Zevia PBC

1. DESCRIPTION OF BUSINESS

Organization and operations

Zevia PBC (the “Company,” “we,” “us,” “our”) is a better-for-you beverage company that develops, markets, sells, and distributes naturally delicious,zero sugar beverages. We are a Delaware public benefit corporation and have been designated as a “Certified B Corporation,” and are focused on addressing the global health challenges resulting from excess sugar consumption by offering a broad portfolio ofzero sugar,zero calorie, naturally sweetened beverages. All Zevia® beverages are Non-GMO Project verified, gluten-free, Kosher, and vegan, and include a variety of flavors across Soda and Energy drinks. Our products are distributed and sold principally across the United States (“U.S.”) and Canada through a diverse network of major retailers in the grocery, drug, warehouse club, mass, natural, convenience and e-commerce channels and in natural product stores and specialty outlets. The Company’s products are manufactured and maintained atthird-party beverage production and warehousing facilities located in both the U.S. and Canada.

The Company completed its initial public offering (“IPO”) of 10,700,000 shares of its Class A common stock at an offering price of $14.00 per share on* July 26, 2021.*Its Class A common stock is listed on the New York Stock Exchange trading under the ticker symbol “ZVIA.” In connection with the IPO, the Company also completed certain reorganization transactions (the “Reorganization Transactions”), pursuant to which Zevia LLC became the predecessor of the Company for financial reporting purposes. The Company is a holding company, and its sole material asset is its controlling equity interest in Zevia LLC. As the sole managing member of Zevia LLC, the Company operates and controls all of the business and affairs of Zevia LLC.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial reporting and with the instructions to Form10-Q and Article10 of Regulation S-X. Accordingly, these financial statements donot include all information and footnotes required by U.S. GAAP for complete financial statements and arenot necessarily indicative of the results to be expected for the fiscal year ending* December**31,* 2026, or for any other interim period or any other future fiscal year. The condensed consolidated balance sheet as of* December 31, 2025* included herein was derived from the audited financial statements as of that date but doesnot include all disclosures, including certain notes, required by U.S. GAAP that are required on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. Therefore, these interim financial statements should be read in conjunction with the financial statements for the fiscal year ended* December 31, 2025* and accompanying notes included in the Annual Report. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the condensed consolidated financial statements for the periods presented have been reflected.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, Zevia LLC, that it controls due to ownership of a majority equity interest. All intercompany transactions and balances have been eliminated in consolidation.

The Company owns a majority economic interest in, and operates and controls all of the businesses and affairs of Zevia LLC. Accordingly, the Company has prepared these accompanying unaudited condensed consolidated financial statements in accordance with Accounting Standards Codification (“ASC”) Topic810, Consolidation.

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On* January 1, 2022,the Company and Zevia LLC entered into a service agreement to transfer the services of all employees of the Company to Zevia LLC. Under terms of the service agreement between the entities, the payroll costs of employees are borne by Zevia LLC while certain other non-payroll costs, such as those associated with stock compensation arrangements, remain with the Company. In addition, pursuant to the Thirteenth Amended and Restated Limited Liability Company Agreement of Zevia LLC, dated as of July 21, 2021,Zevia LLC shall reimburse the Company for certain expenses for overhead, administrative, and other expenses, at the Company’s discretion. For thethree* andnine months ended* September 30, 2026and2025*, it was determined that the majority of such costs will be retained by the Company, with certain costs directly attributable to Zevia LLC being borne by that entity. These costs impacted the amount of net loss reported by Zevia LLC and consequently impacted the amount allocated to noncontrolling interest.

Use of estimates

The preparation of the accompanying unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the reported amount of net sales and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by the Company relate to: net sales and associated cost recognition; the useful lives assigned to and the recoverability of property and equipment; adjustments recorded for inventory obsolescence and adjustments made for net realizable value; the incremental borrowing rate for lease liabilities; allowance for credit losses; the useful lives assigned to and the recoverability of intangible assets; realization of deferred tax assets; contingent liabilities; and the determination of the fair value of equity instruments, including restricted unit awards, and equity-based compensation awards. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of its assets and liabilities.

Recent accounting pronouncements

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) isno longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the accompanying unaudited condensed consolidated financial statements* may**not* be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Recently Issued Accounting Pronouncements–* Adopted*

In* December 2023,the Financial Accounting Standards Board (“FASB”) issued ASUNo.* 2023-09 Income Taxes (Topic740*): Improvements to Income Tax Disclosures*. The guidance requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The guidance is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The ASU2023-09 is effective for the Company beginning with fiscal year2026. The Company is applying the new guidance on a prospective basis and expects the guidance to impact only disclosures withno effect on the Company’s financial condition, results of operations or cash flows.

Recently Issued Accounting Pronouncements–* Not Yet Adopted*

In* November 2024,the FASB issued ASUNo.* 2024-03, Disaggregation of Income Statement Expenses. The new guidance requires disclosures about specific types of expenses included in the expense captions presented on the face of income statement as well as disclosures about selling expenses. This guidance is effective for annual reporting periods beginning after* December 15, 2026and interim reporting periods beginning after December 15, 2027,*with early adoption permitted. The requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the impact of adopting this guidance.

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In* December 2025,the FASB issued ASUNo.* 2025-11, Interim Reporting (Topic270): Narrow-Scope Improvements, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods. The amendments add to Topic270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This guidance is effective for interim reporting periods within annual reporting periods beginning after* December 15, 2027,*with early adoption permitted. The amendments in this update can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this guidance.

Any other recently issued accounting pronouncements are neither relevant, nor expected to have a material impact on the Company’s financial statements.

3. REVENUES

Disaggregation of Revenue

The Company’s products are distributed and sold principally across the U.S. and Canada through a diverse network of major retailers, including: grocery stores, drug stores, warehouse clubs, mass stores, natural product stores, convenience, and online/e-commerce channels.

The following table disaggregates the Company’s sales by geographic location of the respective customers based on ship to location:

Contract liabilities

The Company didnot have any material unsatisfied performance obligations as of* September 30, 2026* or* December 31, 2025*.

4. INVENTORIES

Inventories consisted of the following as of:

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5. PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consisted of the following as of:

For thethree months ended* September 30, 2026and2025*, depreciation expense, including the amortization of leasehold improvements, amounted to approximately $0.2 million and $0.2 million, respectively. For thenine months ended* September 30, 2026and2025*, depreciation expense, including the amortization of leasehold improvements, amounted to approximately $0.5 million and $0.5 million, respectively. These amounts are included under depreciation and amortization in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.

6. INTANGIBLE ASSETS, NET

The following tables provide information pertaining to the Company’s intangible assets as of:

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For thethree months ended* September 30, 2026and2025*, total amortization expense amounted to less than $0.1 million and $0.1 million, respectively, including less than $0.1 million and less than $0.1 million, respectively, of amortization expense related to software. For thenine months ended* September 30, 2026and2025*, total amortization expense amounted to less than $0.1 million and $0.2 million, respectively, including less than $0.1 million and less than $0.1 million, respectively, of amortization expense related to software. These amounts are included under depreciation and amortization in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. No impairment losses have been recorded on any of the Company’s intangible assets for thethree andnine months ended* September 30, 2026and2025*.

Amortization expense for intangible assets with definite lives is expected to be as follows:

7. DEBT

ABL Credit Facility

On* February 22, 2022,Zevia LLC (the “Borrower”) obtained a revolving credit facility (the “Secured Revolving Line of Credit”) by entering into a Loan and Security Agreement with Bank of America, N.A. (the “Loan and Security Agreement”). The Borrower maydraw funds under the Secured Revolving Line of Credit up to an amountnot* to exceed the lesser of (i) a $20 million revolving commitment and (ii) a borrowing base which is comprised of inventory and receivables. Up to $2 million of the Secured Revolving Line of Credit* maybe used for letter of credit issuances and the Borrower has the option to increase the commitment under the Secured Revolving Line of Credit by up to $10 million, subject to certain conditions. On May 15, 2026,the Borrower entered into a First Amendment to the Loan and Security Agreement which extended the maturity date to February 22, 2030from February 22, 2027.As of September 30, 2026* and* December 31, 2025,there wasno amount outstanding on the Secured Revolving Line of Credit. The Secured Revolving Line of Credit is secured by afirst* priority security interest in substantially all of the Company’s assets.

Loans under the Secured Revolving Line of Credit, as amended, bear interest based on either, at the Borrower’s option, the Term Secured Overnight Financing rate plus an applicable margin between 1.50% to 2.00% or the Base Rate (customarily defined) plus an applicable margin between 0.50% to 1.00% with margin, in each case, determined by the average daily availability under the Secured Revolving Line of Credit.

Under the Secured Revolving Line of Credit, as amended, the Borrower must satisfy the following financial covenants: (i) until the Borrower has achieved a fixed charge coverage ratio of at least 1.00 to1.00 fortwo consecutive fiscal quarters (orsix consecutive months, as applicable), a minimum liquidity requirement of at least $7 million, at all times, and (ii) a minimum fixed charge coverage ratio of 1.00 to1.00 as of the last day of any12 month period following the occurrence of certain events of default that are continuing or any day on which availability under the Secured Revolving Line of Credit is less than the greater of $3 million and 17.5% of the borrowing base, and must again satisfy such financial covenant as of the last day of each12 month period thereafter until such time as there areno events of default and availability has been above such threshold for30 consecutive days. As of* September 30, 2026*, the Borrower was in compliance with these financial covenants.

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8. LEASES

The Company leases its office space for its corporate headquarters, which has a remaining lease term of3 months. In* September 2024,the Company entered into an agreement to sublease 8,468 square feet of the 20,185 square feet of leased office space. The sublease term is from October 8, 2024 to December 31, 2026.*

The Company’s recognized lease costs include:

The following table presents information about our weighted average discount rate and remaining lease term as of:

The Company’s variable lease costs and short-term lease costs werenot material.

The Company is obligated under a non-cancelable lease agreement providing for office space that expires on* December 31, 2026.*Maturities of lease payments under the non-cancelable lease were as follows:

On* April 16, 2026,the Company entered into anew lease for its corporate headquarters office with total square footage of 10,045 square feet. The lease has a term of 64 full calendar months commencing on the lease commencement date, which is expected to occur in thefourth* quarter of2026. Total rent obligations under the new lease are expected to be approximately $2.2 million.

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9. COMMITMENTS AND CONTINGENCIES

Purchase commitments

As of* September 30, 2026*, the Company doesnot have any material agreements with suppliers for the purchase of raw material with minimum purchase quantities. Our contract manufacturers are obligated to fulfill against purchase orders that are aligned with our forecast based on terms and conditions of the contract. Our forecasts provided to our contract manufacturers are short term in nature and atno time extend beyond a year.

Legal proceedings

The Company is involved from time to time in various claims, proceedings, and litigation. The Company establishes reserves for specific legal proceedings when it determines that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated.

The Company is subject to litigation in the United States District Court in the Central District of California where the plaintiff alleges that certain claims on the Company’s product labels are misleading. During thenine months ended* September 30, 2026,the Company recorded a litigation reserve of $1.9 million, which represents management's best estimate of the probable loss associated with this matter, included under general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. The accrual is included under accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheets as of September 30, 2026.Through mediation, the Parties reached a tentative settlement on April 20, 2026,and submitted a Notice of Settlement to the Court on April 22, 2026.On September 14, 2026,*the Plaintiff filed its motion for preliminary approval of the settlement with the Court.

10. BALANCE SHEET COMPONENTS

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of:

11. EQUITY-BASED COMPENSATION

In* July 2021,prior to the IPO, the Company adopted the Zevia PBC2021* Equity Incentive Plan (the*“2021* Plan”) under which the Company* may*grant options, stock appreciation rights, restricted stock units (“RSUs”), performance stock units (“PSUs”), restricted stock awards, other equity-based awards and incentive bonuses to employees, officers, non-employee directors and other service providers of the Company and its affiliates.

The number of shares available for issuance under the2021 Plan is increased on* January 1of each year beginning in2022* and ending with a final increase in2031 in an amount equal to the lesser of: (i)5% of the total number of shares of Class A common stock outstanding on the preceding* December 31,*or (ii) a smaller number of shares determined by the Company’s Board of Directors.

As of* September 30, 2026*, the2021 Plan provides for future grants and/or issuances of up to approximately 2.0 million shares of our common stock. Equity-based awards under our employee compensation plans are made with newly issued shares reserved for this purpose.

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Stock Options

The Company uses a Black-Scholes valuation model to measure stock option expense as of each respective grant date. Generally, stock option grants vest ratably over four years, have a 10-year term, and have an exercise price equal to the fair market value as of the grant date. The fair value of stock options is amortized to expense over the vesting period. There wereno stock options granted during thenine months ended* September 30, 2026and2025.*

The following is a summary of stock option activity for thenine months ended* September 30, 2026*:

The total intrinsic value of stock options exercised during thenine months ended* September 30, 2026* was $0.2 million.

As of* September 30, 2026*, total unrecognized compensation expense related to unvested stock options was $0.3 million, which is expected to be recognized over a weighted-average period of 1.0 year.

Restricted Stock Units

The Company granted RSUs to members of the Board of Directors and its employees. The Company's outstanding RSUs typically vest over four years with vesting contingent upon continuous service. The Company determines the fair value of the RSUs using the market price of the common stock on the date of grant.

The following is a summary of RSU activity for thenine months ended* September 30, 2026*:

As of* September 30, 2026*, total unrecognized compensation expense related to unvested RSUs was $10.9 million, which is expected to be recognized over a weighted-average period of 2.9 years.

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Performance Stock Units

PSUs are awards that give the holder the right to receiveone share of common stock for each PSU upon meeting performance vesting conditions. These conditions typically include the attainment of specific metrics over a defined period. The fair value of the PSUs is determined based on the closing fair market value of the common stock on the grant date and is recognized over the vesting period if it is probable that performance conditions will be achieved.

During thenine months ended* September 30, 2026*, the Compensation Committee of the Board of Directors approved the grant of 772,011 shares of PSUs (at target performance) to certain executives. The PSUs cliff vest afterthree years from the grant date based on continuous service, with the number of shares earned (50% to 200% of the target awarded) depending upon the extent to which the Company achieves certain revenue metric measured over the period beginning* January 1, 2026and ending December 31, 2028.The aggregate grant date fair value was $1.0 million, or $1.24 weighted average per share. Total unrecognized compensation expense related to outstanding PSUs issued to executives as of September 30, 2026,*was $1.0 million and is expected to be expensed over the next 2.4 years, if probable of vesting.

12. SEGMENT REPORTING

The Company hasone operating and reporting segment and operates as a product portfolio with a single business platform. In reaching this conclusion, management considered the definition of the Chief Operating Decision Maker (“CODM”); how the business is defined by the CODM; the nature of the information provided to the CODM and how that information is used to make operating decisions; and how resources and performance are assessed. The Company’s CODM is the Chief Executive Officer. The results of the operations are provided to and analyzed by the CODM at the Company’s level and accordingly, key resource decisions and assessment of performance are performed at the Company’s level. The Company has a common management team across all product lines and doesnot manage these products as individual businesses, and as a result, cash flows arenot distinct.

The CODM assesses the Company’s performance by using net loss as shown in the consolidated statements of operations and comprehensive loss. The CODM uses net loss in the annual operating plan. The CODM considers budget-to-actual variances on monthly basis for the profit measure when making decisions about the allocation of operating and capital resources, evaluating pricing strategy and to assess performance of the Company.

Since the Company operates as a single operating segment, the unaudited condensed consolidated statements of operations and comprehensive loss present the significant expenses. Significant expenses also include direct selling expenses and marketing expenses presented as selling and marketing expenses in the unaudited condensed consolidated statements of operations and comprehensive loss. For thethree months ended* September 30, 2026and2025*, direct selling expenses amounted to $8.0 million and $7.7 million, respectively, and marketing expenses amounted to $7.2 million and $5.0 million, respectively. For thenine months ended* September 30, 2026and2025*, direct selling expenses amounted to $25.4 million and $25.5 million, respectively, and marketing expenses amounted to $17.3 million and $15.9 million, respectively. The Company hasno intra-entity transfers or sales. The other information required under ASC280, Segment Reporting, is provided in the notes to condensed consolidated financial statements including the Company’s products in Note1, Description of Business and Note3, Revenues. In addition, interest income for thethree months ended* September 30, 2026and2025* was $0.2 million and $0.2 million, respectively. Interest income for thenine months ended* September 30, 2026and2025* was $0.5 million and $0.6 million, respectively.

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13. MAJOR CUSTOMERS, ACCOUNTS RECEIVABLE AND VENDOR CONCENTRATION

The table below represents the Company’s major customers that accounted for more than10% of total net sales for the periods:

The table below represents the Company’s customers that accounted for more than10% of total accounts receivable, net as of:

The table below represents raw material and finished goods vendors that accounted for more than10% of all raw material and finished goods purchases for the following periods:

• Less than10% of total net sales, accounts receivable, net or finished goods purchases in the respective periods.

14. LOSS PER SHARE

Loss Per Share

Basic loss per share of Class A common stock is computed by dividing net loss attributable to the Company for the period by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted loss per share of Class A common stock is computed by dividing net loss attributable to the Company by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities and assumed conversion of Class B common stock into shares of Class A common stock on aone-for-one basis using the if-converted method.

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The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted loss per share of Class A common stock:

(1) The numerator for the basic and diluted loss per share is adjusted for additional losses being attributed to controlling interest as a result of the impacts of vested but unreleased RSUs being included in the denominator of the basic and diluted loss per share.

(2)The denominator for basic and diluted loss per share includes vested and unreleased RSUs as there areno conditions that would prevent these RSUs from being issued in the future as shares of Class A common stock except for the mere passage of time.

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Zevia LLC Class B units, stock options, RSUs and PSUs were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive. The following weighted average outstanding shares were excluded from the computation of diluted loss per share available to Class A common stockholders as they were anti-dilutive:

15. CAPITAL STOCK

At-The-Market Offering Program

On* August 12, 2025,the Company and its wholly-owned subsidiary, Zevia LLC, entered into an Equity Distribution Agreement (the “Agreement”) with Piper Sandler & Co. as sales agent (the “Agent”), pursuant to which the Company maysell from time to time through the Agent, shares of the Company’s Class A common stock, par value $0.001 (the “Common Stock”), having an aggregate gross sale price of up to $20 million (the “Offering”). Sales of Common Stock, if any, under the Agreement maybe made in any transactions that are deemed to be an “at-the-market offering” as defined in Rule415*(a)(4) under the Securities Act of1933, as amended. In addition, with the Company’s prior consent and subject to the terms it* mayestablish, the Agent mayalso sell the Common Stock by any other method permitted by law, including privately negotiated transactions. Under the Agreement, the Company will pay the Agent a commission equal to 3.0% of the gross sales price of the Common Stock sold in the Offering. The Agent has agreed to use its commercially reasonable efforts to sell the shares of common stock in the Offering, subject to the terms of the Agreement. The Agreement contains customary representations, warranties and covenants of the Company and Zevia LLC, and conditions to the Agent’s obligations to sell the Common Stock in the Offering. The Company and Zevia LLC have agreed jointly and severally to provide to the Agent customary indemnification and contribution rights. The Company will also reimburse the Agent for certain specified expenses in connection with establishing and maintaining the Offering. The Company hasno* obligation to sell any Common Stock under the Agreement, and* mayat any time suspend solicitation and sales in the Offering. The Agreement maybe terminated at any time, for any reason, by either the Company or the Agent upon prior notice to the other party. During the period from August 12, 2025to September 30, 2026,*the Company electednot to issue shares under this Agreement.

16. RESTRUCTURING

In* May 2024,the Company initiated certain restructuring actions designed to reduce costs and improve efficiency while continuing to invest in our brand and related initiatives (the “Productivity Initiative”). As part of the ongoing Productivity Initiative, in January 2025,the Company approved a reduction in workforce. As a result, the Company recognized $2.2 million of costs primarily related to employee termination expenses for thenine* months ended* September 30, 2025*. Restructuring charges related to the Productivity Initiative were completed as of* December 31, 2025.*

In thesecond quarter of2026, the Company initiated a restructuring plan aimed at improving the efficiency of its warehouse operations and optimizing its warehouse footprint. The plan includes transitioning to a more efficient warehouse location and streamlining related logistics activities. For thenine months ended* September 30, 2026,the Company recognized $1.0 million of costs primarily consisting of contract termination costs and freight costs to transfer inventories. These amounts are included under restructuring in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss. As of September 30, 2026* and* December 31, 2025,accrued restructuring costs of $0.1 million and $0.5 million, respectively, are included under accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheets. These expenses are expected to be substantially paid by the end of2026.*

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17. INCOME TAXES AND TAX RECEIVABLE AGREEMENT

Income Taxes

The Company is the managing member of Zevia LLC and as a result, consolidates the financial results of Zevia LLC in the accompanying unaudited condensed consolidated financial statements of Zevia PBC. Zevia LLC is a pass-through entity for U.S. federal and most applicable state and local income tax purposes following the Reorganization Transactions effected in connection with the IPO. As an entity classified as a partnership for tax purposes, Zevia LLC isnot subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Zevia LLC is passed through to its members, including the Company. The Company is taxed as a C corporation and pays corporate federal, state and local taxes with respect to income allocated from Zevia LLC based on Zevia PBC's economic interest in Zevia LLC, which was 93.2% and 89.8% as of* September 30, 2026* and* December 31, 2025*, respectively.

The provision for income taxes differs from the amount of income tax computed by applying the applicable U.S. statutory federal income tax rate of 21% to income before provision of income taxes due to Zevia LLC’s pass-through structure for U.S. income tax purposes, pass-through permanent differences, state franchise taxes, tax effects of equity-based compensation, and the valuation allowance against the deferred tax assets. Except for state franchise taxes, Zevia PBC didnot recognize an income tax expense (benefit) on its share of pre-tax book loss, exclusive of the noncontrolling interest of 6.8%, due to the full valuation allowance against its deferred tax assets (“DTAs”).

Tax Receivable Agreement

The Company expects to obtain an increase in its share of tax basis in the net assets of Zevia LLC when Class B units are exchanged by the holders of Class B units for shares of Class A common stock of the Company and upon certain qualifying transactions. Each change in outstanding shares of Class A common stock of the Company results in a corresponding change in the Company's ownership of Class A units of Zevia LLC. The Company intends to treat any exchanges of Class B units as direct purchases of LLC interests for U.S. federal income tax purposes. These increases in tax basis* mayreduce the amounts that Zevia PBC would otherwise pay in the future to various taxing authorities. They may*also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

In connection with the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) with continuing members of Zevia LLC and the shareholders of blocker companies (“Blocker Companies”) of certain pre-IPO institutional investors (the “Direct Zevia Stockholders”). In the event that such parties exchange any or all of their Class B units for Class A common stock, the TRA requires the Company to make payments to such holders for 85% of the tax benefits realized, or in some cases deemed to be realized, by the Company by such exchange as a result of (i) certain favorable tax attributes acquired from the Blocker Companies in certain mergers (including net operating losses and the Blocker Companies’ allocable share of existing tax basis), (ii) increases in tax basis resulting from Zevia PBC’s acquisition of continuing members' Zevia LLC units in connection with the IPO and in future exchanges, and (iii) tax basis increases attributable to payments made under the TRA (including tax benefits related to imputed interest). The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Company expects to benefit from the remaining 15% of any tax benefits that it* mayactually realize. The TRA payments arenot* conditioned upon any continued ownership interest in Zevia LLC or the Company. To the extent that the Company is unable to timely make payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid.

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The timing and amount of aggregate payments due under the TRA* mayvary based on a number of factors, including the amount and timing of the taxable income the Company generates each year and the tax rate then applicable. The Company calculates the liability under the TRA using a complex TRA model, which includes an assumption related to the fair market value of assets. Payments are generally due under the TRA within a specified period of time following the filing of the Company’s tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of the Secured Overnight Financing Rate plus300* basis points from the due date (without extensions) of such tax return.

The TRA provides that if (i) certain mergers, asset sales, other forms of business combinations, or other changes of control were to occur; (ii) there is a material uncured breach of any obligations under the TRA; or (iii) the Company elects an early termination of the TRA, then the TRA will terminate and the Company’s obligations, or the Company’s successor’s obligations, under the TRA will accelerate and become due and payable, based on certain assumptions, including an assumption that the Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the TRA and that any Class B units that havenot been exchanged are deemed exchanged for the fair market value of the Company’s Class A common stock at the time of termination.

As of* September 30, 2026*, the Company believes, based on applicable accounting standards, that it was more likely thannot that its DTAs subject to the TRA wouldnot be realized as of* September 30, 2026*; therefore, the Company hasnot recorded a liability related to the tax savings it* mayrealize from utilization of such DTAs. The TRA liability that would be recognized if the associated tax benefits were determined to be fully realizable totaled $59.2 million and $58.9 million at September 30, 2026* and* December 31, 2025*, respectively. The increase in the TRA liability is primarily related to Class B to Class A exchanges during thenine months ended* September 30, 2026*. If utilization of the DTAs subject to the TRA becomes more likely thannot in the future, the Company will record a liability related to the TRA, which will be recognized as an expense within its unaudited condensed consolidated statements of operations and comprehensive loss.

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18. SUBSEQUENT EVENT

Series A Preferred Stock Financing

On* October 22, 2026 (*the “Effective Date”), the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an affiliate of GP Investments, Ltd. (the “GP Investments”), pursuant to which the Company agreed to issue and sell to GP Investments in a private placement an aggregate of up to 20,000 shares of a new series of preferred stock of the Company, par value $0.001 per share, designated as “Series A Senior Convertible Preferred Stock” (the “Series A Preferred Stock”), for a purchase price of $1,000 per share.

On the Effective Date, contemporaneously with the execution of the Purchase Agreement, the Company issued and sold to GP Investments 15,000 shares of Series A Preferred Stock for an aggregate purchase price of $15.0 million. The Company has agreed to issue and sell the remaining 5,000 shares of Series A Preferred Stock to GP Investments for an aggregate purchase price of $5.0 millionno later thanfive business days following the date on which the Company files its Annual Report on Form10-K for the fiscal year ending* December 31, 2026 (or earlier at GP Investments’ election), subject to the satisfaction or waiver by GP Investments of the following conditions, among others: (i) the Company’s net sales for the fiscal year ending December 31, 2026being at least $172.5 million and (ii) the Company’s Adjusted EBITDA for such fiscal year beingno* less than negative $3.0 million. The issuance cost incurred related to this transaction is approximately $3.0 million.

Beginning on the earliest of (i) the date of the Deferred Closing, (ii) the date on which the Company files the2026 Annual Report and (iii)* April 15, 2027,*cumulative dividends accrue daily on each share of Series A Preferred Stock at a rate of 6.00% per annum on the Accreted Value (as defined in the Certificate of Designations) of such share, compounding quarterly.

In connection with the transaction, the Company contributed the proceeds from the issuance to Zevia LLC in exchange for a corresponding number of newly established Series A Senior Convertible Preferred Units, which have economic terms that substantially mirror those of the Series A Preferred Stock.