L.O.T.W. #158 - Borealis Foods Inc. Reheats Its Balance Sheet with Related Party Capital
The high-protein ramen maker swaps a forbearing senior lender for its own former SPAC sponsor - at 12% fixed, with board seats, a key-man trigger, and an equity-conversion kicker attached.
In April 2026, three Palmetto Gourmet Foods operating and real estate subsidiaries of Borealis Foods Inc. (Nasdaq: BRLS) closed a $17.0 million senior secured term loan from Oxus Capital PTE Ltd. - the company’s former SPAC sponsor and a significant shareholder. Proceeds were used to repay in full (approximately $16.2 million) the company’s existing Frontwell Capital Partners facility, which had been operating under a forbearance agreement amid substantial doubt about Borealis’s ability to continue as a going concern. The facility carries a 12% fixed rate, defers all principal and cash interest for roughly twelve months, and comes packaged with board-reconstitution rights, a lender option to convert Year 1 interest into stock, and a separate agreement under which ~$33.3 million of shareholder debt converts to equity if the company fails to raise $70 million by July 1, 2026.
👓At a Glance
Origination Date: April 27, 2026
Borrowers: Palmetto Gourmet Foods, Inc.; PGF Real Estate I, Inc.; PGF Real Estate II, Inc. (wholly owned subsidiaries of Borealis Foods Inc.)
Lender: Oxus Capital PTE Ltd. (former SPAC sponsor and significant shareholder; related party)
Deal Size: Up to $17.0 million
Structure: Senior secured term loan, single tranche
Rate: 12% per annum fixed rate
Term: ~ 5 years
Use of Proceeds: Refinance Frontwell Capital Partners facility in full (~$16.2 million); transaction expenses (~$375,000); ~$425,000 to the company
Source: Press Release
📷Borrower Snapshot
Sector: Consumer Staples
Subsector: Food Products
Commercial Stage: Revenue Generating; LTM EBITDA -
Business Overview: Borealis Foods is an integrated food-science and manufacturing company built around high-protein instant ramen, sold under the Chef Woo, Chef Ramsay, Ramen Express, and Woodles brands. Its products - marketed on a “complete protein” formulation delivering 20 grams of plant-based protein per serving - are manufactured by wholly owned subsidiary Palmetto Gourmet Foods at a plant in Saluda, South Carolina, and reach roughly 30,000 points of distribution across Walmart, Costco, Sam’s Club, Aldi, Publix, and Amazon. Founded in 2019 and taken public via SPAC.
⚙️Structure & Terms
Source: SEC 8-K
Structure: $17.0 million single tranche, funded at close
Maturity: April 27, 2031
Collateral: Substantially all assets of the borrowers and guarantors, plus first-lien mortgages on the Saluda, SC distribution center (313 Greenwood Highway) and manufacturing plant (4160 Columbia Highway)
Rate: 12% per annum fixed; default rate of an additional 2%
I/O Period: Effectively ~12 months - no principal or cash interest due until the first payment date of May 1, 2027
Repayment: 48 consecutive monthly principal installments on a straight-line basis beginning May 1, 2027; cash interest payable monthly in arrears from the same date
Fees: Included in schedule 2.5 which was not filed
Equity Features: At the lender’s sole discretion, accrued “Year 1 Interest” (the interest accruing from closing through April 30, 2027 - approximately $2.0 million at 12%) may be converted into Borealis common shares, priced at the lender’s election off the 60-trading-day average closing price preceding May 1, 2027.
Financial Covenants:
Capital Expenditures - Borrowers may not make capex in any calendar month exceeding 120% of the amount budgeted in the most recent rolling cash flow forecast, tested monthly beginning May 31, 2026