Borealis Foods Authorizes Stock Buyback Program
Borealis Foods has announced a stock buyback program, which allows the company to repurchase up to $3.0 million of its common shares. This program is effective immediately and is designed to enhance shareholder value. The buyback can be executed through various methods including open market transactions, block trades, and privately negotiated transactions, all in accordance with Rule 10b-18 under the Securities Exchange Act. The exact timing and amount of repurchases will be at the management's discretion based on stock availability, market conditions, and other business factors. CEO Reza Soltanzadeh emphasized the company's growth milestones and stated that the current share valuation does not fully reflect the company's potential. The program will expire on May 30, 2025, but may be modified or terminated at any time.
- Stock buyback program authorized up to $3.0 million.
- Buyback can be executed through multiple methods including open market and private transactions.
- Management has discretion over timing and amount of repurchases.
- Program aims to enhance shareholder value.
- CEO highlights significant milestones and growth potential of the company.
- Buyback program is designed to manage capital structure for better shareholder returns.
- The buyback program may be suspended, terminated, or modified at any time without prior notice.
- There is no guarantee on the number of shares that will be repurchased.
- The program does not obligate the company to repurchase any specific dollar amount or number of shares.
- Potential risks involve general market and economic conditions affecting the buyback.
Insights
The announcement of Borealis Foods' stock buyback program reveals a noteworthy strategic financial decision. In essence, a stock buyback is when a company purchases its own shares from the marketplace, usually to enhance the value of remaining shares available by reducing the supply. This can also signal to the market that the company's management believes the stock is undervalued.
Borealis Foods' decision to allocate up to
In the short term, this move might result in a boost in stock price due to increased demand and reduced supply of shares. Long-term investors should consider whether the company is utilizing its capital effectively. If the buyback is part of a broader strategy to enhance shareholder value rather than an attempt to prop up the stock temporarily, it may be beneficial. Additionally, this financial maneuver could be juxtaposed against industry norms, where frequent buybacks might indicate a lack of better growth opportunities or innovation.
Additionally, retail investors should monitor the execution of this buyback, its impact on the company's financial health and whether Borealis Foods continues to make substantial operational and strategic progress.
From a market perspective, Borealis Foods' buyback program aligns with a common strategy to signal company strength and manage capital structure effectively. The move may reflect management's belief that the market currently undervalues the company, which could also hint at potential internal assessments of robust underlying business health. While buybacks can be interpreted as a positive signal, they are not without risks. The effectiveness hinges on the company's ability to sustain operational growth and profitability post-buyback.
It's also important to consider the broader market conditions and sector-specific trends. For a food tech company like Borealis, factors such as commodity prices, consumer behavior and regulatory changes can significantly influence its performance. Investors should watch for any shifts in these areas that could impact the company's fundamentals post-buyback.
Market dynamics around the buyback, including trading volumes and stock price reactions, will offer insights into investor sentiment. If the market perceives the buyback as a sign of confidence, it could drive short-term positive momentum in the stock. However, long-term value creation will depend on the company's ability to leverage its resources effectively and continue its trajectory of innovation and market penetration.
Under the program, the Company may purchase up to
Reza Soltanzadeh, CEO of Borealis Foods, noted, "The management and Board of Directors strongly believe that the current valuation of our publicly traded shares does not accurately reflect the inherent strength and opportunity of our business. In the past five years since its inception, Borealis Foods has achieved remarkable milestones, including the development of valuable intellectual property, the establishment of a technologically advanced manufacturing facility, successful market introduction of two nationwide ramen brands, and diversification of revenue streams across various sales channels, all of which has positioned us well for the next phase of growth. We are confident that implementing the share buyback program as a strategic tool to manage our capital structure will deliver enhanced value to our shareholders."
The specific timing and amount of repurchases will be made at management's discretion at prices management considers to be attractive and in the best interest of both Borealis Foods and its shareholders, and will depend on a variety of factors, including the availability of stock, general market and economic conditions, trading volume, stock price, available liquidity, alternative uses for capital and other general business considerations, all subject to applicable legal, regulatory and contractual requirements.
The buyback program does not obligate Borealis Foods to purchase any particular dollar amount or number of shares and there is no guarantee as to the number of shares that the Company may ultimately repurchase. The program will expire on May 30, 2025, regardless of whether all
Borealis is an innovative food technology company with a mission to address global food security challenges through its research and development of tasty highly nutritious and functional food products that are both affordable and sustainable. The Company's focus on affordability and sustainability reflects its commitment to making a positive impact on both human life and the planet. Through its wholly-owned subsidiary, Palmetto Gourmet Foods, Borealis has created meals that are made with organic noodles, and are vegan, vegetarian, Halal, Kosher, plant-based, egg and dairy free, non-GMO, free of added MSG and TBHQ free. Borealis distributes its food products throughout
Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, including statements regarding the and future financial condition and performance of Borealis, and the expected financial impacts of the stock buyback program, markets, and expected future growth and market opportunities. Forward-looking statements generally relate to management's current expectations, hopes, beliefs, intentions, strategies, plans, objections or projections about future events or Borealis' future financial condition or operating performance. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements.
These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. As such, readers are cautioned not to place undue reliance on any forward-looking statements and readers should not rely on these forward-looking statements as predictions of future events.
Forward-looking statements are based upon estimates and assumptions that, while considered reasonable by management of Borealis, are inherently uncertain. Factors that may cause actual result to differ from current expectations include, but are not limited to: financial and operating performance; changes to existing applicable laws or regulations; the possibility that Borealis or the combined company may be adversely affected by economic, business, or competitive factors; Borealis' estimates of revenue, expenses, operating costs and profitability; the evolution of the markets in which Borealis competes and Borealis' ability to enter new markets effectively; and the ability of Borealis to implement its strategic initiatives and continue to innovate its existing services.
Forward-looking statements speak only as of the date they are made. Investors are cautioned not to put undue reliance on forward-looking statements and Borealis assumes no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities and other applicable laws.
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SOURCE Borealis Foods, Inc.
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