Borealis Foods (BRLS) risk factors, FY2024 10-K

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1. 01” section, as such descriptions may be updated or amended in any future reports
2. 02We developed and launched the first plant-based instant ramen meals providing 20 grams of complete protein per serving. We believe our unique approach to making ready-made ramen makes us a disruptor in one of the most widely consumed food categories
3. 03Unique Approach to the Market
4. 04We were founded in 2019 with a vision of building sustainable, affordable, and nutritious food products. This vision was developed in response to growing global challenges in the areas of health, climate change, natural resource use, and helping find an affordable option to fight world hunger
5. 05Mission Aligned with Consumer Trends
6. 06Our founders assembled a multidisciplinary team with in-depth knowledge and experience gained from diverse career paths and backgrounds to execute the founders’ passion for feeding and nourishing people while supporting a more sustainable planet
7. 07Growth Across Distribution Channels
8. 08Invest in Infrastructure and Capabilities
9. 09Continue to Grow the Brand
10. 10We continue to expand our supply chain to ensure the certainty of supply of the highest quality raw materials that meet our requirements for quality
11. 11We utilize a comprehensive food safety and quality management program, which employs strict manufacturing procedures, expert technical knowledge of food safety science, employee training, ongoing process innovation, use of quality ingredients, and both internal and independent auditing
12. 12We do not have any issued patents but have two patent applications pending
13. 13available free of charge on our website under the “Investors,” “Financials” section as soon as reasonably practicable after we file such reports with, or furnish such reports to, the SEC

Risks Related to Our Financial Condition

1. 14Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern
2. 15We will require substantial capital investment in the future, and our inability to raise adequate capital could affect our ability to continue as a going concern
3. 16Restrictive covenants in the agreements governing our Credit Facility may restrict our future operations, including our ability to pursue our business strategies or respond to changes
4. 17In addition, the terms of any future indebtedness we may incur could include more restrictive covenants. We may not be able to maintain compliance with these covenants in the future and, if we fail to do so, we may not be able to obtain waivers from our creditors and/or amend the covenants
5. 18Our financial results and future growth have been, and could in the future be, harmed by currency exchange rate fluctuations
6. 19Insolvency, credit problems or other financial difficulties that could confront our retail partners could expose us to financial risk

Risks Related to Our Business

1. 20We have a limited operating history which makes it difficult to evaluate our business and prospects
2. 21The loss of key personnel, or failure to attract and retain other highly qualified personnel in the future, could harm our business
3. 22Our management team has limited experience managing a public company
4. 23We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives
5. 24which may lead to additional compliance costs and impact the manner in which we operate our business in ways that cannot currently be anticipated
6. 25Our dependence on suppliers may materially adversely affect our operating results and financial position
7. 26We may experience volatility in costs for ingredients and packaging due to conditions that are difficult to predict
8. 27successful in managing our ingredient and packaging costs, if we are unable to increase our prices to cover increased costs or if such price increases reduce our sales volumes, then such increases in costs may materially adversely affect our business, financial condition, results of operations and cash flow
9. 28The spread of contagious diseases, natural disasters, severe weather, actual or threatened hostilities or war, terrorist activity, political unrest, civil strife, and other geopolitical uncertainty may cause global economic disruption, and its impact on our business is uncertain
10. 29We face market competition, and if we are unable to compete effectively with our competitors, our business and operating results could be materially adversely affected
11. 30A significant portion of our revenue is concentrated with a limited number of customers. The loss of or deterioration or disruption in our relationship with one or more of our customers could have a material adverse effect on our business, financial condition, result of operations and cash flow
12. 31We may not continue to grow or maintain our active customer base, may not be able to achieve or maintain profitability, and may not be aligned with customer trends and preferences
13. 32If we fail to maintain adequate operational and financial resources, particularly if we continue to grow rapidly, we may be unable to execute our business plan or maintain our competitive position and high-level customer satisfaction
14. 33We will need to grow the size of our organization, and we may experience difficulties in managing this growth
15. 34The war in Ukraine, and the sanctions in place, could adversely affect global energy and financial markets thus potentially affecting our business and customers
16. 35We run the risk of crop failures largely dependent on factors outside of our control
17. 36Our business is subject to an increasing focus on environmental and social impact matters
18. 37Changes in commodity costs and other operating costs could materially adversely affect our results of operations

Risk Related to Technology and Intellectual Property

1. 38Our business depends on our use of proprietary technology relying heavily on laws to protect it
2. 39Inadequate technical and legal intellectual property (IP) protections could prevent us from defending or securing our proprietary technology and IP
3. 40Any cybersecurity-related attack, significant data breach, or disruption of the information technology systems, infrastructure, network, third-party processors, or platforms on which we rely could damage our reputation and materially adversely affect our business, and financial results

Risks Related to Legal and Regulatory Matters

1. 41We are subject to government regulation and industry policy risks that may change and cause us to no longer comply
2. 42We may be subject to changes in laws or regulations that can change on any given day
3. 43We are subject to multinational requirements beyond our control
4. 44Climate change, and related legislative and regulatory responses to climate change, may materially adversely impact our business

Risk Relating to Ownership of our Securities

1. 45Raising additional capital may cause dilution to our shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidates
2. 46Our Articles, together with our By-laws, and Canadian laws and regulations applicable to us may adversely affect our ability to take actions that could be deemed beneficial to our shareholders
3. 47U.S. shareholders may not be able to obtain judgments or enforce civil liabilities against us or our executive officers or our board of directors
4. 48The price of our Common Shares may be volatile, and you could lose all or part of your investment
5. 49We may issue additional shares or other equity securities in the future in connection with, among other things, future acquisitions, repayment of outstanding indebtedness or grants under the Incentive Plan without shareholder approval in a number of circumstances
6. 50The global scope of our business subjects us to risks that could negatively affect our business
7. 51Unfavorable general economic conditions could adversely affect our business, financial condition, results of operation and cash flow
8. 52As current tariffs are implemented, or if additional or increased tariffs or other restrictions are placed on foreign imports or any related counter-measures are taken by other countries, our business, financial condition, results of operations and cash flow could be harmed
9. 53Economic recessions or downturns could impair our company and harm our business, financial condition, operating results and cash flow
10. 54Inflationary pressures have been elevated in recent years, and there is a risk of the economy entering a recession