantial dilution to existing shareholders.

~~Subsequent~~On toApril ~~the~~27, ~~year~~2026, ~~ended~~in ~~December~~connection ~~31,~~with ~~2024,~~the Oxus Credit ~~and~~Agreement, ~~under~~we ~~the~~entered ~~direction~~into ofa Conversion Agreement with Oxus Capital PTE Ltd. (“Oxus Capital”), our Chief Executive Officer Reza Soltanzadeh, and ~~Chief~~our ~~Financial~~Non-Executive ~~Officer,~~Chairman weBarthelemy ~~have~~Helg ~~been~~(together, ~~developing~~the “Shareholders”), and ~~implementing~~ a ~~comprehensive~~Subscription Agreement ~~plan~~with toOxus ~~remediate~~Capital. ~~the~~Pursuant ~~identified~~to ~~material~~the ~~weaknesses.~~Subscription WeAgreement, ~~began~~we ~~implementing~~are ~~certain~~obligated ~~measures~~to asuse ~~part~~commercially ofreasonable ~~the~~efforts ~~remediation~~to ~~plan~~consummate ~~including:~~one or ~~(i)~~more ~~development~~equity financings resulting in aggregate gross proceeds of aat ~~detailed~~least ~~plan~~$70.0 ~~addressing~~million ~~the~~at ~~material~~a ~~weaknesses~~price ~~related~~of tonot ~~the~~less ~~control~~than ~~environment,~~$9.00 ~~risk~~per ~~assessment~~share ~~and~~on or ~~monitoring~~before July 1, 2026 (iithe “Equity Financing Condition”). ~~institution~~If ofthe ~~policies~~Equity ~~and~~Financing ~~processes~~Condition tois ~~support~~not satisfied, the ~~functioning~~Conversion Agreement ofprovides ~~internal~~for ~~controls~~the ~~over~~automatic ~~financial~~conversion ~~reporting,~~of ~~(iii)~~approximately ~~design~~$29.1 ~~and implementation~~million of aindebtedness ~~comprehensive~~previously ~~risk~~advanced ~~assessment~~by ~~process~~the Shareholders to the Company, ~~(iv)~~plus ~~installation~~approximately of$4.3 ~~new~~million ~~ERP~~of ~~system~~accrued interest (v)calculated ~~hiring/outsourcing~~through ofJune ~~individuals~~30, ~~with appropriate~~2026), ~~skills~~into ~~and~~Common ~~experience~~Shares.

~~The~~We ~~material~~do ~~weaknesses~~not ~~being~~currently ~~addressed~~have byany commitments for the equity financing contemplated by the Subscription Agreement, and the $9.00 per share threshold is substantially above~~-mentioned~~ ~~remediation~~recent ~~plan~~trading prices of our Common Shares. As a result, we expect that the Equity Financing Condition will not be ~~considered~~satisfied ~~remediated~~by ~~until~~July 1, 2026, and that the ~~applicable~~conversion contemplated ~~controls~~by ~~operate~~the ~~for~~Conversion aAgreement ~~sufficient~~will ~~period~~be triggered. The number of ~~time,~~Common Shares issuable upon conversion will depend on the conversion ~~and~~price ~~management~~determined ~~concludes,~~under ~~through~~the ~~testing~~Conversion Agreement, ~~that~~and ~~these~~the ~~controls~~conversion ~~are~~price ~~operating~~is ~~effectively~~expected to be substantially below the $9.00 ~~This~~per ~~has~~share ~~not~~threshold contemplated ~~occurred~~by the Subscription Agreement. Accordingly, if and when the conversion is effected, the conversion will result in substantial dilution to ~~date~~our existing shareholders and a significant further increase in the beneficial ownership and voting power of Oxus Capital and its affiliates, who are already our controlling shareholder group.

~~Although~~As wedescribed ~~have~~in ~~commenced~~ the ~~remediation~~following ~~process~~risk factor, the ~~and~~issuance ~~intend~~of toCommon ~~complete~~Shares itupon asthe ~~promptly~~conversion ascontemplated ~~possible,~~by wethe ~~cannot~~Conversion ~~estimate~~Agreement ~~how~~is ~~long~~expected itto ~~will~~require ~~take~~shareholder toapproval ~~remediate~~under Nasdaq ~~these~~Listing ~~material~~Rules ~~weaknesses~~5635(b) and potentially 5635(d). ~~In addition,~~The ~~new~~Conversion ~~material~~Agreement ~~weaknesses~~contains ~~may~~a be“Required ~~discovered~~Approvals” provision that defers ~~require~~the ~~additional~~conversion ~~time~~ and ~~resources~~correspondingly toextends ~~remediate.~~the ~~Until~~maturity of the ~~remediation~~related isindebtedness until such shareholder approvals are obtained. ~~complete~~The interaction between the July 1, we2026 ~~plan~~contractual toconversion ~~continue~~trigger toand ~~perform~~the ~~additional~~Nasdaq-driven ~~analyses~~deferral creates a continuing overhang on our Common Shares, the duration and ~~other~~ultimate ~~procedures~~resolution toof ~~ensure~~which ~~that~~depends on factors outside our ~~unaudited~~control, ~~condensed~~including ~~consolidated~~the timing of any shareholder ~~financial~~meeting ~~statements~~we are ~~prepared~~able into ~~accordance~~convene ~~with~~and ~~U.S.~~the ~~GAAP~~outcome of the shareholder vote.

28Issuances of Common Shares upon conversion of related-party indebtedness require shareholder approval under Nasdaq Listing Rules 5635(b) and 5635(d), which approval has not been obtained and was not sought at our June 29, 2026 annual meeting of shareholders.

~~PART~~The IIissuance –of ~~OTHER~~Common ~~INFORMATION~~Shares upon (i) the conversion of approximately $29.1 million of related-party indebtedness (plus approximately $4.3 million of accrued interest as of June 30, 2026) under the Conversion Agreement and (ii) the conversion of the $3.0 million convertible promissory note issued to Oxus Capital on May 29, 2026 described in Note 11 (collectively, the “Required Issuances”) is expected to require the prior approval of our shareholders under Nasdaq Listing Rule 5635(b) (change of control) and potentially Nasdaq Listing Rule 5635(d) (issuance of 20% or more of the outstanding Common Shares at a price less than the Nasdaq minimum price).

~~Item~~The 1Required Issuances were not submitted to a vote of our shareholders at our June 29, 2026 annual meeting of shareholders. ~~Legal~~The ~~Proceedings~~Conversion Agreement and the Note each defer the applicable conversion and extend the applicable maturity until the required shareholder approvals are obtained. We intend to convene a special meeting of shareholders, or to include the required proposals at our next annual meeting of shareholders, to seek the required approvals.

We are not currently a party to any litigation or claims that, if determined adversely against us, would have a material adverse effect on our business operating results, financial condition, or cash flows. We may, from time to time, be party to litigation and subject to claims in the ordinary course of business. Regardless of the outcome, litigation can have an adverse impact on us because of the defense and settlement costs, diversion of management resources, and other factors.29

~~Item~~We 1Acannot assure you that we will obtain the required shareholder approvals on a timely basis or at all. ~~Risk~~Under ~~Factors~~Nasdaq’s voting requirements applicable to issuances under Listing Rule 5635, the shares to be issued in the transactions, and shares held by Oxus Capital and its affiliates as interested parties, may be subject to limitations on voting on the related proposals. If we fail to obtain the required shareholder approvals, the conversion contemplated by the Conversion Agreement will continue to be deferred, the related indebtedness will remain outstanding (subject to the corresponding maturity extensions and continuing accrual of interest at the contractual rates), and the overhang created by the Conversion Agreement will continue to weigh on the trading price of our Common Shares. In addition, if we are required to restructure or amend the Conversion Agreement or the Oxus Credit Agreement in order to address the deferral or to obtain shareholder approval, any such restructuring or amendment could be on terms less favorable to us and our non-affiliated shareholders than the existing terms. Failure to obtain the required approvals could also adversely affect our continued listing on the Nasdaq Capital Market.

~~Our~~Substantial ~~risk~~doubt ~~factors~~about ~~are~~our ~~disclosed~~ability into ~~Part I, Item~~continue 1Aas ofa ~~our~~going ~~Annual~~concern ~~Report~~has onnot ~~Form 10-K, filed with the SEC on April 15, 2025. There have~~ been ~~no material changes during the nine months ended September 30, 2025 from or updates to the risk factors discussed in Part I, Item 1A, Risk Factors, of our Annual Report, except as set forth below~~alleviated.

~~The~~As ~~risk~~disclosed ~~factor~~in ~~titled~~the ~~“Our~~Annual ~~potential insolvency~~Report, ~~inability~~our toindependent registered ~~pay~~public ~~our~~accounting ~~debt~~firm orhas ~~bankruptcy~~expressed ~~would~~substantial ~~have~~doubt about our ability to continue as a ~~material~~going ~~adverse~~concern. ~~effect~~Notwithstanding onthe refinancing ~~our~~of ~~business,~~the ~~financial~~FrontWell ~~condition~~Capital Partners credit facility through the April 27, ~~results~~2026 Oxus Credit Agreement and the additional $3.0 ofmillion ~~operations~~provided under the May 29, ~~cash~~2026 ~~flow~~amendment thereto, ~~cash~~management ~~available~~has ~~for~~concluded ~~distribution~~under asASC ~~well~~205-40 that substantial doubt has not been alleviated, because management’s plans cannot be assessed as probable of being effectively implemented. Material conditions continue to exist, including our ~~ability~~need to ~~service~~consummate at least $70.0 million of equity financing at $9.00 per share on or before July 1, 2026 (for which we have no commitments), the conversion overhang and Nasdaq shareholder-approval requirements described above, our ~~debt~~continued reliance on demand and past-due obligations to related parties, and ~~could~~the ~~result~~fact in that our ~~inability~~total toliabilities continue asto aexceed ~~going~~our ~~concern”~~total isassets. ~~amended~~See Note ~~and~~1 ~~restated~~to asthe ~~follows:~~unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

~~Our~~Oxus ~~potential~~Capital ~~insolvency,~~and ~~inability~~its tocontrolling ~~pay our~~shareholder ~~debt or bankruptcy would have a material adverse effect on our business, financial condition, results of operations, cash flow, cash~~exercise ~~available~~significant ~~for~~influence ~~distribution~~over ~~as well as~~ our ~~ability~~Company ~~to service our debt obligations,~~ and ~~could~~may ~~result~~increase inthat ~~our~~influence ~~inability~~further toupon ~~continue~~conversion asof ~~a going~~related-party ~~concern~~indebtedness.

IfOxus weCapital, ~~were to default on~~ our ~~debt~~former ~~obligations~~SPAC sponsor, beneficially itowns, ~~would~~through ~~likely~~its ~~cause~~controlling ashareholder ~~significant~~Kenges orRakishev, ~~complete~~approximately ~~reduction~~39.09% inof ~~the~~our ~~operating~~outstanding ~~cash~~Common ~~flow~~Shares. ~~generated~~Oxus byCapital is also our ~~product~~senior ~~sales.~~secured Aslender ofunder the ~~ninemonths ended~~Oxus ~~September~~Credit 30Agreement (as amended), ~~2025~~holds ~~the~~a ~~amount~~portion weof ~~owe~~the onrelated-party ~~outstanding~~indebtedness ~~Notes~~subject ~~exceed~~to the Conversion ~~amount~~Agreement, ofand ~~cash~~is onentitled ~~hand~~to ~~and~~appoint ~~consequently,~~two ~~unless~~members weof ~~are~~our ~~able to~~Board ~~raise~~of ~~funds~~Directors, toone ~~pay~~of ~~off~~whom ~~the~~(Pavel ~~Notes,~~Mynzhanov) ~~generate~~was ~~sufficient~~appointed ~~cash~~in May to2026. ~~pay~~As ~~off~~a ~~the~~result, ~~Notes~~Oxus orCapital ~~extend~~ and ~~amend~~Mr. ~~the~~Rakishev ~~maturity~~have ~~dates~~significant ~~the~~influence ~~Company is~~over atour ~~substantial~~business, ~~risk~~strategy, ~~that~~financing, and governance, including the ~~noteholders~~ability ~~could~~to ~~assert~~influence ~~rights~~or ~~against~~determine the ~~Company.~~outcome ~~There~~of ~~can~~most bematters nosubmitted ~~assurance~~to ~~that~~our weshareholders ~~would~~for beapproval. ~~able~~If tothe conversion ~~avoid~~contemplated ~~insolvency~~by orthe toConversion ~~make~~Agreement ~~timely~~is ~~payments~~effected onfollowing ~~our~~receipt ~~debt~~of orthe ~~payments~~required toshareholder ~~our~~approvals, ~~Item~~the ~~suppliers.~~beneficial Ifownership and wevoting ~~were~~power toof ~~default,~~Oxus weCapital ~~may~~and ~~incur~~its ~~substantial costs,~~affiliates ~~that~~will ~~could~~increase ~~have~~further, potentially to a ~~severe~~level ~~adverse~~that ~~effect~~constitutes onmajority ~~our~~ownership and ~~business,~~control ~~financial~~of ~~condition,~~the ~~results~~Company. ofThe ~~operations~~interests ~~and~~of ~~cash~~Oxus ~~flow,~~Capital and weMr. ~~might take~~Rakishev ~~actions~~may todiffer ~~respond~~from tothose ~~any~~of ~~default~~our ~~including~~other ~~the~~shareholders, ~~curtailment~~and orconflicts of ~~reduction~~interest may arise in ~~operations,~~connection ~~the~~with ~~sale~~related-party oftransactions, ~~assets~~financings, ofand ~~the~~other ~~Company,~~matters orin ~~seeking protection~~which ~~from~~Oxus ~~creditors~~Capital ~~under~~has ~~bankruptcy~~a direct or ~~insolvency~~indirect ~~laws~~interest.

~~The risk factor titled “~~We ~~have~~are anot ~~limited operating~~yet ~~history~~confirmed ~~which~~as ~~makes~~compliant itwith ~~difficult~~Nasdaq Listing toRule ~~evaluate our business and prospects” is amended and restated as follows:~~5620(a).

On January 12, 2026, we received a notice from the Nasdaq Listing Qualifications Department that we were not in compliance with Nasdaq Listing Rule 5620(a), which requires listed companies to hold an annual meeting of shareholders within twelve months of the end of each fiscal year. Nasdaq granted us an extension until June 29, 2026 to regain compliance. We held our annual meeting of shareholders on June 29, 2026. We expect to receive confirmation from Nasdaq that we have regained compliance with Listing Rule 5620(a); ~~limited~~however, ~~operating~~we ~~history~~have ~~which~~not received such confirmation as of the date of this Quarterly Report. If, contrary to our ~~makes~~expectations, itNasdaq ~~difficult~~determines that we have not regained compliance, our Common Shares and Warrants could become subject to ~~evaluate~~delisting from the Nasdaq Capital Market, which would materially and adversely affect the liquidity and trading price of our ~~business~~securities, our ability to raise additional capital, and ~~prospects~~our relationships with customers, suppliers, and other counterparties.

WeItem ~~have a limited operating history, which makes it difficult to evaluate our business and prospects to forecast our future results~~2. WeUnregistered ~~were~~Sales ~~founded in 2019. Although we have experienced substantial revenue growth on an annual basis, we have incurred losses since inception. As~~ of ~~September~~Equity ~~30, 2025, we had cash-on-hand~~Securities ~~of $0.19 million~~ and aUse ~~negative working capital~~ of ~~$25.30~~Proceeds million USD. We are actively exploring additional financing options to strengthen liquidity; however, there can be no assurance that such funding will be available on favorable terms or at all. There can be no assurance that revenue growth will continue in the future. In addition, we may experience substantial fluctuations in operating results in the future caused by various factors, including:

●We ~~General~~did ~~economic~~not ~~conditions;~~sell any equity securities during the period covered by this Quarterly Report that were not registered under the Securities Act. We did not purchase any common shares during the period covered by this Quarterly Report under the Borealis stock buyback program as previously reported by Borealis in its Current Report on Form 8-K filed with the SEC on September 6, 2024.

●Item ~~Specific~~3. ~~economic~~Defaults ~~conditions~~Upon inSenior ~~the food and agriculture industry;~~Securities

~~● The impact of inflation and rising interest rates across the economy, including higher food, grocery, raw materials, transportation, energy, labor and fuel costs;~~None.

29Item 4. Mine Safety Disclosures

●Not increases in the price of raw materials, labor, wages or other inputs that our suppliers use in manufacturing and supplying products, along with logistics, transportation, shipping and other related costs, may lead to higher production and shipping costs for our productsApplicable. ~~Any increase in the cost of inputs to our production could lead to higher costs for products in retail channels and could negatively impact our operating results and future profitability;~~

●Item ~~the~~5. ~~introduction~~Other ~~of new products by us or our competitors; and~~Information

●Rule 10b5-1 Trading Arrangements. During the ~~mix~~three months ended March 31, 2026, none of ~~products~~the ~~sold~~Company’s ~~and~~directors or officers (as defined in Rule 16a-1(f) under the ~~mix~~Exchange Act) adopted or terminated any contract, instruction, or written plan for the purchase or sale of ~~channels~~the ~~through~~Company’s ~~which~~securities ~~those~~that ~~products~~was ~~are~~intended ~~sold~~to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” (as defined in Item 408(c) of Regulation S-K).

As a strategic response to a changing competitive environment, we may elect from time to time to make, among other things, certain pricing, product, or marketing decisions, and any such decisions could have a material adverse effect on our periodic results of operations, including revenue and profits from quarter to quarter.30

Item 26. ~~Unregistered Sales of Equity Securities and Use of Proceeds~~Exhibits

We did not sell any equity securities during the period covered by this Quarterly Report that were not registered under the Securities Act. We did not purchase any common shares during the period covered by this Quarterly Report under the Borealis stock buyback program as previously reported by Borealis in its Current Report on Form 8-K filed with the SEC on September 6, 2024.

Exhibit Number		Description
10.1		Forbearance and Amendment Agreement dated March 27, 2026, by and among Borealis Foods Inc., Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., PGF Real Estate II, Inc., and FrontWell Capital Partners Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 2, 2026).
10.2		Credit Agreement dated April 27, 2026, by and among Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., PGF Real Estate II, Inc., the guarantors party thereto, and Oxus Capital PTE Ltd. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on May 1, 2026).
10.3		Conversion Agreement dated April 27, 2026, by and among Borealis Foods Inc., Oxus Capital PTE Ltd., Reza Soltanzadeh, and Barthelemy Helg (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed on May 1, 2026).
10.4		Convertible Promissory Note dated May 29, 2026, issued by Borealis Foods Inc. to Oxus Capital PTE LTD. (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 4, 2026).
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.
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)

~~Item~~* 3.Filed ~~Defaults Upon Senior Securities~~herewith.

~~None~~** Furnished herewith.

~~Item 4. Mine Safety Disclosures~~31

~~Not Applicable.~~SIGNATURES

~~Item~~Pursuant 5.to ~~Other~~the ~~Information~~requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

None.

Date: June 30, 2026

	By:	/s/ Reza Soltanzadeh
		Reza Soltanzadeh
		Chief Executive Officer & Director

Date: June 30, 2026	-and-

	By:	/s/ Stephen Wegrzyn
		Stephen Wegrzyn
		Chief Financial Officer

~~Item 6. Exhibits~~32

Exhibit Number		Description
10.1*		Form of Promissory Note for Barthelemy Helg and Z Ventures Inc.
10.2*		Form of Promissory Note for Oxus Capital PTE Ltd.
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.
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)

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 19, 2025
	By:	/s/ Reza Soltanzadeh
		Reza Soltanzadeh
		Chief Executive Officer & Director

Date: November 19, 2025	-and-
	By:	/s/ Stephen Wegrzyn
		Stephen Wegrzyn
		Chief Financial Officer

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Filing Compare · Borealis Foods Inc.