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Borealis Foods Denies It Hid Misstated Financials From Investors

Noodle maker waited a month to reveal it had corrected material misstatements then denied making the disclosure after DuDil asked it to identify & quantify the misstatements.

June 2, 2024 (Updated June 11, 2024)

Borealis Foods (BRLS), a plant-based meat and ramen noodle maker, belatedly released its annual report without telling investors it had corrected material financial misstatements.

In its first annual report since coming public via a SPAC four months ago, Borealis did not reflect the correction of an error in any previously released financial statements.

Likewise, the company did not check the box the Securities and Exchange Commission (SEC) requires companies to check if they’ve restated any prior financials.

Five weeks later though, in a belatedly filed quarterly report that detailed multiple control deficiencies including its accounting, Borealis admitted it had identified and corrected significant errors:

“As a result of these deficiencies, material misstatements were identified and corrected in the consolidated financial statements as of and for the year ended December 31, 2023.”

The company did not provide any additional detail.

Eight days after DuDil requested the company identify and quantify the misstated accounts and provide an explanation for why the errors were not disclosed five weeks earlier in the annual report, Borealis appeared to deny it had made the disclosure.

Jeremy Hellman, a representative of the firm hired to do investor relations for Borealis, provided DuDil this response from the Borealis legal team:

“The 10Q does not refer to "material misstatements”, but rather to two “material weaknesses” that could lead to misstatements. We do not believe that there was any misstatement in the 10Q and we are in the process of remediating the weaknesses.”

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