Borealis Foods Inc., an integrated food manufacturer specializing in ready-to-eat meals and dry soups, reported its financial results for the three and nine months ended September 30, 2024. The company experienced a slight decline in revenue, with net revenue for the third quarter at $7.69 million, down from $7.73 million in the same period of 2023. For the nine months, revenue decreased to $20.91 million from $22.53 million, reflecting a 7.2% decline.

Despite the revenue drop, Borealis achieved a gross profit of $1.27 million for the third quarter, a significant improvement from a gross loss of $0.48 million in the prior year. The gross margin increased to 17% from a negative margin of 6%. For the nine-month period, gross profit was $1.94 million, compared to a gross loss of $1.86 million in 2023. This improvement was attributed to a strategic focus on high-margin products, particularly the Chef Woo and Woodles brands, which accounted for 39% of quarterly revenue and 41% of year-to-date revenue.

Operating expenses for the third quarter totaled $4.89 million, representing 64% of net revenue, an increase of 13% compared to the same period in 2023. The company reported a net loss of $4.83 million for the third quarter, an improvement from a net loss of $6.59 million in the prior year. For the nine months, the net loss was $19.56 million, down from $20.82 million in 2023.

Borealis's total current assets decreased to $13.43 million as of September 30, 2024, from $17.18 million at the end of 2023, primarily due to a significant drop in cash from $7.62 million to $0.72 million. However, total current liabilities also decreased significantly from $67.30 million to $30.30 million, leading to an improvement in shareholders' equity from a deficit of $21.35 million to $5.07 million.

The company underwent a reverse recapitalization with Oxus Acquisition Corp. on February 7, 2024, which has raised concerns about its ability to continue as a going concern due to recurring losses and negative cash flows. As of September 30, 2024, Borealis had cash-on-hand of $721,542 and negative working capital of $16.87 million. The company is actively seeking additional financing to support its growth initiatives and address liquidity challenges.

Borealis's strategic focus remains on expanding its market presence, particularly in the plant-based food sector, while navigating challenges such as customer dependency and evolving consumer preferences.