Borealis Foods Inc 8-K, filed Nov 14, 2024

Borealis Foods Inc. (BRLS)

8-K 2024-11-14 For: 2024-11-14

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Added on April 07, 2026

About this 8-K

Borealis Foods Inc filed this 8-K on November 14, 2024.

Items reported

Item 2.02: Financial results
Item 9.01: Financial statements and exhibits

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Ontario (State or other jurisdiction of incorporation or organization)	001-40778 (Commission File Number)	98-1638988 (I.R.S. Employer Identification Number)
1540 Cornwall Rd., Suite 104 Oakville, ON L6J 7W5
(Address of principal executive offices and zip code)
(905) 278-2200
(Registrant's telephone number, including area code)


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


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


Exhibit No.						Description
99.1						Press Release of Borealis Foods Inc. dated November 14, 2024
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)


	BOREALIS FOODS INC.

Date: November 14, 2024	By	/s/ Pouneh V. Rahimi
		Pouneh V. Rahimi
		Chief Legal Officer


			For the Three Months Ended								For the Nine Months Ended
			September 30, 2024			September 30, 2023				September 30, 2024				September 30, 2023
Gross sales	8075788			8264745				22036285				23870009
Sales discounts & allowances			(387,889)				(539,392)				(1,127,673)				(1,342,799)
Revenue, net			7,687,899				7,725,353				20,908,612				22,527,210

Cost of goods sold			5,953,089				7,205,527				17,109,095				21,449,469
Depreciation			461,540				996,625				1,861,351				2,938,098
Total cost of goods sold			6,414,629				8,202,152				18,970,446				24,387,567
Gross profit (loss)			1,273,270				(476,799)				1,938,166				(1,860,357)
Sales and marketing			1,123,460				312,289				5,073,810				1,677,316
Business development			1,306,589				196,243				2,475,764				435,015
Training			477,752				651,500				1,364,149				2,130,207
General and administrative expenses			1,986,517				2,786,155				8,807,852				9,332,345
Total SG&A Expenses			4,894,318				3,946,187				17,721,575				13,574,883
Loss from operations			(3,621,048)				(4,422,986)				(15,783,409)				(15,435,240)

Other income (expense):
(Loss) Gain on foreign exchange rates			(2,765)				4,298				3,368				163,588
Interest expense			(1,207,524)				(2,166,413)				(3,766,542)				(5,535,932)
Total other expense			(1,210,289)				(2,162,115)				(3,763,174)				(5,372,344)
Loss before income taxes			(4,831,337)				(6,585,101)				(19,546,583)				(20,807,584)
Income tax expense			(832)				0				(14,948)				(15,092)
Net loss	$	(4,832,169)		$	(6,585,101)			$	(19,561,531)			$	(20,822,676)
Earnings per share from net loss
Basic	$	(0.23)		$	(0.61)			$	(0.98)			$	(1.94)
Diluted	$	(0.23)		$	(0.61)			$	(0.98)			$	(1.94)
Weighted average shares outstanding
Basic			21,378,890				10,731,583				19,951,016				10,731,583
Diluted			21,378,890				10,731,583				19,951,016				10,731,583


		September 30, 2024		December 31, 2023
		(Unaudited)
Assets
Current Assets
Cash	721542		7615630
Accounts receivable, net		2,907,790		1,775,756
Inventories, net		8,750,399		6,945,028
Prepaid expenses		1,048,029		845,878
Total current assets		13,427,760		17,182,292

Property, plant and equipment, net		46,066,397		46,408,540
Intangible assets		253,017		—
Right - of-use asset, net		77,311		108,469
Goodwill		1,917,356		1,917,356
Other non-current assets		169,685		169,685
Total assets	61911526		65786342

Liabilities and Shareholders' equity (deficit)
Current liabilities:
Accounts payable and accrued expenses	8596330		10887730
Due to related parties		15,427,453		7,825,790
Convertible notes payable, current portion		—		47,300,000
Notes payable, current portion, net of capitalized loan costs		5,706,934		681,121
Operating lease payable, current portion		17,776		43,794
Finance leases payable, current portion		550,212		565,353
Total current liabilities		30,298,705		67,303,788

Line of credit		6,500,000		—
Convertible notes payable, net of current portion		3,000,000		3,000,000
Notes payable, net of current portion		14,149,885		13,509,189
Operating lease payable, net of current portion		43,793		71,119
Finance leases payable, net of current portion		1,283,129		1,683,308
Deferred tax liability		1,566,233		1,566,233
Total liabilities		56,841,745		87,133,637
Shareholders' equity (deficit)
Common shares, no par value		—		—
Additional paid-in capital		90,096,688		44,118,081
Accumulated deficit		(85,026,907)		(65,465,376)
Total shareholders' equity (deficit)		5,069,781		(21,347,295)
Total liabilities and shareholders' equity (deficit)	61911526		65786342


		Nine Months Ended September 30, 2024		Nine Months Ended September 30, 2023
Cash Flows from Operating Activities:
Net loss	$	(19,561,531)	$	(20,822,676)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash compensation expense related to stock options		1,273,053		392,141
Depreciation and amortization		1,861,351		2,938,098
Amortization of loan costs		232,798		28,266
Provision for credit losses		96,217		49,642
Provision for inventory reserve		(33,534)		(141,440)
Changes in operating assets and liabilities:
Accounts receivable		(1,228,251)		(726,552)
Inventories		(1,771,837)		(389,911)
Prepaid expenses and other		(202,151)		119,921
Operating lease payable		(22,185)		—
Accounts payable and accrued expenses		5,085,952		2,497,246
Net cash used in operating activities		(14,270,118)		(16,055,265)
Cash flows from investing activities
Purchases of property, plant and equipment		(1,519,208)		(3,516,490)
Purchases of intangible assets		(253,017)		—
Proceeds from reverse capitalization		63,575		—
Net cash used in investing activities		(1,708,650)		(3,516,490)
Cash flows from financing activities
Net payments to related parties		—		(500,000)
Proceeds from convertible notes payable		3,000,000		25,000,000
Payments on convertible notes payable		—		(4,500,000)
Payments on finance leases payable		(415,320)		(366,846)
Borrowings on line of credit		6,500,000		—
Payments on line of credit		—		(10,630,000)
Payments on notes payable		—		15,000,000
Payments on loan fees		—		(607,436)
Net cash provided by financing activities		9,084,680		23,395,718
Net change in cash		(6,894,088)		3,823,963
Cash, beginning of period		7,615,630		5,146,616
Cash, end of period	721542		8970579


Reconciliation of Net Income (Loss) to Adjusted EBITDA

			Three Months Ended						Nine Months Ended
			Sept 30,						June 30,
(in thousands)			2024			2023			2024			2023
Net income (loss)	$	(4,832)		$	(6,585)		$	(19,562)		$	(20,823)
Plus: Taxes			(1)			0			15			15
Plus: Depreciation and amortization			472			997			1,861			2,938
Plus: Loss on disposal			0			0			0			0
Plus: Interest expense			1,208			2,166			3,767			5,536
EBITDA			(3,153)			(3,422)			(13,919)			(12,334)

Plus: non-recurring expenses
Marketing			1,123			312			5,074			1,677
One time crew training			477			652			1,364			2,130
Stock compensation			0			100			1,273			392
Transaction costs			263			1,241			1,770			4,005
Product development expenses			1,307			196			2,477			435
Total non-recurring expenses			3,170			2,501			11,958			8,639
Adjusted EBITDA	17			$	(921)		$	(1,961)		$	(3,695)


Emerging growth company			x