Aspire Biopharma Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

**Note 1. Description of Organization and Business **

Organization and Business

Aspire Biopharma Holdings, Inc. (the “Company” or “Aspire”) was incorporated as PowerUp Acquisition Corp., a Cayman Islands exempted company, on February 9, 2021, then domesticated to Delaware as a corporation on February 17, 2025. On February 17, 2025, the Company completed the reverse recapitalization transaction (“Reverse Recapitalization”) (see Note 3. Reverse Recapitalization) and changed its name to Aspire Biopharma Holdings, Inc.

Aspire is an early-stage biopharmaceutical company which engages in the business of developing and marketing disruptive technology for novel sublingual delivery mechanisms initially for known drugs and supplements, such as aspirin and caffeine products.

The Company has two wholly-owned subsidiaries, Aspire Biopharma Inc., a Delaware corporation, formed on October 8, 2021, and Buzz Bomb Caffeine Co. LC, a Utah LLC, formed on May 5, 2025.

Reverse Recapitalization

On August 26, 2024, the Company (then known as PowerUp Acquisition Corp.) entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”) with PowerUp Merger Sub II, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), Srirama Associates, LLC, a Delaware limited liability company (the “New Sponsor”), Stephen Quesenberry, in the capacity as the seller representative, and Aspire Biopharma, Inc., a Puerto Rico corporation.

On February 17, 2025 (the “Closing Date”), the Company consummated the reverse recapitalization transaction (the “Reverse Recapitalization”) in accordance with the terms of the Merger Agreement. In connection with the consummation of the Reverse Recapitalization, the Company changed its name from PowerUp Acquisition Corp. to “Aspire Biopharma Holdings, Inc.” (see Note 3. Reverse Recapitalization).

Reverse Stock Split

On January 16, 2026, the Company effected a 1-for-40 reverse stock split with respect to its common stock (the “Reverse Split”). All share and per share information in these unaudited condensed consolidated financial statements gives effect to this reverse stock split, including restating prior period amounts.

On May 11, 2026, the Company effected a 1-for-30 reverse stock split with respect to its common stock (the “Second Reverse Split”) (collectively with the Reverse Split, the “Reverse Splits”). All share and per share information in these unaudited condensed consolidated financial statements gives effect to the Reverse Splits, including restating prior-period amounts.

The Reverse Splits had no effect on the Company’s authorized number of shares of common stock, the par value of common stock, the public warrants outstanding, total assets, total liabilities, or stockholders’ equity (deficit). The Company restated the common stock outstanding (shares and amount) and additional paid-in capital to reflect the number of shares outstanding after the Reverse Splits.

Liquidity and Management’s Plan

The Company’s primary sources of liquidity have been cash from financing activities. As of June 30, 2026, working capital was $11,779,348 and cash and cash equivalents was $12,167,136. For the six months ended June 30, 2026, net loss was $4,491,034 and accumulated deficit totaled $31,749,115.

In February 2025, the Company received proceeds of approximately $265,827 as a result of the Reverse Recapitalization. Immediately after the consummation of the Reverse Recapitalization, the Company received $3,000,000 from the issuance of convertible notes and an additional net proceeds of $2,661,459 after partial repayment of the convertible notes and deal costs pursuant to the August 19, 2025 Securities Purchase Agreement. In February 2026, the Company entered into a Securities Purchase Agreement (see Note 7. Securities Purchase Agreement) to which it received a net payout of approximately $6,777,206 after repayment of the remaining convertible notes and deal costs under the first tranche for purchases of convertible preferred stock. The Company also entered into an ELOC agreement in November 2025, pursuant to which it can sell up to $100 million in common stock over 24 months. In April 2026, the Company closed the final tranche of the Securities Purchase Agreement and received an additional $9,000,000 after payment of applicable fees.

Management has determined that the Company’s current liquidity position is sufficient to fund its operations for at least one year after the filing of these unaudited condensed consolidated financial statements.

Note 2. Summary of Significant Accounting Policies

Please see Note 2.Summary of Significant Accounting Policiesto the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Annual Report on Form 10-K”), filed with the SEC on March 30, 2026, as amended on Form 10-K/A filed with the SEC on April 8, 2026, for a description of all significant accounting policies.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company as of June 30, 2026, and December 31, 2025, and for the three and six months ended June 30, 2026, and 2025. The Company’s condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and therefore do not include all information and footnotes necessary for a fair presentation of consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2025, which are included in the 2025 Annual Report on Form 10-K, as amended on Form 10-K/A.

The interim condensed consolidated financial statements are unaudited, and in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of results for the periods presented. The results of operations for the three and six months ended June 30, 2026, are not necessarily indicative of the results to be expected for the full year due primarily to the impact of the continued uncertainty of general economic conditions that may impact the Company’s markets for the remainder of fiscal year 2026. All intercompany accounts and transactions have been eliminated in consolidation.

Cash, Cash Equivalents and Concentrations

Cash and cash equivalents consist of short-term, highly liquid investments with an original maturity of three months or less from the date of acquisition. Certain of the Company’s cash and cash equivalents balances exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits or are invested in money market accounts with investment banks that are not FDIC-insured. The Company places its cash and cash equivalents in what it believes to be credit-worthy financial institutions. At June 30, 2026, and December 31, 2025, cash equivalents were $11,652,779 and $0, respectively. As of June 30, 2026, and December 31, 2025, the Company had $11,320,840 and $550,130, respectively, in deposits in U.S banks in excess of the FDIC limit.

Concentrations

The following table details total revenues by major geographic area for the periods presented:

One customer accounted for approximately 15% of the Company’s total revenues during the six months ended June 30, 2026. Revenue from this customer primarily related to a one-time sale and is not expected to represent a recurring source of revenue. No other customer accounted for 10% or more of the Company’s total revenues during the period.

Inventories

Inventory consisting of finished goods are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete, spoiled, or in excess of future demand. The Company records an impairment that is charged directly to cost of revenue when it determines the product is obsolete, spoiled or in excess of future demand, and the Company will not be able to sell it at a normal profit above it carrying value. During the three months ended June 30, 2026, the Company determined that $42,372 was impaired due to obsolesce and recorded the impairment to inventory write-off included in cost of revenue in the accompanying unaudited condensed consolidated statements of operations.

Recently Issued Accounting Pronouncements

On November 4, 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) 2024-03*, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-04) — Disaggregation of Income Statement Expenses (“ASU 2024-03”)*, and in January 2025, the FASB issued ASU 2025-01 —Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date(“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the statement of operations as well as disclosures about specific types of expenses included in the expense captions presented in the statement of operations. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is currently assessing the impact of this ASU; however expects to enhance expense disclosures based on the new requirements.

In December 2025, the FASB issued ASU 2025-11*– Interim Reporting (Topic 270): Narrow-Scope Improvements* (“ASU 2025-11”). ASU 2025-11 clarifies the interim reporting guidance in the Accounting Standards Codification (“ASC”), adding a comprehensive list of required interim disclosures and 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. ASU 2025-11 is effective for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating these new disclosure requirements.

All other ASUs issued and not yet effective as of June 30, 2026, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s current or future financial position or results of operations.

Note 3. Reverse Recapitalization

On August 26, 2024, PowerUp Acquisition Corp. (“PowerUp”) entered into Merger Agreement with PowerUp Merger Sub II, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), the New Sponsor, Stephen Quesenberry, in the capacity as the seller representative, and Aspire Biopharma, Inc., a Puerto Rico corporation.

On February 17, 2025 prior to the time of the consummation of the Reverse Recapitalization (the “Closing Date”), Merger Sub merged with and into Aspire Biopharma, Inc., with Aspire Biopharma, Inc. being the surviving company. After giving effect to the Reverse Recapitalization, Aspire Biopharma, Inc. became a wholly-owned subsidiary of Aspire Biopharma Holdings, Inc., a Delaware corporation (f/k/a PowerUp Acquisition Corp.) (“New Aspire”).

In accordance with the Merger Agreement, PowerUp migrated out of the Cayman Islands and domesticated as a Delaware corporation. Also, prior to the Closing Date, Aspire Biopharma, Inc. deregistered as a Puerto Rican entity and domesticated as a Delaware corporation (the “Aspire Domestication”). In connection with the Aspire Domestication, all issued and outstanding shares of Aspire’s pre-domestication voting common stock, Series A preferred stock, and any unconverted warrants automatically converted, on a one-for-one basis, into shares of the post-domesticated entity’s common stock, Series A preferred stock, and warrants, respectively.

The Reverse Recapitalization was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, PowerUp, who is the legal acquirer, was treated as the “acquired” company for financial reporting purposes and Aspire Biopharma, Inc. was treated as the accounting acquirer. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of a capital transaction in which Aspire issued stock for the net assets of PowerUp. The net assets of PowerUp will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Reverse Recapitalization will be those of Aspire Biopharma, Inc.

Transaction Proceeds

Upon the closing of the Reverse Recapitalization, the Company received gross proceeds of $811,370, offset by total transaction costs of $545,543.

The following table reconciles the elements of the Reverse Recapitalization to the unaudited consolidated statement of cash flows and the unaudited consolidated statement of changes in stockholders’ deficit:

The following table summarized the number of shares of common stock issued and outstanding immediately following the consummation of the Reverse Recapitalization:

The following table summarizes the number of Aspire Biopharma, Inc. shares after giving effect to the Reverse Splits (see Note 1. Description of Organization and Business):

Public and private placement warrants

There were 14,374,969 Public Warrants issued at the time of the PowerUp’s initial public offering, and 8,199 private placement warrants, after giving effect to the Reverse Splits (see Note 1. Description of Organization and Business), issued in connection with the private placement at the time of the PowerUp’s initial public offering (the “Private Placement Warrants”) which remained outstanding and became warrants of the Company.

Note 4. Related Party Transaction

Loan and transfer agreements

In order to finance transaction costs in connection with the Reverse Recapitalization, the New Sponsor or an affiliate of the New Sponsor, or certain affiliates of PowerUp loaned monies for working capital purposes (“Working Capital Loans”) by entering into several Loan and Transfer Agreements.

On February 17, 2025, the Company assumed $250,000 of liabilities related to the December 21, 2023, Loan and Transfer Agreement with the New Sponsor and SSVK Associates, LLC (“SSVK”). As of June 30, 2026, and December 31, 2025, there was $0 and $250,000, respectively, in borrowings outstanding under the agreement and included in loan and transfer notes payable-related on the accompanying unaudited condensed consolidated balance sheets.

On February 17, 2025, the Company assumed $50,000 of liabilities related to the January 9, 2024 Loan and Transfer Agreement with the New Sponsor and Apogee Pharma (“Apogee”). As of June 30, 2026 and December 31, 2025, there was $0 and $50,000, respectively, in borrowings outstanding under the agreement and included in loan and transfer notes payable-related party on the accompanying unaudited condensed consolidated balance sheets.

On February 17, 2025, the Company assumed $149,214 of liabilities related to the January 10, 2024 Loan and Transfer Agreement with the New Sponsor and Jinal Sheth (“Sheth”). As of June 30, 2026, and December 31, 2025, there was $0 and $149,214, respectively, in borrowings outstanding under the agreement and included in loan and transfer notes payable-related party on the accompanying unaudited condensed consolidated balance sheets.

On February 17, 2025, the Company assumed $50,000 of liabilities related to the December 3, 2024 Loan and Transfer Agreement with the New Sponsor and Apogee Pharma (“Apogee 2”). As of June 30, 2026 and December 31, 2025, there was $0 and $50,000, respectively, in borrowings outstanding under the agreement and included in loan and transfer notes payable-related party on the accompanying unaudited condensed consolidated balance sheets.

On April 14, 2026 and April 15, 2026, the Company entered into payment agreements with SSVK, Apogee and Sheth, to which the Company settled in cash the total balance of $499,214, including applicable interest and fees, owed under the Loan and transfer Agreements.

Subscription Agreements

On March 5, 2024, PowerUp entered into four separate Subscription Agreements (each, a “First Subscription Agreement”) with the New Sponsor, Visiox, VKS Capital, LLC, an affiliate of, and an entity under common control with, the New Sponsor (the “Affiliate”), and four separate investors (each, an “Investor”), whereby the Investors collectively contributed to New Sponsor a total of $1,000,000 (the “First Contribution”). The New Sponsor utilized the First Contribution to support PowerUp’s previously anticipated merger with Visiox by funding certain obligations to Visiox pursuant to the Secured Convertible Promissory Note, dated December 1, 2023, issued by Visiox to the New Sponsor (the “Visiox Convertible Note”) (together, all loans and advances, the “March Loan”).

On May 9, 2024, PowerUp entered into four separate Subscription Agreements (each, a “Second Subscription Agreement”) with the New Sponsor, the Affiliate, and four separate Investors, whereby, the Investors collectively contributed to the New Sponsor a total of $500,000 (the “Second Contribution”) and, in turn, the New Sponsor loaned $500,000 to PowerUp (the “May Loan”).

PowerUp accounted for the First and Second Subscription Agreements under ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”) and concluded that bifurcation of a single derivative that comprises all of the fair value of the conversion feature(s) (i.e., derivative instrument(s)) is not necessary under ASC 815-15-25-7 through 25-10. As a result, all debt proceeds received from Investor have been recorded using the relative fair value method of accounting under ASC 470, Debt (“ASC 470”). Pursuant to ASC 470, the Company recorded the fair value of the subscription liability on the unaudited condensed consolidated balance sheets using the relative fair value method. The initial fair value of the subscription liability at issuance was estimated using a Black Scholes and Probability Weighted Expected Return Model. At the close of the Reverse Recapitalization, 1,458 of commitment fee shares, after giving effect to the Reverse Splits (see Note 1. Description of Organization and Business), owing to the Investors under these agreements were transferred by affiliates to the Investors.

On February 17, 2025, the Company assumed $1,500,000 of debt under the First Subscription and Second Subscription Agreements. For the three and six months ended June 30, 2026, the Company incurred $0 and $250,000, respectively, in interest expense on the Subscription Agreements which is included in accrued expenses on the accompanying unaudited condensed consolidated balance sheet. In January 2026 the Subscription Agreement Loans, along with $266,917 of interest and fees, were converted into common stock of the Company. At June 30, 2026, and December 31, 2025, $0 and $1,500,000, respectively, were outstanding under these agreements and is included in subscription agreement loan balance on the unaudited condensed consolidated balance sheets.

Promissory Note Fee – related party

On October 2, 2024, after Aspire and PowerUp had signed their BCA in August 2024, PowerUp entered into a Promissory Note Fee Agreement with the Sponsor, Srirama Associates LLC (the “Promissory Note Fee Agreement”). Pursuant to the Promissory Note Fee Agreement, PowerUp and the Sponsor agreed that the Sponsor took a significant risk on behalf of the Company by entering into the Visiox Promissory Note in exchange for payment of the Original Promissory Note Fee, and that the Sponsor should be compensated for that risk despite the termination of the right to receive the Original Promissory Note Fee as a result of the termination of the proposed merger with previous target, Visiox. As consideration for the foregoing, PowerUp agreed to pay Sponsor a modified promissory note fee of $1,000,000 (the “Modified Promissory Note Fee”) upon the successful closing of a merger with Aspire.

In April 2026, Srirama Associates, LLC filed a lawsuit in the Superior Court of the State of Delaware alleging breach of contract in connection with the modified Promissory Note Fee Agreement. The complaint sought not less than $1,000,000 in damages, plus interest and costs. The Company disputed the claim and filed a motion to dismiss on May 11, 2026. On June 29, 2026, the claim was dismissed with prejudice by the Superior Court of the State of Delaware and the liability of $1,000,000 was written off and included in gain on extinguishment of debt on the unaudited condensed consolidated statements of operations.

Due to affiliate

On February 17, 2025, in conjunction with the closing of the business combination, the Company had placed on its books $353,679 of liabilities claimed by the Sponsor of PowerUp, Srirama Associates, LLC, for alleged administrative services fees. Based on the legal doctrine of res judicata (as a consequence of the above-referenced Sponsor lawsuit being dismissed with prejudice) on June 29, 2026, and after careful investigation of the alleged basis for the claimed administrative services fees, $353,679 was written off and included in gain (loss) on extinguishment of debt on the unaudited condensed consolidated statements of operations. As of June 30, 2026 and December 31, 2025, the balance of $0 and $353,679, respectively, is recorded in due to affiliate on the unaudited condensed consolidated balance sheets.

Notes payable – related party

During the years 2024 and 2023, Aspire Biopharma, Inc. incurred expenses and costs related to officer and director compensation, rental of office space, reimbursable expenses paid by affiliates and non-interest bearing working capital loans. On September 27, 2024, to formalize the related party working capital advances, Aspire Biopharma, Inc. issued three nonconvertible 20% original issues discount (“OID”) notes payable to related parties for a total face value of $1,066,391. The notes were due the earlier of June 27, 2025 (9 months from issuance), or (ii) the date that the Company receives gross proceeds of at least $2,500,000 in an offering of its debt or equity securities (a “Qualified Offering”). The notes do not bear interest but have a 5% exit fee payable on maturity or repayment. The notes had original issuance discounts totaling $213,278 and are unsecured. Pursuant to the February 18, 2025 subordination agreement between two note holders and Cobra, payments will not be made on the matured notes until full payment of the Cobra obligation (See Note 5. Convertible Notes). The balance of $591,692 on the notes payable-related party was repaid during the six months ended June 30, 2026. For the three months ended June 30, 2026, and 2025, total amortized debt discount of $0 and $68,733, respectively, and for the six months ended June 30, 2026 and 2025, total amortized debt discount $0 and $139,052, respectively, was included in interest expense on the accompanying unaudited condensed consolidated statements of operations.

On December 31, 2024, the Company issued one non-convertible 20% OID note payable for working capital to a related party for a total face value of $279,878. The note is due the earlier of September 30, 2025, (9 months from issuance); or (ii) the date that the Company receives gross proceeds of at least $2,500,000 in an offering of its debt or equity securities (a “Qualified Offering”). The note does not bear interest but has a 5% exit fee payable on maturity or repayment and had original issuance discounts totaling $46,646 and was unsecured. The balance of $293,872 on the notes payable- related party was repaid during the six months ended June 30, 2026. For the three months ended June 30, 2026, and 2025, total amortized debt discount of $0 and $4,121, respectively, and for the six months ended June 30, 2026, and 2025, total amortized debt discount of $0 and $8,379, respectively, was included in interest expense on the accompanying unaudited condensed consolidated statements of operations.

The following table reflects the total balances of the Notes payable – related party for the periods presented.

Note 5. Convertible Notes

February 2025 Securities Purchase Agreement

On February 17, 2025, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) with Cobra Alternative Capital Strategies, LLC, an entity controlled by the Company’s former Director of Investor Relations, Lance Friedman, whose services were provided through a consulting agreement with Blackstone Capital Advisors, Inc. that was terminated effective February 17, 2025, and Target Capital X LLC (collectively, the “Investors”). Under the Securities Purchase Agreement, the Company issued 20% original issue discount senior secured convertible debentures (“February 2025 Convertible Debentures,”) in an aggregate principal amount of $3,750,000 which included a 20% OID. The conversion price per share of each Debenture is equal to 92.5% of the lowest daily VWAP (as defined in the Debentures), provided that no conversion may be at a price per share less than the floor price of $4.00 per share. At the close of the Reverse Recapitalization,1,755 of commitment fee shares, after giving effects to the Reverse Splits (see Note 1. Description of Organization and Business), was due to the Investors under these agreements were transferred by Affiliates to the Investors.

The Company analyzed the Securities Purchase Agreement under ASC 480 and ASC 815 and concluded that bifurcation of a single derivative that comprises all of the fair value of the conversion feature(s) (i.e., derivative instrument(s)) is not necessary. As a result, all debt proceeds received have been recorded using the fair value method of accounting under ASC 825, Fair Value Measurement (“ASC 825”). Pursuant to ASC 825, the Company recorded the fair value of the subscription liability on the unaudited condensed consolidated balance sheet using the fair value method. The initial fair value of the subscription liability at issuance was estimated using a Monte Carlo Model. In August and September 2025, the Company repaid a total of $3,032,645 of the February 2025 Convertible Debentures. For the three and six months ended June 30, 2026, the change in fair value was $0 and $211,443, respectively. For the three and six months ended June 30, 2025, the change in fair value was $187,500 and $274,038, respectively, and is included the in the change in fair value of derivative liabilities and convertible notes on the unaudited condensed consolidated statements of operations.

In January 2026, the remaining balance of $943,801 was converted into 974 shares of Series A Convertible Preferred Stock. At June 30, 2026 and December 31, 2025, the fair value of $0 and $1,146,236, respectively, of the Securities Purchase Agreement is included in convertible notes on the accompanying unaudited condensed consolidated balance sheets.

August 2025 Securities Purchase Agreement

On August 19, 2025, the Company entered into a Securities Purchase Agreement (the “August Securities Purchase Agreement”) with certain investors (the “Purchasers”), pursuant to which the Company sold to the Purchasers certain notes in an aggregate principal amount of $9,687,500 for a subscription price of $7,750,000 (the “August 2025 Notes”) with a maturity date of February 19, 2026. The August 2025 Notes have a 20% OID of $1,937,500 which is included in the aggregate principal amount of $9,687,500 and do not bear an interest rate except for instances of default. Of the $7,750,000 total funding (before transaction expenses and debt repayments) under the Securities Purchase Agreement, $4,500,000 was funded on August 19, 2025 (the “first Tranche”), $1,000,000 was funded on September 22, 2025 (the “Second Tranche”), and the balance of $2,250,000 (the “Third Tranche”) was funded on September 30, 2025. The August 2025 Notes are convertible into up to an aggregate of 122,648 shares of common stock after giving effects to the Reverse Splits (see Note 1. Description of Organization and Business) (the “Conversion Shares”) subject to certain conditions.

During the year ended December 31, 2025, a total value of $9,523,683 of convertible notes were converted into 73,998 shares of common stock of the Company after giving effects to the Reverse Splits (see Note 1. Description of Organization and Business). The remaining debt of $163,817 was converted into 1,625 shares of common stock in January 2026 after giving effects to the Reverse Splits (see Note 1. Description of Organization and Business). At June 30, 2026, and December 31, 2025, the balance of the August 2025 Notes, net of unamortized debt discount was $0 and $144,240, respectively, and is included in convertible notes on the unaudited condensed consolidated balance sheets.

January 2026 Securities Purchase Agreement

On January 26, 2026, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain investors (the “Purchasers”), pursuant to which the Company sold to the Purchasers certain debentures in an aggregate principal amount of $2,173,913 for a subscription price of $2,000,000 (the “Debentures”) with a maturity date of April 23, 2026. The Notes have an 8% original issue discount and did bear any annual interest. The Debentures are due the sooner of (i) 90 days, or (ii) upon the Company’s receipt of gross proceeds of at least $8,000,000 in any equity or debt financing. The Company had the option to prepay this Debenture(s) at any time after the Original Issue Date at an amount equal to the Principal Amount. The Company shall provide Holder(s) with ten (10) Business Days’ prior written notice of intention to satisfy the Debentures, whether at maturity, by prepayment, or in default. The Debentures are not convertible. In connection with the financing, the Purchasers received an aggregate of 26,333 shares of the Company’s common stock as incentive shares, after giving effects to the Reverse Splits (see Note 1. Description of Organization and Business). The Debentures were repaid in February 2026. For the three and six months ended June 30, 2026, total amortized debt discounts of $0 and $173,913, respectively, was included in interest expense on the accompanying unaudited condensed consolidated statements of operations.

**NOTE 6. Commitments and Contingencies **

Registration Rights

The holders of the Private Placement Warrants and Public Warrants that may be issued upon conversion of working capital loans, if any, are entitled to registration rights pursuant to a registration rights agreement dated February 17, 2022. These holders are entitled to certain demand and “piggyback” registration rights. The Company will bear the expenses incurred in connection with the filing of any such registration statements. On May 13, 2025, the Company filed a Registration Statement on Form S-1 to register 2,441 of the outstanding 8,199 Private Placement Warrants, after giving effects to the Reverse Splits (see Note 1. Description of Organization and Business). The Registration Statement was declared effective on May 30, 2025.

Equity Line of Credit (“ELOC”) Agreement

On November 11, 2025, the Company entered into a new Purchase Agreement (the “Second ELOC Agreement”) with Arena Business Solutions AG/RA SA Ltd. (“Arena”). Under the Second ELOC Agreement, the Company has the right, but not the obligation, to direct Arena to purchase up to $100,000,000 in shares of the Company’s common stock (the “ELOC Shares”) upon satisfaction of certain terms and conditions contained in the Second ELOC Agreement, including, without limitation, an effective registration statement filed with the SEC registering the resale of the ELOC Commitment Fee Shares and additional shares to be sold to Arena from time to time under the Second ELOC Agreement.

The term of the Second ELOC Agreement began on November 11, 2025, and ends on the earlier of (i) the first day of the month following the 36-month anniversary of the execution date, (ii) the date on which the Investor shall have purchased the maximum amount of Second ELOC Shares, or (iii) the effective date of any written notice of termination delivered pursuant to the terms of the Second ELOC Agreement (the “Commitment Period”). In consideration for the execution and delivery of the Second ELOC Agreement, the Company is required to issue common shares to Arena equal to $250,000 divided by the lowest 1-Trading Day VWAP of the common shares of the five (5) Trading Days immediately preceding the effectiveness of the initial registration statement (the “Commitment Fee Shares”), plus $25,000 in common shares for fees associated with the prior ELOC Agreement with the Company, based on a price equal to the lowest 1-Trading Day VWAP of the Common Shares of the five (5) Trading Days immediately preceding the date of execution and delivery of this Agreement.

The Company issued 2,510 shares of common stock after giving effects to the Reverse Splits (see Note 1. Description of Organization and Business) to Arena in November and December 2025 and an additional 207 true up shares in January 2026, after giving effects to the Reverse Splits (see Note 1. Description of Organization and Business), representing payment of the commitment fee shares. For the three and six months ended June 30, 2026, the change in fair value totaled $275 and $865, respectively, and was included as an expense in change in fair value of derivative liabilities and convertible notes on the unaudited condensed consolidated statement of operations, there was no change in fair value for the same period of 2025. At June 30, 2026, and December 31, 2025, the fair value of the forward purchase agreement liability related to the Second ELOC Agreement totaled $96,527 and $95,662, respectively, and is included in forward purchase agreement liability on the accompanying unaudited condensed consolidated balance sheets. There were no issuances under the Second ELOC Agreement as of June 30, 2026.

Instaprin Acquisition

On March 28, 2022, the Company closed on an asset purchase agreement (“APA”) of Instaprin Pharmaceuticals, Inc.’s (“Instaprin”) intangible assets, inclusive of U.S. Patent No. 62/794141, International Publication No. 2020/15460 A1 and WO 2020/150685 A1, and the Instaprin U.S. Trademark No. 86274378, trade secrets and proprietary information, all applications for any of the foregoing, commercial and scientist relationships, and any license or agreements granting rights related to the foregoing.

The purchase price for the Acquired Assets (as defined in the APA) was $3,628,325 plus interest thereon, to be paid to the SEC on behalf of Instaprin in satisfaction of the SEC’s judgment against Instaprin and its former CEO, from sales of the product, as follows:20% from the first $5,000,000 of sales and 10% from sales thereafter until the entire contingent purchase price obligation is satisfied. Additionally, ten percent (10%) of the Company’s equity was to be delivered at Closing, in proportion to their equity holdings in the Company, to be issued to a Trustee for the former Instaprin Shareholders, along with an additional ten percent (10%) of the Company’s equity to be issued to Instaprin’s service providers, pursuant to a stock incentive plan to be adopted. As of June 30, 2026, the Company has not recorded the assets from the APA due to the contingent nature of the transaction and the Company has not yet adopted a stock incentive plan.

Purchase Agreement

On June 10, 2026, the Company entered into a purchase agreement (the “Purchase Agreement”) with FireFish TopCo, LLC (the “Seller”, and, collectively with its Subsidiaries listed in the Purchase Agreement, “Sellers”), pursuant to which (i) the Seller agreed to sell, and cause the applicable Sellers to sell, and the Company agreed to purchase or cause certain of its Affiliates to purchase, all of the equity interests in certain of Seller’s subsidiaries of the Purchase Agreement (the aforementioned equity interests, collectively, the ‘Transferred Equity Interests”, and such subsidiaries, “Transferred Entities”), free and clear of all Liens, other than the Permitted Liens and in accordance with the applicable Local Transfer Documents and (ii) the Seller agreed to sell, and cause the applicable Sellers to sell, and the Company agreed to purchase, or cause certain of its affiliates to purchase, all of the assets of the other Business Entities as defined as Transferred Entities, DUS Operating Inc. with respect to the U.S. Enterprise and Automotive Czech with respect to the KOP Enterprise constituting the balance of the Business as defined as the business of designing, manufacturing, marketing and selling automotive systems that facilitate electronic driver control and the migration toward vehicle electrification, safety, light weighting and sustainability, as conducted by the Transferred Entities on June 10,2026, and in respect to (a) Automotive Czech, the business conducted by the KOP Enterprise and (b) DUS Operating Inc., the business conducted by the U.S. Enterprise.

*Purchase Price and Consideration:*As consideration for such purchase, the Company agreed to pay the Seller (or one or more of its designated other Sellers or Affiliates) at least two (2) Business Days prior to the date of Closing (“Closing Date”) an amount equal to: (i) $30,000,000 (the “Purchase Price”) plus (ii) $800,000 in respect of deferred revenue of the Business Entities (such $800,000 representing an agreed upon fixed credit for the deferred revenue, regardless of the actual amount of the deferred revenue), minus (iii) any Income Tax obligations of the Transferred Entities net of any Income Tax receivables, minus (iv) Indebtedness of the Transferred Entities as of the closing (such final amount, the “Closing Purchase Price”). The Purchase Price will be allocated among the Transferred Entities and/or business units as set forth in the Purchase Agreement. To the extent relevant under applicable Tax Law, the Purchase Price associated with each Transferred Entity and/or business unit will be further allocated among the assets of such Transferred Entities in a manner consistent with Section 1060 of the Internal Revenue Code.

On August 6, 2026, the Company entered into an Escrow and Closing Agreement pursuant to which the parties acknowledged and agreed that all conditions to the closing of the transactions per the Purchase Agreement had been satisfied. (see Note 11. Subsequent Events)

Commitment Letter for Credit Facility

In May 2026, the Company entered into a commitment letter with a national financial institution providing for a senior secured credit facility of Aspire in an aggregate principal amount of up to $22,500,000 (the “Aspire Credit Facility”). Aspire intends to use the proceeds of the Aspire Credit Facility, if consummated, to finance the acquisition of 100% of Dura Driver Control Systems (“DCS”). The Company does not anticipate procuring any new equity raise to consummate the purchase.

The Aspire Credit Facility is expected to consist of a senior secured five-year term loan, at an interest rate equal to 325 basis points above the one-month term Secured Overnight Financing Rate. The final terms of the Aspire Credit Facility, including the senior secured term loan, will be subject to execution of definitive credit documentation and the satisfaction of customary closing conditions. During the three and six months ended June 30, 2026, $75,000 of upfront fee paid to the financial institution is included in deferred financing cost on the unaudited condensed consolidated balance sheets.

Legal Proceedings

The Company is and may be subject to various claims, lawsuits and proceedings in the ordinary course of the Company’s business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. While there can be no assurances as to the ultimate outcome of any legal proceeding or other loss contingency involving the Company, in the opinion of management, such claims are either adequately covered by insurance or otherwise indemnified, or are not expected individually or in the aggregate, to result in a material, adverse effect on the Company’s financial condition, results of operations or cash flows. However, it is possible that the Company’s results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies.

Legal Claim

In April 2026, Srirama Associates, LLC filed a lawsuit in the Superior Court of the State of Delaware alleging breach of contract in connection with the modified Promissory Note Fee Agreement. The complaint sought approximately $1,000,000 in damages, plus interest and costs. The Company disputed the claim and filed a motion to dismiss on May 11, 2026. On June 29, 2026, the claim was dismissed with prejudice by the Superior Court of the State of Delaware and the liability of $1,000,000 was written off and included in gain (loss) on extinguishment of debt in the unaudited condensed consolidated statements of operations.

**Note 7. Securities Purchase Agreement **

February 2026 Securities Purchase Agreement

On February 6, 2026, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which the Company agreed to issue and sell, in a private placement (the “Offering”), up to 25,000 shares (the “Shares”) of the Company’s newly-designated Series A Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), which Preferred Stock is convertible into shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) as more fully described in the Certificate of Designation, Preferences and Rights of the Series A Convertible Preferred Stock (the “Certificate of Designation”).

Pursuant to the Certificate of Designation on February 6, 2026, subject to Stockholder Approval (as defined below), each share of Preferred Stock is convertible at the option of the holder into shares of Common Stock at a conversion price equal to 80% of the lowest closing price of our Common Stock as of the closing of the Principal Market (as such term is defined in the Certificate of Designation) for each of the five (5) Trading Days (as such term is defined in the Certificate of Designation) immediately prior to the date of conversion, or other date of determination (but in no event less than the floor price), subject to certain adjustments as set forth in the Certificate of Designation (the “Conversion Price”). The floor price is equal to 20% of the Minimum Price (as such term is defined by the rules and regulations of The Nasdaq Stock Market LLC under Nasdaq Listing Rule 5635(d)(1)(A)) or such lower amount as permitted, from time to time, by the Principal Market (the “Floor Price”). The number of shares of Common Stock issuable upon conversion of a share of Preferred Stock shall be determined by dividing (x) the stated value of the Preferred Stock to be converted by (y) the Conversion Price.

The shares of Preferred Stock will be convertible immediately upon issuance, at the option of the holder, at the Conversion Price, subject to a conversion cap that limits the conversion of the Preferred Stock such that an Investor may not beneficially own more than 4.99% of the shares of Common Stock that would be issued and outstanding following such conversion (the “Maximum Percentage”). An Investor may decrease or increase the Maximum Percentage by written notice to the Company from time to time to any other percentage not in excess of 9.99%, provided that any increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company, provided further that a holder shall not convert any Preferred Stock to the extent that, after giving effect to such conversion, the aggregate number of shares of Common Stock issued or issuable upon conversion of the Preferred Stock would exceed 19.99% of the issued and outstanding shares of the Company’s Common Stock unless and until the Company has obtained the shareholder approval required by Nasdaq Listing Rule 5635(d) (“Shareholder Approval”).

In connection with the Offering, the Company filed a proxy statement with the United States Securities and Exchange Commission (the “Commission”) seeking the approval of its stockholders for (i) the transactions contemplated by the Securities Purchase Agreement, (ii) the issuance of the Preferred Stock and the Common Stock issuable upon the conversion of the Preferred Stock, (iii) a reverse stock split of the Company’s Common Stock at a range of one for five (1-for-5) to a maximum of one for five hundred (1-for-500) shares, whether effected in a single transaction or in multiple transactions, and all related amendments to the Company’s certificate of incorporation, and (iv) an amendment to the Company’s certificate of incorporation to effect an increase in the Company’s authorized shares to the extent required to issue the securities. The Company filed the registration statement to issue the shares on February 17, 2026. On February 24, 2026, the SEC notified the Company in writing that there will be no review of the registration statement.

In addition, the Company and each Investor entered into a registration rights agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, within fifteen (15) days following the Initial Closing, the Company shall file a resale registration statement on Form S-1 (or Form S-3 if the Company is S-3 eligible) providing for the resale by the Investors of the Registrable Securities (as defined in the Registration Rights Agreement) and to use its best efforts to cause such resale registration statement to be declared effective by the staff of the Commission within forty five (45) days following the Initial Closing, or within sixty five (65) days in the event of a review by the Commission.

Pursuant to the Securities Purchase Agreement, the Investors have the right to appoint one (1) director to our Board of Directors. The Securities Purchase Agreement and Registration Rights Agreement contain certain representations and warranties, covenants and indemnities customary for similar transactions. The representations, warranties and covenants contained in the Securities Purchase Agreement and Registration Rights Agreement were made solely for the benefit of the parties to the Securities Purchase Agreement and Registration Rights Agreement and may be subject to limitations agreed upon by the contracting parties.

Series A Convertible Preferred Stock Issuance

Pursuant to the terms of the February 2026 Securities Purchase Agreement, on February 2, 2026, the Company filed the certificate of designation (the “Certificate of designation”) with The Delaware Secretary of State designating,25,000 shares of authorized and unissued preferred stock as Series A Convertible Preferred Stock. At the close of the first tranche, the company recorded $9,894,920 as Series A Convertible Preferred Stock, representing total issuance of $13,749,980 net of related costs of $3,855,060. On February 6, 2026,13,750 shares of Series A Convertible Preferred Stock were issued at the close of the first tranche.

On April 13, 2026, the Company filed the further amendment to the Certificate of designation with the Delaware Secretary of State designating,30,000 shares of the authorized and unissued preferred stock as Series A Convertible Preferred Stock. On April 13, 2026,12,500 additional shares were issued at the close of tranche 2 of the February 2026 Securities Purchase Agreement and the Company recorded $9,000,000 as Series A Convertible Preferred Stock, representing total issuance of $10,000,000 net of related costs of $1,000,000. The Certificate of Designation sets forth the rights, preferences and limitations of the shares of Preferred Stock. Terms not otherwise defined in this item shall have the meanings given in the Certificate of Designation.

During the three months ended June 30, 2026, holders of the preferred stock converted 9,200 shares of Series A Convertible Preferred Stock into 1,122,764, shares of common stock. The Company had 17,050 shares of Series A Convertible Preferred Stock outstanding at June 30, 2026.

The following is a summary of the terms of the Preferred Stock:

Conversion

Pursuant to the Certificate of Designation, each share of Preferred Stock, subject to the Stockholder Approval (as defined in the Certificate of Designation), is convertible at the option of the holder into shares of common stock at a conversion price equal to 80% of the lowest closing price of our Common Stock as of the closing of the Principal Market (as such term is defined in the Certificate of Designation) for each of the five (5) Trading Days (as such term is defined in the Certificate of Designation) immediately prior to the date of conversion, or other date of determination (but in no event less than the floor price), subject to certain adjustments as set forth in the Certificate of Designation (the “Conversion Price”). The floor price is equal to 20% of the Minimum Price (as such term is defined by the rules and regulations of the Nasdaq Stock Market LLC, Rule 5635(d)(1)(A)) (or such lower amount as permitted, from time to time, by the Principal Market (the “Floor Price”). The number of shares of common stock issuable upon conversion of a share of Preferred Stock shall be determined by dividing (x) the stated value of the Preferred Stock to be converted by (y) the Conversion Price.

The shares of Preferred Stock will be convertible immediately upon issuance, at the option of the holder, at the Conversion Price, subject to a conversion cap that limits the conversion of the Preferred Stock such that an Investor may not beneficially own more than 4.99% (the “Maximum Percentage”) of the shares of common stock that would be issued and outstanding following such conversion. An Investor may decrease or increase the Maximum Percentage by written notice to the Company from time to time to any other percentage not in excess of 9.99%, provided that any increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered to the Company, provided further that a holder shall not convert any Preferred Stock to the extent that, after giving effect to such conversion, the aggregate number of shares of common stock issued or issuable upon conversion of the Preferred Stock would exceed 19.99% of the issued and outstanding shares of the Company’s common stock unless and until the Company has obtained the shareholder approval required by Nasdaq Listing Rule 5635(d).

Ranking

The Series A shall rank (i) senior to all of the common stock; (ii) senior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms junior to any Series A (“Junior Securities”); (iii) on parity with any class or series of capital stock of the Corporation created specifically ranking by its terms on parity with the Preferred Stock (“Parity Securities”); and (iv) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms senior to any Series A (“Senior Securities”), in each case, as to dividends or distributions of assets upon liquidation, dissolution, winding up of the Corporation, whether voluntarily or involuntarily. Subject to any superior liquidation rights of the holders of any Senior Securities of the Corporation and the rights of the Corporation’s existing and future creditors, upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), each Holder shall be entitled to be paid out of the assets of the Corporation legally available for distribution to stockholders, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation to the holders of the Common Stock and Junior Securities and pari passu with any distribution to the holders of Parity Securities, an amount equal to the Stated Value for each share of Series A held by such Holder plus an amount equal to any accrued and unpaid dividends thereon, and thereafter the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder of Common Stock would receive if the Series A were fully converted (disregarding for such purposes any conversion limitations hereunder) to common stock which amounts shall be paid pari passu with all holders of common stock. The Corporation shall mail written notice of any such Liquidation, not less than sixty (60) days prior to the payment date stated therein, to each Holder.

Price Protection

Except for any Exempt Issuance, in the event the Corporation issues or sells any securities including options or convertible securities (or amends any outstanding securities of the Company), at an effective price of, or with an exercise or conversion price of less than the conversion price, then upon such issuance or sale, the conversion price shall be reduced to the lesser of (i) the Floor Price; or (ii) the sale price or the exercise or conversion price of the securities issued or sold. In case any shares of common stock, convertible securities or options are issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction, each share of common stock underlying any such convertible securities or options shall be deemed to be one additional share of common stock for the purposes of determining the effective price of the non-Exempt Issuance.

Participation Rights

Subject to certain terms and conditions in the Certificate of Designation, until the six (6) month anniversary of the issuance of the Series A to the Holder, upon any subsequent financing, the Holders of the outstanding Series A shall have the right to participate in an amount equal to an aggregate of 30% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing.

Note 8. Stockholders’ equity (deficit)

Preferred Stock—The Company is authorized to issue 10,000,000 shares of Preferred Stock with a par value of $0.0001 per share and with such designations, voting and other rights and preferences as may be determined from time to time by the Board. At June 30, 2026 and December 31, 2025,30,000 and 0, respectively, were designated as Series A Convertible Preferred Stock.

Series A Convertible Preferred Stock—The Company is authorized to issue 30,000 shares of Series A Convertible Preferred Stock with a par value of $0.0001 per share and with such designations, voting and other rights and preferences as may be determined from time to time by the Board. At June 30, 2026 and December 31, 2025, there were 17,050 and 0 shares of Series A Convertible Preferred Stock issued or outstanding, respectively.

Common Stock— The Company is authorized to issue 490,000,000 shares of Common Stock with a par value of $0.0001 per share. As of June 30, 2026, and December 31, 2025, there were 1,295,234 and 117,780 shares of common stock issued and outstanding, respectively, after giving effects to the Reverse Splits (see Note 1. Description of Business and Organization).

PowerUp Warrants

As part of the PowerUp IPO, PowerUp issued warrants to third-party investors where 1,200 warrant entitles the holder to purchase one share of the Company’s Class A common stock at an exercise price of $13,800 per share (the “Public Warrants”) after giving effect to the Reverse Splits (see Note 1. Description of Business and Organization). Simultaneously with the closing of the IPO, PowerUp completed the private sale of 8,199 warrants (the “Private Placement Warrants”), after giving effect to the Reverse Splits (see Note 1. Description of Business and Organization), where each warrant allows the holder to purchase one share of the Company’s Common Stock at $13,800 per share, after giving effect to the Reverse Splits (see Note 1. Description of Business and Organization)). At June 30, 2026, there are 14,374,696 Public Warrants and 8,199 Private Placement Warrants after giving effects to the Reverse Splits (see Note 1. Description of Business and Organization)

At December 31, 2025, there are 14,374,969 Public Warrants and 8,199 Private Placement Warrants outstanding after giving effects to the Reverse Splits (see Note 1. Description of Business and Organization).

The Public Warrants became exercisable 30 days after the consummation of the Reverse Recapitalization.

Upon the warrants becoming exercisable, the Company may redeem the warrants:

● in whole and not in part;

● at a redemption price of $12 per warrant;

● upon not less than 30 days’ prior written notice of redemption, to each warrant holder; and

if, and only if, the reported last sale price of the Company’s Common Stock equals or exceeds $21,600 per share (as adjusted for share subdivisions, share consolidations, share capitalizations, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders.

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO, except that the Private Placement Warrants and the common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable, or saleable until 30 days after the completion of a Reverse Recapitalization, subject to certain limited exceptions.

The Company has determined that Public Warrants and the Private Placement Warrants issued in connection with its IPO in February 2022 are subject to treatment as equity. Upon the closing of the Reverse Recapitalization, in accordance with the guidance contained in ASC 815, the warrants continue to be classified as equity.

Stock based compensation

On February 29, 2024, Aspire Biopharma, Inc. entered into a Corporate Advisory Agreement with an advisory firm, pursuant to which the advisory firm will receive 6% of the amount of shares outstanding after the close of the Reverse Recapitalization as compensation for advisory services to support the Company’s efforts related to the Reverse Recapitalization. On January 3, 2025, the agreed upon compensation was reduced to 4.75% of the amount of shares outstanding after the close of the Reverse Recapitalization (see Note 3. Reverse Recapitalization). In February 2025,1,385 shares of the 29,167 Reverse Recapitalization shares after giving effects to the Reverse Splits (see Note 1. Description of Business and Organization) were issued to the affiliated company under this agreement. The issuance of these shares to the service advisors is subject to ASC 718. Under ASC 718, compensation associated with equity-classified awards is measured at fair value upon the grant date. The shares were granted subject to a performance condition (i.e., the occurrence of a Reverse Recapitalization).

Stock-based compensation expense which is included in general and administrative expenses on the unaudited condensed consolidated statement of operations was $157,000 for both the three and six months ended June 30, 2026, respectively. Upon consummation of the Reverse Recapitalization stock-based compensation was $0 and 14,131,250 for the three and six months ended June 30, 2025, respectively, based on the grant date fair value per share. The fair value was determined by applying a 15% discount for lack of marketability to the market price of the shares on date of grant.

Aspire Biopharma Inc. warrants

During the year ended December 31, 2024, Aspire Biopharma, Inc. issued 44,000,000 warrants at a per share price of $0.40. As of December 31, 2024, there were 91,500,000 warrants outstanding and all were fully vested. On January 21, 2025, the 91,500,000 warrants were converted into 91,500,000 shares of Aspire Biopharma Inc. common stock, on the Reverse Recapitalization date, and subsequently converted into 4,780 shares of common stock of the Company after giving effects to the Reverse Splits (see Note 1. Description of Business and Organization).

Other Share issuances

On April 28, 2025, in connection with the Settlement Agreement, the Company issued 521 shares of common stock after giving effect to the Reverse Splits (see Note 1. Description of Business and Organization to Blackstone Capital Advisors, Inc. or its designees. (See Note 5. Convertible Notes)

During the year ended December 31, 2025, a total value of $9,523,683 of Convertible Notes were converted into 73,998 shares of common stock of the Company after giving effects to the Reverse Splits (see Note 1. Description of Business and Organization). The remaining debt of $163,817 was converted into 1,625 shares of common stock in January 2026 after giving effect to the Second Reverse Split (see Note 1. Description of Business and Organization).

As stated inNote 6. Commitments and Contingencies, In January 2026, the Company issued 207 true up shares to Arena after giving effect to the Second Reverse Split (see Note 1. Description of Business and Organization).

As stated inNote 5. Convertible Notes, The Company issued 26,333 shares of common stock as incentive to the Investors for entering into the January 2026 Share Purchase Agreement after giving effect to the Second Reverse Split (see Note 1. Business Description and Organization).

On April 7, 2026, the Company issued 5,000 shares of common stock, after giving effect to the Second Reverse Split (see Note 1. Business Description and Organization), to a consultant pursuant to a consulting agreement.

Exchange Agreements

On January 1, 2026, the Company entered into Exchange Agreements (the “Exchange Agreements”) with certain holders of the Company’s subscription agreement loans (the “Holders”) to exchange approximately $1,750,000 in debt for shares (the “Exchange Shares”) of the Company’s common stock (the “Exchange”) (see Note 4. Related Party Transactions). The debt was incurred by the Company’s predecessor, PowerUp pursuant to subscription agreements dated March 5, 2024, and May 9, 2024. The Holders were Sponsors of PowerUp’s initial public offering.

Pursuant to the Exchange Agreements, the Holders may, in their discretion, submit a notice of exchange setting forth the Exchange Amount, the Exchange Shares, and the applicable Exchange Price. Within one business day of receipt of an Exchange Notice, the Company will issue to such Holder the number of Exchange Shares equal to the Exchange Amount divided by the Exchange Price, and such Exchange Amount shall be deducted from the Outstanding Balance. Each Holder may submit up to four (4) Exchange Notices, but each Exchange Notice may not exchange more than thirty percent (30%) of the applicable Holder’s Outstanding Balance.

In addition, upon a financing in excess of $3,000,000 (a “Financing”), the Company may repay part or all of any Holder’s Outstanding Balance. Upon a Financing, a Holder may elect to receive cash proceeds from any Financing in an amount equal to twenty five percent (25%) of such Holder’s Outstanding Balance, to be applied to such Holder’s Outstanding Balance. If a Holder elects to require any part of its Outstanding Balance to be repaid from the proceeds of a Financing, it can elect to receive up to 33.33% of the aggregate proceeds of such Financing.

In January 2026, pursuant to the Exchange Agreements, the Subscription Agreement Loan balances along with applicable interest were converted into 21,525 shares of common stock of the Company after giving effect to the Reverse Splits (see Note 1. Description of Business and Organization).

Note 9. Fair Value Measurements

The following table presents the Company’s fair value hierarchy assets and liabilities that are measured at fair value on a recurring basis at June 30, 2026 and December 31, 2025 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value.

Convertible notes

As discussed inNote 5. Convertible Notes, the February 2025 Convertible Debentures are classified and accounted for as a financial liability which is measured at fair value on a recurring basis (one of the instruments is accounted for at fair value on a recurring basis under ASC 480-10, as a derivative instrument under ASC 815).

The financial liabilities are valued under a Monte Carlo Model. The estimated fair value of the financial liabilities component is determined using Level 3 inputs. Inherent in the pricing models are assumptions related to expected share-price volatility, expected life and risk-free interest rate.

The significant inputs of the models used to value the Company’s February 2025 Convertible Debentures as of December 31, 2025 were:

The change in the fair value of the February 2025 Convertible Notes measured using Level 3 inputs is summarized as follow:

Forward purchase agreement liabilities

As discussed inNote6*. Commitment and Contingencies*, the forward purchase agreement liabilities are classified and accounted for as financial liabilities which are measured at fair value on a recurring basis.

The forward purchase agreements liabilities are valued under a Probability Weighted Expected Return Model (“PWERM”) which fair values reportable capital investment and uses a Black Scholes Model that fair values the conversion features within the convertible debt. The PWERM is a multistep process in which value is estimated based on the probability-weighted present value of various future outcomes. The estimated fair value of the forward purchase agreements liabilities are determined using Level 3 inputs. Inherent in the pricing models are assumptions related to expected share-price volatility, expected life and risk-free interest rate.

The significant inputs of the models used to value the forward purchase agreement liabilities as of June 30, 2026 and December 31, 2025 were:

The change in the fair value of the forward purchase agreement liabilities measured using Level 3 inputs is summarized as follows:

Derivative liability

As discussed inNote 5. Convertible Notes, the Company accounted for the August 2025 Notes under ASC 470 and ASC 815 and concluded that bifurcation of multiple embedded features was necessary under ASC 815-15-25-1. As a result, the Company separately accounted for it as a single compound derivative. The initial fair value of the derivative liability at issuance was $4,101,583 and estimated using a Monte Carlo Model. In January 2026, the remaining balance of $163,817 of the convertible notes was converted into 1,625 shares of common stock after giving effects to the Reverse Splits (see Note 1. Business Description and Organization). For the three and six months ended June 30, 2026, change in fair value of the derivative liability of $0 and $40,954 was recorded as an income on the unaudited condensed consolidated statements of operations, respectively. At June 30, 2026 and December 31, 2025, the fair value of the derivative of $0 and $40,954, respectively, was included in derivative liability on the accompanying unaudited condensed unaudited condensed consolidated balance sheet.

The change in the fair value of the derivative liability measured using Level 3 inputs is summarized as follows:

The significant inputs of the models used to value the Company’s derivative liability as of December 31, 2025, were:

Note 10. Segments

The Company determines its operating segments in accordance with FASB ASC 280,Segment Reporting (“ASC 280”). ASC 280 defines operating segments as components where discrete financial information is regularly reviewed by the chief operating decision maker (“CODM”), which for the Company is the Chief Executive Officer, to determine resource allocation and assess performance. As such, based on the way the CODM monitors and makes decisions affecting operations, the Company has concluded that it has one operating and reportable segment. The CODM is regularly provided with only the consolidated expenses as noted on the face of the condensed consolidated statements of operations. As the Company has only one operating segment and is managed on a consolidated basis, the measure of profit or loss is consolidated net income or loss. The metrics are used to review operating trends, to perform analytical comparisons between periods and to monitor budget to actual variances. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several key metrics included in net loss, which include the following:

All other segment items included in net loss are reported on the unaudited condensed consolidated statements of operations and described within their respective disclosures.

**Note 11. Subsequent Events **

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the unaudited condensed consolidated financial statements were issued. Based upon this review, other than disclosed below or within these unaudited condensed consolidated financial statements, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

Conversion of Preferred Stock and Effects on Stockholders’ Equity

In July 2026, certain holders of the Series A Convertible Preferred Stock converted 850 shares at a conversion price of $7.92 into 107,323 shares of common stock.

Purchase Agreement

On June 10, 2026, the Company entered into a purchase agreement (“Purchase Agreement”) with FireFish Topco LLC (the “Seller and collectively with its Subsidiaries as identified in the Purchase Agreement, “Sellers”) pursuant to which the Company purchased all of the equity interests in certain of the Seller’s subsidiaries and all of the assets and liabilities of other Business Entities (see Note 6. Commitments and Contingencies) for an amount equal to (i) $30,000,000 the Purchase Price plus (ii) $800,000 in respect of deferred revenue of the Business Entities minus (iii) any income tax liabilities of the Transfer Entities minus (iv) indebtedness of the Transfer Entities and was funded with cash on hand. The closing date of the acquisition was August 6, 2026. (see below Escrow and Closing Agreement and Working Capital Financing: Note Purchase Agreement).

On August 6, 2026, the Company entered into an Escrow and Closing Agreement (see below) pursuant to which the parties acknowledged and agreed that all conditions to the closing of the transactions per the Purchase Agreement had been satisfied.

As a result of the limited time since the acquisition date and the effort required to conform the financial statements to the Company’s practices and policies, the initial accounting for the business combination is incomplete at the time of this filing. As a result, the Company is unable to provide the amounts recognized as of the acquisition date for the major classes of assets acquired and liabilities assumed.

Escrow and Closing Agreement

On August 6, 2026, the Company and FireFish TopCo, LLC (the “Seller”) entered into an Escrow and Closing Agreement (the “Closing Agreement”), pursuant to which the parties acknowledged and agreed that all conditions to the closing of the transactions contemplated by the Purchase Agreement (seeNote 6. Commitments and Contingencies) (the “Closing”) had been irrevocably satisfied or irrevocably waived by the party entitled to the benefit thereof, and that all Transaction Documents, certificates and other deliverables required to effect the Closing (collectively, the “Closing Documents”) had been duly executed and irrevocably delivered by the parties and were being held in escrow by the parties (or their respective counsel) pending automatic release as described below.

According to the Closing Agreement, the Closing Documents will be automatically released from escrow without any further action, and the Closing will be deemed to occur automatically and without any further action, immediately upon payment by the Company to the Seller of the Closing Purchase Price in accordance with the closing statement delivered by the Seller to the Company on July 28, 2026 under the Purchase Agreement.

The Company has agreed to immediately pay the Closing Purchase Price to the Seller upon receipt of funds from its debt financing source (the “Financing”). The Closing Agreement provides that the Financing is not, and was not, a condition to the Closing, that the Seller entered into the Closing Agreement as an accommodation to the Company and without prejudice to the Seller’s rights (including its right to terminate the Purchase Agreement pursuant to Section 9.01(c) or Section 9.01(e) thereof to the extent the Closing does not promptly occur after July 31, 2026), and that the Company will use reasonable best efforts to obtain the Financing so as to enable it to pay the Closing Purchase Price as promptly as possible.

Working Capital Financing; Note Purchase Agreement

On July 31, 2026, the board of directors of the Company (the “Board”) adopted resolutions by written consent authorizing the Company to issue convertible promissory notes (the “Notes”) pursuant to a Convertible Promissory Note Purchase Agreement, dated as of August 6, 2026 (the “Note Purchase Agreement”), by and among the Company and the investors named therein (the “Investors”). Pursuant to the Note Purchase Agreement, the Company will issue and sell to the Investors Notes in an aggregate principal amount of $3,750,000, for an aggregate purchase price of $3,000,000, reflecting an original issue discount of 20% (the “Working Capital Transaction”). The proceeds of the Working Capital Transaction are intended to provide additional working capital for the Company’s business and to allow for flexibility to pursue future growth opportunities that the Company may identify in the future.

The Board ratified, confirmed, consented to and approved the Company’s entry into the Note Purchase Agreement and authorized the Company’s officers to negotiate, execute, deliver and perform the Note Purchase Agreement and related ancillary documents, and to issue the Conversion Shares (as defined below) upon conversion of the Notes.

The Notes are convertible into shares of the Company’s common stock, par value $0.0001 per share (the “Conversion Shares”), in accordance with the terms of the Notes. The conversion price applicable to the Notes is $8.00 per share.

RBW Capital Partners LLC acted as exclusive financial advisor to the Company in connection with the foregoing transactions. Any securities or brokerage services were offered through Dawson James Securities, Inc. RBW received a placement agency fee equal to 8% of the purchase price and non-accountable expenses in the amount of 1%.

Management Services Agreement

A Management Services Agreement (the “Agreement”) was entered into on May 10, 2026, between the Company and Lakewood Capital, LLC (“Lakewood”) becoming effective on the closing date of the acquisition of the Drivers Control Systems (“DCS”) business of Dura Automotive (the “Dura Transaction”), August 6, 2026, (the “Effective Date”) (see Escrow and Closing Agreements above). The term of the Agreement is for a period of five years from the Effective Date.

The Management Services to be provided during the term of the Agreement include consultation in connection to the DCS operations with respect to the development and implementation of strategies for improving operating, engineering, manufacturing, marketing, and/or financial performance of the Company, its subsidiaries or affiliates. In consideration of the Management Services, the Company will pay Lakewood a closing fee of $500,000 and reimbursement of out-of-pocket expenses not to exceed $200,000 in connection with closing the Dura Transaction. Additionally, the Company will pay Lakewood an aggregate annual management fee equal to 5% of Adjusted EBITDA which means for any period, consolidated earnings before interest, taxes, depreciation, and amortization adjusted to exclude extraordinary items, non-recurring items and other agreed upon items, with an annual cap of $1,000,000 ( the “Annual Management Fee”) with quarterly payments of $250,000 paid (January 1, April 1 and July 1) with final payment on October 1 to be approved by the audit committee of the Board of Directors equal to the difference between 5% Adjusted EBITDA and the $750,000 already paid.

In addition, Lakewood will receive 15% of the equity of DCS within 10 days upon the closing of the DCS Transaction, that vests monthly over a two-year period which is currently estimated at approximately $4,500,000 based on the purchase price of $30,000,000. Lakewood also has the opportunity to receive additional liquidity for DCS by receiving a staggered (tranche-based) put option on its 15% of the DCS equity. No exercise of the put may be effected during the first two years after the closing of the Dura Transaction. After the end of year two, Lakewood has the option to sell up to 5% of the DCS equity in any twelve month period subject to a ninety day notice. The put would be payable in cash or Company stock or a combination thereof that would be mutually acceptable to both Lakewood and the Board. The same terms would be applicable to each subsequent year as long as no put exceeds 5% of DCS equity. Valuation of DCS in connection with exercising a put option will be calculated by using a pro-rata share of EBITDA generated by DCS adjusted for certain market adjustments. After adjusting for debt, Lakewood would be able to exercise their put option at a 15% discount to the implied equity value of the DCS subsidiary.