Borealis Foods (NASDAQ: BRLS) hit by loan defaults and tighter credit terms

Rhea-AI Filing Summary

Borealis Foods Inc. reports that its lender, Frontwell Capital Partners, has declared multiple Events of Default under a $15,000,000 term loan and up to $10,000,000 revolving credit facility. The defaults include failing to maintain required Excess Availability of $4,375,000 and missing delivery of monthly financial statements and compliance certificates for October and November 2025.

The lender has stated it may increase its general reserve by $200,000, then by an additional $100,000 each week if Borealis does not raise $5,000,000 of equity or secure a refinancing commitment within 14 days of notice. The lender is not obligated to fund further revolving loans, though the Credit Agreement remains in effect and the debt has not been accelerated as of this report. Borealis is negotiating with the lender and simultaneously exploring other capital-raising, financing, cost-management, and strategic actions, but there is no assurance of success or continued access to revolving credit.

Positive

• None.

Negative

• Events of Default and liquidity pressure: Multiple Events of Default under a credit facility tied to a $15,000,000 term loan and up to $10,000,000 in revolving loans, with potential weekly reserve increases and no obligation on the lender to fund further revolver draws, materially increase financing risk.

Insights

Credit & restructuring analyst

Lender default notices and tighter reserves signal rising liquidity pressure.

Borealis Foods faces Events of Default under its Credit Agreement covering a $15,000,000 term loan and up to $10,000,000 in revolving loans. Breaches include the Excess Availability covenant of $4,375,000 and late financial reporting for October and November 2025, which are core lender protections.

The lender can increase its general reserve by $200,000, then by $100,000 weekly if Borealis does not raise $5,000,000 of equity or obtain a full refinancing commitment within 14 days of the February 2, 2026 notice. Higher reserves effectively reduce borrowing capacity and may constrain day-to-day liquidity.

The lender is not obligated to advance additional revolving loans and is reserving all rights, though it has not accelerated the debt or terminated the facility as of this report. Borealis is pursuing amendments, alternative financing and cost actions, but the outcome and future access to revolving loans remain uncertain based on the current disclosure.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

February 2, 2026

Date of Report (date of earliest event reported)

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., Suite 104
Oakville, ON L6J7W5

(Address of principal executive offices and zip code)

(905) 278-2200

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.

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. ☐

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On February 2, 2026, Borealis Foods Inc. (the “Company”) received a letter from counsel to Frontwell Capital Partners Inc. (the “Lender”) regarding the Credit Agreement, dated as of August 10, 2023 (as the same has been amended, supplemented or otherwise modified, from time to time, prior to the date hereof, the “Credit Agreement”), by and among the Company, Palmetto Gourmet Foods, Inc., PGF Real Estate I, Inc., PGF Real Estate II, Inc., Borealis IP Inc. and Palmetto Gourmet Foods (Canada) Inc., (together with the Company, the “Loan Parties”) and the Lender, pursuant to which, the Lender has (a) made certain term loans (the “Term Loans”) in the aggregate principal amount of USD $15,000,000 and (b) agreed to make, from time to time, certain revolving loans (the “Revolving Loans”) in the aggregate principal amount of up to USD $10,000,000, subject to the terms and conditions contained therein. All capitalized terms not defined herein but defined in the Credit Agreement shall have the meanings given to such terms in the Credit Agreement.

The letter states that, as previously notified in correspondence delivered on or about December 10, 2025, one or more Events of Default under the Credit Agreement have occurred and are continuing, and that additional Events of Default have occurred and are continuing, including, without limitation (i) the failure to maintain Excess Availability of at least $4,375,000 at all times as required by Section 7.1 of the Credit Agreement and (ii) the failure to timely deliver required monthly financial statements and related compliance certificates for the months ended October 31, 2025 and November 30, 2025, in each case as required under the Credit Agreement (collectively, the “Specified Events of Default”).

The letter further states that, as a result of the outstanding Specified Events of Default, and in accordance with Section 8.2(b) of the Credit Agreement, the Lender intends to exercise its rights to impose additional reserves. Specifically, the letter states that if the Loan Parties fail to raise an additional $5,000,000 of equity capital, or to provide the Lender evidence of a satisfactory commitment from a third party to refinance all the indebtedness, liabilities and obligations of the Loan Parties to the Lender under the Credit Agreement and other Loan Documents, within fourteen (14) days of notice, the Lender intends to increase its general reserve by $200,000, and to further increase the general reserve by an additional $100,000 on each subsequent weekly anniversary thereafter until such equity capital is raised or refinancing commitment is provided.

The Company believes that the imposition of additional reserves, and the potential incremental weekly increases thereto, constitute triggering events that increase a direct financial obligation of the Company under the Credit Agreement within the meaning of Item 2.04 of Form 8-K.

The letter further states that the Lender reserves all rights and remedies under the Credit Agreement and applicable law, that nothing therein constitutes a waiver, amendment or consent, and that the Lender may supplement the notice to identify additional Defaults or Events of Default. The letter also states that, as a result of the outstanding Events of Default, the Lender is under no obligation to honor requests for additional revolving loans, and that any advances made would not constitute a waiver or course of dealing.

The Credit Agreement remains in effect, and as of the date of this report, the Company has not been notified that the Lender has accelerated the payment of the indebtedness or terminated the revolving credit commitment.

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Item 8.01 Other Events

As disclosed under Item 2.04 of this Current Report on Form 8-K, on February 2, 2026, the Company received a letter from the Lender regarding certain Events of Default under the Credit Agreement and the Lender’s intent to impose additional reserves if specified equity or refinancing milestones are not achieved.

The Company is continuing to work collaboratively with the Lender regarding these matters, including among other things, potential amendments or modifications to the Credit Agreement, ongoing availability of revolving credit borrowings, and the timing and delivery of required financial reporting. No assurances can be given as to the outcome of such discussions or the future access by the Loan Parties to Revolving Loans under the Credit Agreement.

 In parallel, the Company is evaluating other capital-raising initiatives and liquidity-enhancing alternatives, which may include modifications to existing financing arrangements, incremental financing transactions, cost-management actions, or other strategic actions. The Company intends to provide additional disclosure as appropriate.

Item 9.01 Financial Statements and Exhibits

(d): The following exhibits are being filed herewith:

Exhibit No.		Description
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 6th day of February, 2026.

	BOREALIS FOODS INC.
Date: February 6, 2026	By	/s/ Pouneh Rahimi
		Pouneh V. Rahimi
		Chief Legal Officer

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FAQ

What Events of Default did Borealis Foods (BRLS) disclose in this 8-K?

Borealis Foods disclosed Events of Default under its Credit Agreement for failing to maintain Excess Availability of $4,375,000 and for not timely delivering monthly financial statements and compliance certificates for October 31 and November 30, 2025, as required by the loan terms.

How large is the Borealis Foods credit facility affected by the defaults?

The affected Credit Agreement includes term loans with an aggregate principal amount of $15,000,000 and a revolving credit facility of up to $10,000,000. These facilities are provided by Frontwell Capital Partners and cover Borealis Foods and several related loan parties.

What new reserve increases could Borealis Foods face from its lender?

If Borealis does not raise $5,000,000 of equity or secure a full refinancing commitment within 14 days of the February 2, 2026 notice, the lender intends to raise its general reserve by $200,000, then add $100,000 more on each weekly anniversary thereafter.

Is Borealis Foods’ revolving credit still available after these Events of Default?

The lender has stated it is under no obligation to honor requests for additional revolving loans after the Events of Default. The Credit Agreement remains in effect, but any future advances would be discretionary and would not constitute a waiver of defaults.

Has Borealis Foods’ lender accelerated the debt or terminated the Credit Agreement?

As of the report date, Borealis Foods has not been notified that the lender has accelerated repayment or terminated the revolving credit commitment. However, the lender has reserved all rights and remedies under the Credit Agreement and applicable law.

How is Borealis Foods responding to the credit defaults and reserve increases?

Borealis is working with the lender on possible amendments, revolving credit availability, and reporting timing. In parallel, it is considering other capital-raising efforts, financing changes, cost-management measures, and strategic actions, though outcomes and future revolver access are not assured.