Borealis Foods (Nasdaq: BRLSW) details $980K chairman loan and unpaid CEO pay

Rhea-AI Filing Summary

Borealis Foods Inc. entered into a related-party financing arrangement as its chairman advanced an aggregate $980,000 to the company and its wholly owned subsidiary between June 5, 2025 and August 14, 2025. On August 15, 2025, these advances were formalized as promissory notes bearing 10% annual interest and are payable on demand, with the company allowed to prepay without penalty. The filing also notes that the CEO’s salary was not paid from February 1, 2025 through the end of the second quarter, and the company recorded $125,000 of accrued payroll expense in Q2 to reflect compensation for services during that period. Together, these items highlight the use of insider funding and deferred executive pay to support the company’s operations.

Insights

Corporate finance and governance analyst

Insider loan and unpaid CEO salary point to tight liquidity and governance sensitivities.

Borealis Foods documents that its chairman advanced $980,000, later documented as promissory notes dated August 15, 2025, carrying 10% per annum interest and payable on demand. This structure provides immediate access to funds but also creates a short-term, callable obligation to a related party, which can heighten refinancing and liquidity risk if not managed carefully.

The filing also notes that the CEO’s salary was not paid from February 1, 2025 through the end of Q2, with $125,000 recorded as accrued payroll expense in that quarter. Deferred executive compensation and reliance on insider loans can be read as signs of cash strain and raise governance questions about board oversight and related-party terms. Subsequent reports may clarify whether these obligations are repaid, refinanced, or converted into longer-term arrangements.

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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

August 19, 2025

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 L6J 7W5

(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 1.01 Enty into a Material Definitive Agreement.

On August 15, 2025, Borealis Foods Inc. (the “Company”) and its wholly owned subsidiary Palmetto Gourmet Foods, Inc., issued promissory notes to the Company’s Chairman of the Company’s Board of Directors (the “Chairman”) in the aggregate principal amount of $980,000 (the “Promissory Notes”). The Promissory Notes bears interest at a rate of 10% per annum and are due on demand. The notes may be prepaid at any time, in full or in part without penalty. The Promissory Notes were granted in connection with the Chairman advancing an aggregate amount of $980,000 in funds to the Company between June 5, 2025 and August 14, 2025.

The foregoing description of the Promissory Notes do not purport to be complete and are qualified in their entirety by the terms and conditions of the Promissory Notes, filed as Exhibit 10.1 hereto and incorporated by reference herein.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information called for by this item is contained in Item 1.01, which is incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The Company’s CEO salary was accrued and not paid from February 1, 2025 through the end of the second quarter. The Company recorded $125,000 in accrued payroll expense in Q2 to reflect compensation for services performed.

Item 9.01 Financial Statements and Exhibits

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

Exhibit No.		Description
10.1		Form of Promissory Notes, dated as of August 19, 2025.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

1

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.

	BOREALIS FOODS INC.
Date: August 19, 2025	By	/s/ Pouneh Rahimi
		Pouneh Rahimi
		Chief Legal Officer

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FAQ

What financing agreement did Borealis Foods Inc. (BRLSW) enter into on August 15, 2025?

On August 15, 2025, Borealis Foods Inc. and its wholly owned subsidiary issued promissory notes to the company’s chairman in the aggregate principal amount of $980,000, documenting funds previously advanced to the company.

What are the key terms of the Borealis Foods (BRLSW) promissory notes with the chairman?

The promissory notes to the chairman total $980,000, bear interest at 10% per annum, are due on demand, and may be prepaid at any time, in full or in part, without penalty.

Over what period did the Borealis Foods (BRLSW) chairman advance the $980,000 to the company?

The chairman advanced an aggregate $980,000 in funds to Borealis Foods Inc. between June 5, 2025 and August 14, 2025, which were later formalized as promissory notes.

How did Borealis Foods (BRLSW) account for its CEO’s unpaid salary in 2025?

Borealis Foods Inc. states that its CEO’s salary was not paid from February 1, 2025 through the end of the second quarter, and the company recorded $125,000 of accrued payroll expense in Q2 for these services.

Does the Borealis Foods (BRLSW) 8-K describe any off-balance sheet obligations?

The 8-K states that information about the company’s direct financial obligation is contained in the description of the $980,000 promissory notes, and this information is incorporated by reference under the item addressing obligations.

Is the Borealis Foods (BRLSW) chairman considered a related party in this financing?

Yes. The $980,000 in promissory notes were issued to the chairman of the board, making this a related-party financing arrangement between Borealis Foods and its chairman.