Borealis Foods' CEO Reza Soltanzadeh Issues Letter to Shareholders
Domestic manufacturing assets are attracting significant interest from global food companies, distributors, and retailers.
Borealis Foods Inc. (NASDAQ: BRLS) is a leading food-tech innovator known for its high-protein Chef Woo ramen, Ramen Express, and Woodles brands. Recently, CEO Reza Soltanzadeh communicated with shareholders to outline the company’s strategic developments and recent financial performance.
Dear Fellow Shareholders,
Reflecting on the previous year and the beginning of this year, we are excited to share several significant achievements that set the groundwork for promising developments ahead. Central to our success is our strategic positioning as a U.S.-based food producer. Our cutting-edge ramen manufacturing facility has the capacity to deliver 600 million meals annually. Our management team is focused on maximizing this capability while enhancing shareholder returns. To do this, we are establishing partnerships with top food producers, distributors, and retailers. These collaborations showcase our ability to provide value while minimizing exposure to tariffs and supply chain challenges that affect competitors outside the U.S.
Key highlights include:
- Improved profit margins – Our first-quarter gross margin for 2025 reached 13%, a significant increase from the 3% reported during the same period last year. This change corresponds to a gross profit of approximately $900,000, up from about $242,000 last year. Excluding depreciation and amortization primarily linked to our manufacturing facilities, we achieved a gross margin of 19%, compared to 15% from the prior year. Over the latter half of last year and into this year, we emphasized transitioning to higher-margin products, particularly our Chef Woo line. Additionally, contributions from our institutional sales channel are enhancing our financial performance as we work toward profitability.
- Partnerships driving diversification – We are forging vital collaborations with leading food service and institutional partners. Notably, during the first quarter, one of the largest food service companies became a significant customer, contributing $2 million during its initial full quarter with us. A substantial amount of ramen sold to this client is directed towards K-12 schools and correctional facilities. Collaborating with this major distributor allows us to enter numerous institutional markets without the sales and marketing expenditures required for retail products, resulting in improved profitability and cash flow.
- Promising partnership with a multinational – Announced in late 2024, our partnership with a prominent multinational food company officially commenced with product shipments this first quarter, marking early success in premium retail. Their selection of Borealis as a manufacturing partner serves as a powerful endorsement of our capabilities. Additionally, we have teamed up with a rapidly expanding grocery chain in the U.S., where we are the exclusive manufacturer for their branded ramen. We anticipate sharing in their growth as they continue to open new stores across the country.
- Reduction of operating expenses – In the first quarter, we managed a 37% reduction in SG&A expenses to $3.8 million. This decrease was driven by lower non-recurring professional fees, reduced training costs, and decreased marketing expenditures due to our strategic shift focusing on institutional sales and retail partnerships instead of direct consumer channels. The combination of improving gross margins and lower operating expenses helped significantly reduce our operating loss in the first quarter compared to last year. As we continue to increase sales to our key partners, we aim to achieve bottom-line profitability.
- Ongoing Financing Discussions – We are actively engaging with various potential strategic and financial partners to strengthen our financial standing and will provide updates on our progress.
With numerous prospects on the horizon for 2025 and beyond, our alliances position us favorably for long-term growth. We are committed to developing new, healthy, and delicious products that amplify these relationships. Our vision centers on becoming a leading innovative food tech company that addresses malnutrition through high-quality food offerings. The synergy of our innovative food science, exceptional U.S.-based manufacturing capabilities, and strong global partnerships is set to drive significant value creation. We look forward to sharing more updates on Borealis' advancements.
Best Wishes,
Reza Soltanzadeh
CEO
Borealis Foods Inc.
About Borealis Foods
Borealis Foods (NASDAQ: BRLS) is at the forefront of integrated food science and manufacturing, aiming to elevate the ready-to-eat meal and dry soup sectors with premium, nutritious offerings. Known for its popular ramen brands, Borealis Foods blends innovative flavors from various culinary traditions to create wholesome meal options for consumers. With manufacturing facilities based in the U.S., the company reflects a commitment to quality, innovation, and sustainability.
Strategic partnerships with major national and international food producers, retailers, and distributors are crucial to Borealis Foods’ success. By collaborating with top global food leaders, Borealis enhances its technological capabilities and delivers nutritional food products that align with its values of health and innovation.
Frequently Asked Questions
What are the recent financial improvements for Borealis Foods?
Borealis Foods reported a gross margin of 13% in the first quarter of 2025, significantly increasing from 3% in the previous year.
How is Borealis expanding its market reach?
The company is forming strategic partnerships with institutional clients and major food service companies to diversify its market presence and enhance profitability.
What products does Borealis Foods offer?
Borealis is known for its high-protein ramen brands, including Chef Woo, Ramen Express, and Woodles, focusing on premium and nutritious food options.
What is Borealis Foods' mission?
The company aims to disrupt the ready-to-eat meal industry by creating innovative, healthy products that combat malnutrition.
What are Borealis Foods' future plans?
Future strategies involve developing new products and strengthening financial positions through partnerships and improved manufacturing processes.
