v3.26.3
Subsequent Events
12 Months Ended
Dec. 31, 2025
Subsequent Events [Abstract]  
Subsequent Events

12. Subsequent Events

 

The Company evaluated events and transactions occurring after December 31, 2025 through May 29, 2026, the date these consolidated financial statements were available to be issued, for subsequent events requiring recognition or disclosure.

 

On November 13, 2025, the Company received a notice from its senior lender, FrontWell Capital Partners Inc. (“FrontWell”), asserting the occurrence of Default under the credit agreement dated August 10, 2023 (as amended, the “FrontWell Credit Agreement”). On March 27, 2026, the Company, together with 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’s subsidiaries, Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., and PGF Real Estate II, Inc. (collectively, the “Borrowers”), entered into a Credit Agreement (the “Oxus Credit Agreement”) with Oxus Capital PTE Ltd. (“Oxus Capital”), a major shareholder of the Company, as lender. Borealis Foods Inc., Borealis IP Inc., and Palmetto Gourmet Foods (Canada) Inc. are party to the Oxus Credit Agreement as guarantors. The Oxus Credit Agreement provides for a term loan facility in an amount of up to $17,000,000 (the “Term Loan”), the proceeds of which were used to repay in full and discharge all outstanding obligations under the FrontWell Credit Agreement and to pay associated transaction fees and expenses. The Term Loan bears interest at 12% per annum and matures on April 27, 2031. Principal is repayable in 48 consecutive monthly installments calculated on a straight-line basis over the amortization period, commencing on the first payment date. Interest payments commence on May 1, 2027; provided that Oxus Capital has the option, at its sole election, to convert all interest accrued during the first year of the loan into common equity of the Company in lieu of cash payment. The Term Loan is secured by a first-priority lien on substantially all assets of the Borrowers, including mortgages on the Company’s manufacturing facility and distribution center located in Saluda, South Carolina. In connection with the Oxus Credit Agreement, Oxus Capital is entitled to appoint two members to the Company’s Board of Directors. Additionally, Oxus Capital and the Company entered into a Subscription Agreement pursuant to which the Company is obligated to raise not less than $70,000,000 in additional equity from investors acceptable to Oxus Capital at a price of not less than $9.00 per share on or before June 30, 2026; in the event such equity financing is not consummated by such date, the Subscription Agreement provides for the conversion of outstanding convertible notes held by Oxus Capital into equity interests of the Company. The Oxus Credit Agreement constitutes a related party transaction as Oxus Capital is a major shareholder of the Company.

 

Between January 1, 2026 and May 29, 2026, the Company received additional unsecured advances from the Chairman of the Board of Directors and Chief Executive Officer in the amounts of $2,050,000 and $282,500, respectively. In addition, the Chief Executive Officer deferred approximately $208,000 in compensation during this same period.