BUDA JUICE, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025

Buda Juice, Inc. (the Company) was originally formed as a limited liability company, Buda Juice LLC (the “Predecessor”), in Dallas, Texas, under the laws of the State of Texas in October 2013. On January 1, 2026, the Company completed a statutory conversion (the “Conversion”) from a Texas limited liability company into a Delaware corporation, Buda Juice, Inc. (the “Successor”), and elected to be taxed as a C corporation for U.S. federal income tax purposes.

After the Conversion, Buda Juice, Inc. exists as a Delaware corporation, continuing as the same entity for all legal purposes, with all of rights, privileges, and obligations of the Buda Juice, LLC preserved without the need to wind up its affairs.

The Company’s unaudited condensed financial statements reflect a Predecessor/Successor presentation due to the statutory conversion of the Company from a limited liability company to a corporation on January 1, 2026.

On January 9, 2026, the Company completed its initial public offering (“IPO”) and its common stock began trading on the NYSE American under the ticker “BUDA”.

The Company operates in a highly competitive beverage industry, focused on fresh, cold-crafted juice production for business-to-business (B2B) distribution. The Company mostly utilizes third-party delivery systems and serves primarily large, national chain grocery stores.

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with the instructions to Regulation S-X and do not include all the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The Company has made estimates and judgments affecting the amounts reported in the Company’s unaudited condensed financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed financial information is unaudited but reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2025, which includes additional information on our significant accounting policies outlined in Note 2 – Summary of Significant Accounting Policies, as well as the methods and assumptions used in our estimates for the years ended December 31, 2025 and 2024. The balance sheet as of December 31, 2025, was derived from the Company’s audited 2025 financial statements.

The results of operations for the six months ended June 30, 2026, are not necessarily indicative of the results that may be expected for the full year ended December 31, 2026.

The accompanying financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the financial statements.

Cash and Cash Equivalents

Cash and cash equivalents include all short-term, highly liquid instruments with original maturities of three months or less at the time of purchase. Our cash accounts are maintained at various high-credit-quality financial institutions and may exceed federally insured limits. We have not experienced any losses in such accounts. As of June 30, 2026, cash balances exceeded the Federal Deposit Insurance Corporation (FDIC) insured limits by approximately $18,583. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk with respect to its cash balances.

Fair Value Measurements

We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in our financial statements. We categorize assets and liabilities, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below. The three levels of the hierarchy are defined as follows:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are both unobservable and significant to the overall fair value measurements reflecting an entity’s estimates of assumptions that market participants would use in pricing the asset or liability.

Our balance sheets include cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities, for which the carrying amounts approximate fair value due to their short-term maturity. As of the reporting date, the Company did not have any financial instruments measured at fair value on a recurring basis or any variable-rate credit facilities.

IPO and related transactions

On January 9, 2026, the Company completed its IPO of 2,666,667 shares of common stock at a public offering price of $7.50 per share. In connection with the IPO, the Company received gross proceeds of $20,000,003.

Concurrently with the closing of the IPO, the Company used a portion of the IPO proceeds to redeem 500,000 shares of its outstanding common stock for cash at a redemption price of $7.50 per share, for an aggregate payment of $3,750,000 (the “Redemption”). The redeemed shares were moved to treasury stock upon redemption therefore remain issued but are no longer outstanding.

On January 20, 2026, the underwriter exercised its right to issue an additional 15% of shares issued, or 399,999 shares, with gross proceeds to the Company of $2,999,993.

Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Diluted EPS is computed by including both the weighted average number of shares outstanding and any dilutive common share equivalents in the denominator.

Prior to the Company’s initial public offering and conversion to a C-Corporation, the Company operated as a limited liability company. As a result, the Company did not have any shares of common stock outstanding during the six months ended June 30, 2025. Accordingly, basic and diluted EPS have not been presented for the prior-year period.

The Company has outstanding warrants to purchase 306,667 shares of common stock, which are excluded from basic EPS and included in diluted EPS using the treasury stock method, if dilutive.

The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net income per common share (in thousands, except per share data):

Stock-based Compensation

On February 4, 2026, the Board approved the 2025 Executive Incentive Award Plan (the “2025 Equity Plan”). Effective April 1, 2026, the Company granted restricted stock units (“RSU’s”) to certain directors, officers, employee’s, and strategic consultants that will begin to vest on January 7, 2027 according to the award vesting schedule, generally in equal installments over a maximum of three years.

The grant-date fair value of the RSUs was determined based on the closing market price of the Company’s common stock on April 1, 2026 of $10.50 per share. Total grant-date fair value associated with the award was approximately $15,854 (in thousands).

The Company recognizes stock-based compensation expense for RSU awards on a straight-line basis over the requisite service period. During the three and six months ended June 30, 2026, the Company recognized stock-based compensation expense related to this award of $213. As of June 30, 2026, unrecognized compensation cost related to unvested RSUs was $15,642, which is expected to be recognized over a weighted-average period of approximately 2.5 years (in thousands).

Segment Information

The Company operates as a single reportable segment under ASC 280, Segment Reporting. The Company’s chief operating decision maker (CODM) is the Board of Directors (BOD), which includes the chief executive officer and executive chairman of the BOD. The CODM reviews financial information on a basis for purposes of allocating resources and evaluating financial performance.

The Company derives revenues primarily from its product line of cold-crafted citrus-based beverages, which are mostly sold directly to large grocery chains via third party delivery services.

Factors Used to Identify Reportable Segments

The Company has one reportable segment, as business activities are managed on a consolidated basis. Revenues are derived exclusively in the United States.

Measurement of Segment Profit or Loss

The accounting policies of the segment are consistent with those described in Note 2 (Summary of Significant Accounting Policies). The CODM assesses performance and allocates resources based on net income, which is the same as net income reported in the statements of operations. The CODM uses net income to evaluate return on assets, decide on reinvestments or dividends, monitor budget versus actual results, and benchmark against competitors. This measure also informs management compensation decisions.

The Company does not have intra-entity sales or transfers.

Segment Information

The following table presents information about reported segment revenue, significant segment expenses, and profit or loss for the six months ended June 30, 2026 and 2025:

The segment’s net income reconciles directly to the Company’s net income, with no adjustments required. Segment assets are measured as total assets, which were $23,808 as of June 30, 2026, and $4,970 as of December 31, 2025 (in thousands).

Revenues by Product or Service

Although the Company operates in one segment, revenues from external customers are disaggregated by major product lines as follows:

Geographic Information

Revenues are attributed to geographic areas based on customer location. Long-lived assets are attributed based on physical location. All revenues and assets as are derived in the United States and are presented as such in the statements of operations and balance sheets.

Major Customers

For the six months ended June 30, 2026 and 2025, revenues from one customer represented approximately $7,145 (90% of total revenues) and $6,341 (97% of total revenues), respectively. No other customer accounted for 10% or more of total revenues.

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued guidance to improve the disclosure of expenses in commonly presented expense captions. The new guidance requires a public entity to provide tabular disclosure, on an annual and interim basis, of amounts for the following expense categories: (1) purchases of inventory, (2) employee compensation, (3) depreciation and (4) intangible asset amortization, as included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement that contains any of the expense categories noted. Additionally, on an annual and interim basis, a qualitative description is required for amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. The guidance also requires certain amounts that are currently required to be disclosed to be included in the same tabular disclosure as these disaggregation requirements. Furthermore, on an annual and interim basis, a public entity is required to separately disclose selling expenses and annually, disclose a description of the selling expenses. The guidance is effective for 2027 annual reporting, and in the first quarter of 2028 for interim reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. We will adopt the guidance when it becomes effective, in our 2027 annual reporting and each quarter thereafter, on a prospective basis.

In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures. On an annual basis, the new guidance requires a public entity to disclose: (1) specific categories in the rate reconciliation, (2) additional information for reconciling items that are equal to or greater than 5% of the amount computed by multiplying income (or loss) from continuing operations before income tax expense (or benefit) by the applicable statutory income tax rate, (3) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, with foreign taxes disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5% of total income taxes paid, (4) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (5) income tax expense (or benefit) from continuing operations disaggregated between federal (national), state and foreign. The guidance is effective for fiscal year 2025 annual reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. The Company is subject to the provisions of ASC 740, Income Taxes, however, because the Company was a pass-through entity as of December 31, 2025, the disclosures required by ASU 2023-09 related to income tax expense, effective tax rate reconciliation, and cash taxes paid are not applicable. However, the Company will adopt the guidance in our future reporting due to the statutory conversion to a C-Corp effective January 1, 2026.

Accounts receivables are recorded at the invoiced amount and do not bear interest. The Company evaluates the collectability of its accounts receivable on an ongoing basis. As of June 30, 2026, management determined that all receivables were fully collectible; therefore, no allowance for doubtful accounts has been recorded.

For the six months ended June 30, 2026 and 2025, the Company derived a significant portion of its revenue from a limited number of customers which is disclosed in Note 2 – Segment Information. The Company does not require collateral and maintains credit policies intended to reduce overall credit risk.

Management monitors customer creditworthiness and believes the concentration does not represent a significant credit risk due to the financial strength of these customers and their payment history.

Allowance for Credit Losses

Customer accounts receivable are stated at the amount management expects to collect on balances. The Company accounts for credit losses in accordance with ASC Topic 326, Financial Instruments – Credit Losses (“ASC Topic 326”). ASC 326 impacts the impairment model for certain financial assets measured at amortized cost by requiring a current expected credit loss (“CECL”) methodology to estimate expected credit losses over the entire life of the financial asset, recorded at inception or purchase. The Company has the ability to determine if there are no expected credit losses in certain circumstances. We evaluate the credit worthiness of our portfolio on an individual loan basis and on a portfolio basis. The allowance is subjective as it requires material estimates, including such factors as historical trends, known and inherent risks in the loan portfolio, adverse situations that may affect borrowers’ ability to repay and current economic conditions. Other qualitative factors considered may include items such as uncertainties in forecasting and modeling techniques, changes in portfolio composition, business conditions and emerging trends. Recovery of the carrying value of loans is dependent to a great extent on conditions that may be beyond our control. Any combination of the aforementioned factors may adversely affect our loan portfolio resulting in increased delinquencies and loan losses and could require additional provisions for loan losses, which could impact future periods.

Credit Risk

Credit risk is the risk of financial loss if a customer or counterparty fails to meet its contractual obligations. The Company manages this risk by performing credit evaluations of its customers and maintaining an ongoing review of their financial condition. Based on its review, management believes that credit risk is minimal and collection of outstanding receivables is probable.

As of June 30, 2026, accounts receivable totaled $1,359 (in thousands).

Inventories, net consist of the following:

Property and equipment are comprised of the following:

Depreciation expense for the six months ended June 30, 2026, and 2025 was $120 and $156, respectively.

During the six months ended June 30, 2026 and for the year ended December 31, 2025, we disposed of $26 and $7, respectively, with no net proceeds.

The Company’s credit facility consists of a financing agreement (“the Agreement) with Zions Bancorporation, N.A., doing business as Amegy Bank (“Amegy”), for a revolving line of credit.

On July 9, 2025, the Agreement was amended to extend the maturity to July 8, 2026. Interest on borrowings is variable, based on the Prime Rate as published in The Wall Street Journal, and was 7.50% per annum as of the amendment date.

On May 19, 2026, the Agreement was amended to extend the maturity to July 8, 2028. Interest on borrowings is variable, based on the Prime Rate as published in The Wall Street Journal, and was 6.75% per annum as of the amendment date.

As of June 30, 2026, there wereno outstanding borrowings, and the full $3,000 remains available under the line of credit.

The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company leases its corporate office and warehouse facilities under a non-cancellable operating lease agreement. The lease commenced on February 7, 2020, for a facility located at Dallas, Texas, comprising approximately 21,476 square feet. Leases with an initial term of 12 months or less are not included on the balance sheets.

On February 2, 2025, the Company entered into a First Amendment to its existing lease agreement for its corporate headquarters and production plant located in Dallas, Texas. The amendment extends the lease term for an additional 60 months beginning August 1, 2025 and adds approximately 16,380 square feet of adjacent space, bringing the total leased premises to approximately 37,856 square feet. The amendment includes annual base rent increases ranging, in thousands, from $16 to $18 per month over the extended term and provides for two additional 60-month renewal options.

In accordance with ASC 842, the Company recognizes a right-of-use (ROU) asset and corresponding lease liability for its operating lease based on the present value of future lease payments over the lease term, discounted using the Company’s incremental borrowing rate. On the effective date of the lease, the Company recognized an ROU asset and a corresponding lease liability of approximately $833. At lease commencement, the applicable discount rate was 7.60%. Lease expense is recognized on a straight-line basis over the lease term. The lease terminates in July 2030.

As of June 30, 2026, and December 31, 2025 operating lease liabilities pertaining to its office and warehouse facility totaled $717 and $782, respectively.

As of June 30, 2026 and December 31, 2025, the Company recognized the following related to its operating lease:

Amortization of right-of-use assets for the three months ended June 30, 2026, and 2025 as $36 and $25, respectively.

Future minimum lease payments under the non-cancellable operating lease as of June 30, 2026 and December 31, 2025, are as follows:

Statutory Conversion of Members’ Equity

Immediately prior to the Conversion, the members’ equity of the limited liability company consisted of members’ capital accounts. In connection with the statutory conversion on January 1, 2026:

As the Conversion was treated as a capital reorganization, total equity immediately before and after the Conversion was unchanged.

Comparative Equity Presentation

The condensed balance sheets as of June 30, 2026 and December 31, 2025 present equity based on the Company’s legal form as of each date. Accordingly:

During the three months ended June 30, 2026, the Company recorded an out-of-period adjustment to record $75 of original listing fees incurred in connection with its January 2026 initial public offering that had not been recorded in the prior period. The adjustment reduced additional paid-in capital and increased other current liabilities by $75. The adjustment had no effect on net income, earnings per share, or cash flows for any period presented. Management evaluated the effect of the error on the condensed consolidated financial statements as of and for the three months ended March 31, 2026, and on the current period, and concluded that it was not material to any period (in thousands).

Warrants

Representatives warrants

In connection with the Company’s January 9, 2026, initial public offering, the Company issued representative warrants to the underwriter to purchase up to 10% of the IPO common shares issued at an exercise price of $9.375 per share. Therefore, on January 9, 2026,266,667 shares were issued in connection with the IPO and an additional 40,000 shares on January 20, 2026, when the over-allotment option was exercised. The warrants become exercisable beginning July 7, 2026 and expire on January 7, 2031.

The warrants are classified as equity and were measured at fair value on the issuance date using the Black-Scholes option pricing model. The warrants were valued at $2.66 per warrant, with the aggregate fair value of $816 thousand recorded as an offering cost and reflected as a reduction to additional paid in capital. The warrants are not subject to subsequent remeasurement.

The warrants may be exercised on a cash or cashless basis and were considered potentially dilutive for purposes of diluted earnings per share in accordance with ASC 260.

Consultant warrants

In November 2025, the Company entered into a consulting agreement with a strategic provider which provided for the issuance of up to 25,000 warrants to purchase shares of the Company’s common stock, subject to approval the Company’s Board of Directors. On March 25, 2026, the Board approved the issuance of these warrants.

The warrants have a contractual term of three years from the date of issuance, include a cashless exercise feature, and are subject to a one-year lock-up period. The warrants have an exercise price equal to 125% of the Company’s initial public offering price for the initial tranche and 125% of the volume-weighted average price of the Company’s common stock for a specific look-back period for any renewal tranche. The warrants vest over time and include accelerated vesting upon a change in control, as defined in the agreement.

The warrants are classified as equity and will be measured at fair value on their issuance date, with such fair value recognized as share-based compensation expense over the requisite service period.

Buda Juice, Inc. is a corporation for U.S. federal income tax purposes, incorporated in the State of Delaware. Prior to its conversion to a C-corporation on January 1, 2026, the Company operated as a limited liability company treated as a partnership for U.S. federal and state income tax purposes. Accordingly, its income tax liabilities and/or benefits were passed through to its unitholders, except for Texas, where the Company was subject to the Texas margin (franchise) tax.

The Company recognized income tax expense of $488 and $18 for the six months ended June 30, 2026 and 2025, respectively. The effective tax rates for the six months ended June 30, 2026 and 2025 were 36.23% and 0.90%, respectively. The Company’s federal and state statutory tax rate, net of the federal benefit, was approximately 21%. The variance between the Company’s effective tax rate and the statutory tax rate was primarily attributable to the discrete recognition of deferred tax expense on January 1, 2026, upon the Company’s conversion to a C-corporation.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. At December 31, 2025, the Company did not have any deferred tax balances due to its treatment as a pass-through entity. Effective January 1, 2026, the Company recorded a deferred tax liability of approximately $182, primarily related to book and tax differences in fixed assets upon conversion to a C-corporation. For the three months ended June 30, 2026, the Company was in a cumulative income position and projects net income for the full year 2026. In addition, there are no deferred tax assets subject to expiration. Therefore, the Company did not record a valuation allowance against its net deferred tax assets as of June 30, 2026. The Company will continue to assess the realizability of its deferred tax assets.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, which includes provisions such as immediate expensing of domestic research and experimental expenditures and 100% bonus depreciation for certain qualified property. The Company evaluated the impact of the OBBBA provisions on its income tax provision and overall tax position and determined that the impact primarily relates to timing differences and is not material to the Company’s financial statements.

On May 15, 2026, the Company acquired the private-label fresh ranch dressing business and inventory of Texas Harvest, LLC’s (“Texas Harvest”), a related party, for cash consideration of $100,000. The Company assumed no liabilities and accounted for the transaction as an asset acquisition, allocating the entire purchase price to inventory.

The related party nature is a result of two members of the Company’s Board of Directors being principals of Texas Harvest . Those board members recused themselves from the Board’s consideration of the transactions, which were reviewed and approved by a Committee of Disinterested Directors due to the related-party nature of the transactions.

Concurrently with the acquisition, the Company entered into a Co-Pack Manufacturing Agreement with Texas Harvest, LLC, (the “Manufacturer”), under which the Manufacturer produces the Company’s products on a non-exclusive, interim basis for a fee equal to the Manufacturer’s direct manufacturing cost plus a markup, with materials billed at actual cost. Manufacturing fees are recognized in cost of goods sold. Amounts due from the Manufacturer for customer proceeds collected on the Company’s behalf and not yet remitted are presented as “Due from related party.”

Related party balances as of June 30, 2026 were $499 of accounts receivable and $455 of accounts payable (amounts in thousands).

The Company evaluated subsequent events through August 14, 2026, the date the condensed financial statements were available to be issued, and has no reportable subsequent events.