4. Debt

In 2021, the Company issued a $3,000,000 convertible note that matures in December 2026 (unless converted) and bears interest at 3% annually. Accrued interest is payable monthly. The outstanding principal and interest under the convertible note may be converted, at the option of the holder, 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 a single round or a lead round, at 85% of the per share price paid during the qualified financing event. The note holder elected not to convert at the Reverse Recapitalization and therefore the note is due at maturity

During 2023, the Company’s subsidiaries entered into a $25,000,000 financing agreement with FrontWell Capital Partners Inc. (“FrontWell”), comprised of a $15,000,000 term facility and a $10,000,000 revolving line of credit, with a maturity date in August 2026. In March 2024 and February 2025, the Company entered into amendments extending the first principal payment date; under the February 2025 amendment, monthly payments of $83,000 commenced in September 2025 with a lump-sum balloon payment of $14,083,000 due at maturity.

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 March 31, 2026 and December 31, 2025 the line of credit had $2,209,383 and $2,691,096 drawn upon it, respectively.

On November 13, 2025, the Company received a notice from FrontWell asserting the occurrence of a Default under the FrontWell Credit Agreement. The default arose, in part, from the issuance of certain promissory notes to related parties that was subsequently identified as potentially inconsistent with the debt incurrence restrictions of the FrontWell Credit Agreement. On March 27, 2026, the Company and its subsidiaries Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., and PGF Real Estate II, Inc. (collectively, the “Forbearance Parties”) entered into a Forbearance and Amendment Agreement with FrontWell (the “Forbearance Agreement”), pursuant to which FrontWell agreed to forbear from exercising its rights and remedies with respect to specified defaults under the FrontWell Credit Agreement through April 27, 2026, subject to compliance with certain conditions, including the retention of a Chief Restructuring Officer. On April 27, 2026, the Company repaid and satisfied in full all outstanding obligations under the FrontWell Credit Agreement using proceeds from the Oxus Credit Agreement described below. In connection with the full payoff, the engagement of the Chief Restructuring Officer was terminated. The FrontWell Credit Agreement has been fully discharged and all liens thereunder released.

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.

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 of 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 of 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 of December 31, 2025, and bears interest at 8% per annum.

The foregoing three transaction-related notes payable, aggregating $5,433,713, are exclusive of the $7,601,661 non-interest-bearing Oxus shareholder note described under “Amounts Due to Related Parties,” which is also a Reverse Recapitalization-related obligation. Including that note, transaction-related notes payable aggregate $13,035,374, consistent with the disclosure in 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.