Borealis Foods Inc. Files Q2 2025 10-Q

TL;DR

Borealis Foods (formerly Oxus) filed its Q2 2025 10-Q. All systems go.

AI Summary

Borealis Foods Inc. filed its quarterly report for the period ending June 30, 2025. The company, formerly known as Oxus Acquisition Corp. until March 23, 2021, is incorporated in Ontario and operates in the food and kindred products sector. Its principal executive offices are located at 1540 Cornwall Rd. #104, Oakville, Ontario, Canada.

Why It Matters

This filing provides investors with an update on Borealis Foods Inc.'s financial performance and operational status for the second quarter of 2025.

Risk Assessment

Risk Level: low — The filing is a standard quarterly report and does not contain immediate red flags.

Key Players & Entities

• Borealis Foods Inc. (company) — Registrant
• Oxus Acquisition Corp. (company) — Former company name
• June 30, 2025 (date) — Quarterly period end date
• March 23, 2021 (date) — Date of name change
• 1540 Cornwall Rd. #104, Oakville, Ontario, Canada (address) — Principal executive offices

FAQ

Filing Documents

• ea0253805-10q_borealis.htm (10-Q) — 642KB
• ea025380501ex31-1_borealis.htm (EX-31.1) — 10KB
• ea025380501ex31-2_borealis.htm (EX-31.2) — 9KB
• ea025380501ex32-1_borealis.htm (EX-32.1) — 5KB
• ea025380501ex32-2_borealis.htm (EX-32.2) — 5KB
• 0001213900-25-078599.txt ( ) — 4321KB
• brls-20250630.xsd (EX-101.SCH) — 35KB
• brls-20250630_cal.xml (EX-101.CAL) — 36KB
• brls-20250630_def.xml (EX-101.DEF) — 210KB
• brls-20250630_lab.xml (EX-101.LAB) — 390KB
• brls-20250630_pre.xml (EX-101.PRE) — 216KB
• ea0253805-10q_borealis_htm.xml (XML) — 365KB

Forward-looking statements involve risks and uncertainties

Forward-looking statements involve 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 are not limited to, the following: 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 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 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 ma

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1. Unaudited Condensed Consolidated Financial Statements 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

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 27 Item 4.

Controls and Procedures

Controls and Procedures 28

OTHER INFORMATION

PART II. OTHER INFORMATION 30 Item 1.

Legal Proceedings

Legal Proceedings 30 Item 1A.

Risk Factors

Risk Factors 30 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 31 Item 3. Defaults Upon Senior Securities 31 Item 4. Mine Safety Disclosures 31 Item 5. Other Information 31 Item 6. Exhibits 32

SIGNATURES

SIGNATURES 33 i Borealis Foods, Inc. and Subsidiaries Unaudited Condensed Consolidated Balance Sheets June 30, 2025 December 31, 2024 (Audited) Assets Current Assets Cash $ 206,579 $ 652,965 Accounts receivable, net of allowance for credit losses of $ 280,000 and $ 247,653 as of June 30, 2025 and December 31, 2024, respectively 2,319,901 1,965,748 Inventories, net 7,001,994 8,046,259 Prepaid expenses and other current assets 402,200 1,134,611 Total current assets 9,930,674 11,799,583 Property, plant and equipment, net 44,778,821 45,736,326 Intangible assets 351,009 319,307 Right - of-use asset, net 42,090 63,826 Goodwill 1,917,356 1,917,356 Other non-current assets 254,685 169,685 Total assets $ 57,274,635 $ 60,006,083 Liabilities and Shareholders' (deficit) Current liabilities: Accounts payable and accrued expenses $ 13,990,784 $ 11,529,803 Due to related parties 18,854,580 7,825,792 Line of credit - - Convertible notes payable, current portion - - Notes payable, current portion, net of capitalized loan costs 5,956,085 5,456,934 Operating lease payable, current portion 44,008 55,116 Finance leases payable, current portion 578,082 538,845 Total current liabilities 39,423,539 25,406,490 Due to related parties, net of current portion - 7,601,661 Line of credit 7,600,000 7,600,000 Convertible notes payable, net of current portion 3,000,000 3,000,000 Notes payable, net of current portion 14,132,682 14,478,051 Operating lease payable, net of current portion - 12,015 Finance leases payable, net of current portion 829,247 1,143,829 Deferred tax liability 1,459,923 1,459,923 Total liabilities 66,445,391 60,701,969 Shareholders' (deficit) Common shares, no par value - - Additional paid-in capital 90,409,532 90,096,688 Accumulated deficit ( 99,580,288 ) ( 90,792,574 ) Total shareholders' (deficit) ( 9,170,756 ) ( 695,886 ) Total liabil

Financial Statements

Financial Statements 1. Description of Business 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 subsidiaries: Palmetto Gourmet Foods (Canada) Inc., (" PGF Canada "), Palmetto Gourmet Foods, Inc. (" PGF "), PGF Real Estate I, Inc. (" PGF RE I "), PGF Real Estate II, Inc. (" PGF RE II "), and Borealis IP (" Borealis IP ") (collectively, the " Company "). Borealis is a food technology integrator with a mission to address global food security challenges through the development and commercialization of tasty, affordable and sustainable functional foods. Borealis has developed a range of high-quality, affordable, sustainable, and nutritious premium, ready-to-eat meals sold in the United States, Canada, Central America, South America and Europe. PGF Canada is a holding company, holding the shares of PGF. PGF is a food manufacturing company with a BRC AA+ rated food grade facility. PGF RE I and PGF RE II are holding companies that rent their fixed assets to PGF. Borealis IP holds the intellectual property of the Company. Intercompany balances and transactions have been eliminated in consolidation. Reverse Recapitalization Transaction On February 23, 2023, Borealis Foods Inc., a corporation incorporated under the laws of Canada (" Legacy Borealis "), entered into a Business Combination Agreement (as amended, amended and restated, supplemented, or otherwise modified from time to time, the "Business Combination Agreement") with Oxus Acquisition Corp. (" Oxus ") and 1000397116 Ontario Inc., an Ontario corporation and a wholly owned subsidiary of Oxus (" Newco "). On February 7, 2024, Legacy Borealis, Oxus, and Newco consummated the transactions (collectively, the " Reverse Recapitalization ") contemplated by the Business Combination Agreement by means of a statutory arrangement under the Canada Business Cor

Financial Statements

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 first half 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. 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. 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 (consisti

Financial Statements

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 decrease in net loss of $ 615,000 and $ 590,000 for the three months ended June 30, 2025 and 2024, respectively. The change in the method of calculating depreciation resulted in an decrease in net loss of $ 1,220,000 and $ 590,000 for the six months ended June 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 June 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 prope

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View this 10-Q filing on SEC EDGAR