2. Business Combinations

Navitas Acquisition

On March 12, 2026 (the “Navitas Closing Date”), the Company acquired all of the issued and outstanding units of Navitas LLC (“Navitas”), a Delaware limited liability company, and all of the issued and outstanding capital stock of Global Superfoods Corp (“GSC”), a holding company with no operations whose sole purpose is to hold units of Navitas, pursuant to that certain Securities Purchase Agreement, dated December 21, 2025 (the “Acquisition Agreement”), by and among the Company, Encore Consumer Capital Fund II, LP (“Encore”), The Ira and Joanna Haber Family Trust, Dated October 5, 2015, and Advantage Capital Agribusiness Partners, L.P. (collectively, the “Navitas Sellers”). The Transactions were approved by the Company’s stockholders at a special meeting held on March 11, 2026.

Navitas is a leading premium organic superfood brand founded in 2003, offering high-quality organic superfoods across natural and conventional grocery, club, and e-commerce channels. The Company acquired Navitas to expand its product portfolio and distribution reach in the premium natural and functional foods market, accelerating its strategy to build a scaled positive nutrition platform.

The aggregate consideration paid to the Navitas Sellers was $40.9 million in cash, reflecting an initial purchase price of $38.5 million, as adjusted for post-closing working capital adjustments pursuant to the terms of the Acquisition Agreement, and the Company's payment of incremental acquisition-related transactions costs of the Navitas Sellers. The Navitas Acquisition was funded with proceeds from the concurrent private placement of $50.0 million of the Series A Preferred Stock to the Investor, affiliates of Nexus. The results of Navitas’s operations have been included in the Company’s condensed consolidated financial statements from the Navitas Closing Date.

Accounting Treatment

The Navitas Acquisition has been accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Under the acquisition method, identifiable assets acquired and liabilities assumed are recognized at their estimated fair values as of the Navitas Closing Date. The excess of consideration transferred over the estimated fair value of net identifiable assets acquired is recorded as goodwill.

Preliminary Purchase Price Allocation

The purchase price allocation set forth below is preliminary. The Navitas Closing Date was March 12, 2026, and the Company has not yet completed its valuation of all assets acquired and liabilities assumed. The Company expects to finalize the purchase price allocation no later than March 12, 2027. Any adjustments to the preliminary estimates will be recognized retrospectively as adjustments to the opening balance sheet amounts within the measurement period permitted under ASC 805.

The following table summarizes the preliminary estimated fair values of the identifiable assets acquired and liabilities assumed as of the Navitas Closing Date:

Certain amounts noted above are preliminary and subject to change during the respective measurement period (up to one year from the acquisition date) as we obtain additional information for the preliminary fair value estimates of the assets acquired and liabilities assumed. The primary preliminary estimates that are not yet finalized relate to certain assets and liabilities assumed, identifiable intangible assets, income taxes and residual goodwill.

Goodwill of $16.7 million represents the excess of consideration transferred over the preliminary estimated fair value of net identifiable assets acquired and reflects the expected synergies from combining the operations of Navitas with those of the Company, including expanded omnichannel distribution, enhanced supply chain capabilities, and the strategic value of Navitas’s established brand and consumer relationships in the organic superfoods category. Goodwill arising from the Navitas Acquisition is not expected to be deductible for U.S. federal income tax purposes. The purchase price included approximately $4.7 million of deferred tax liabilities. Because the Company has a full valuation allowance on its deferred taxes, a corresponding discrete release of the valuation allowance was required as of March 31, 2026, which resulted in an income tax benefit of $4.7 million during the six months ended June 30, 2026. 

Acquired Intangible Assets

The following table summarizes the components of identifiable intangible assets acquired as of the Navitas Closing Date:

Acquired intangible assets are being amortized on a straight-line basis over their estimated useful lives, which have a weighted-average useful life of approximately 9.8 years. Amortization expense for acquired intangible assets is expected to be approximately $2.1 million annually.

Acquisition-Related Costs

The Company incurred acquisition-related transaction costs of approximately $0.6 million and $2.0 million during the three and six months ended June 30, 2026, recorded within general and administrative expenses in the condensed consolidated statements of operations.

Post-Acquisition Results

From the Navitas Closing Date through June 30, 2026, Navitas contributed net sales of approximately $15.9 million and net income of approximately $2.6 million to the Company’s condensed consolidated results of operations.

Terrasoul Acquisition

On April 21, 2026 (the “Terrasoul Closing Date”), the Company completed its acquisition of all of the issued and outstanding equity interests of Terrasoul , a Delaware limited liability company, pursuant to that certain securities purchase agreement, dated April 21, 2026 (the “Terrasoul Acquisition Agreement”), by and among the Company, Terrasoul, and Superfoods Seller LLC (the “Terrasoul Sellers”) and, solely for the purposes of Section 8.16 of the Terrasoul Acquisition Agreement, the Guarantors set forth on Schedule 1 thereto.

The aggregate consideration paid to the Terrasoul Sellers was $54.5 million, consisting of $50.4 million in cash and the acquisition-date fair value of contingent consideration of $4.1 million. The aggregate consideration reflects an initial purchase price of $48.0 million, as adjusted for post-closing working capital adjustments pursuant to the terms of the Terrasoul Acquisition Agreement, and the Company's payment of incremental acquisition-related transactions costs of the Terrasoul Sellers. The Terrasoul Acquisition was funded with proceeds from the concurrent private placement of $60.0 million of the Series A Preferred Stock to the Investor, affiliates of Nexus (the “Subsequent Issuance”). The results of Terrasoul’s operations have been included in the Company’s condensed consolidated financial statements from the Terrasoul Closing Date.

Accounting Treatment

The Terrasoul Acquisition has been accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Under the acquisition method, identifiable assets acquired and liabilities assumed are recognized at their estimated fair values as of the Terrasoul Closing Date. The excess of consideration transferred over the estimated fair value of net identifiable assets acquired is recorded as goodwill.

Preliminary Purchase Price Allocation

The purchase price allocation set forth below is preliminary. The Terrasoul Closing Date was April 21, 2026, and the Company has not yet completed its valuation of all assets acquired and liabilities assumed. The Company expects to finalize the purchase price allocation no later than April 21, 2027. Any adjustments to the preliminary estimates will be recognized retrospectively as adjustments to the opening balance sheet amounts within the measurement period permitted under ASC 805.

The following table summarizes the preliminary estimated fair values of the identifiable assets acquired and liabilities assumed as of the Terrasoul Closing Date:

Certain amounts noted above are preliminary and subject to change during the respective measurement period (up to one year from the acquisition date) as we obtain additional information for the preliminary fair value estimates of the assets acquired and liabilities assumed. The primary preliminary estimates that are not yet finalized relate to certain assets and liabilities assumed, identifiable intangible assets, income taxes and residual goodwill.

Goodwill of $15.1 million represents the excess of consideration transferred over the preliminary estimated fair value of net identifiable assets acquired and reflects the expected synergies from combining the operations of Terrasoul with those of the Company, including in-house production capabilities, expanded omnichannel distribution, enhanced supply chain capabilities, and the strategic value of Terrasoul’s established brand and consumer relationships in the organic superfoods category. Goodwill arising from the Terrasoul Acquisition is expected to be deductible for U.S. federal income tax purposes. 

Acquired Intangible Assets

The following table summarizes the components of identifiable intangible assets acquired as of the Terrasoul Closing Date:

Acquired intangible assets are being amortized on a straight-line basis over their estimated useful lives, which have a weighted-average useful life of approximately 9.8 years. Amortization expense for acquired intangible assets is expected to be approximately $2.4 million annually.

Contingent Consideration

Under the Purchase Agreement, the Company is obligated to pay the Seller additional cash consideration of up to $5,000,000 (the “Earn-Out”), contingent on Terrasoul’s Contribution Profit for the year ending December 31, 2026 (the “2026 Contribution Profit”). Contribution Profit is defined in the Purchase Agreement as gross profit less (i) credit card fees, (ii) platform fees, and (iii) advertising, promotion, and marketing expenses. The earn-out period runs from the Closing Date through December 31, 2026. No amount is payable if 2026 Contribution Profit is less than $11,300,000; the earn-out becomes payable beginning at $500,000 once 2026 Contribution Profit equals or exceeds $11,300,000 and increases by $500,000 for each additional $100,000 of 2026 Contribution Profit, up to the maximum of $5,000,000 once 2026 Contribution Profit equals or exceeds $12,200,000. The earn-out is payable in cash following completion of the Company’s audited financial statements for the year ending December 31, 2026, and is expected to be settled in 2027. Because the earn-out is payable to the Seller and is not contingent on continued employment, it is accounted for as contingent consideration and included in consideration transferred, rather than as post-combination compensation expense.

The contingent consideration is classified as a liability and is remeasured to fair value at each reporting date, with changes in fair value recognized in earnings within other income (expenses) on the statements of operations. The undiscounted range of possible outcomes is $0 to $5,000,000. The acquisition-date fair value of $4,070,000 was estimated using a probability-weighted scenario analysis (a Level 3 measurement), under which possible 2026 Contribution Profit outcomes were assigned probabilities and the resulting earn-out payments were discounted to present value using a discount rate of 6.0%. The following table presents the change in the contingent consideration liability from the Closing Date through June 30, 2026:

The fair value of the contingent consideration is sensitive to changes in the significant unobservable inputs, principally the projected 2026 Contribution Profit and the probabilities assigned to each scenario. A significant increase (decrease) in projected 2026 Contribution Profit, or in the probability weighting of higher-outcome scenarios, would result in a higher (lower) fair value of the contingent consideration liability. See Note 4 for more information on the significant unobservable inputs used in the measurement as of June 30, 2026. 

Acquisition-Related Costs

The Company incurred acquisition-related transaction costs of approximately $2.8 million during the three and six months ended June 30, 2026, recorded within general and administrative expenses in the condensed consolidated statements of operations.

Post-Acquisition Results

From the Terrasoul Closing Date through June 30, 2026, Terrasoul contributed net sales of approximately $15.2 million and net income of approximately $1.2 million to the Company’s condensed consolidated results of operations.

Supplemental Pro Forma Information (Unaudited)

The following unaudited supplemental pro forma financial information presents the combined results of the Company, Navitas, and Terrasoul, as if the acquisitions had occurred on January 1, 2025:

The pro forma results reflect adjustments for amortization of acquired intangible assets, tax impacts, elimination of intercompany transactions, and removal of historical interest expense, as if incurred on January 1, 2025. This supplemental information is presented for informational purposes only and is not necessarily indicative of what the consolidated results of operations would have been had the acquisitions occurred on January 1, 2025, nor is it indicative of future consolidated results.