BUDA 10-K & 10-Q changes, risk factors and insider trading

Results of Operations for the Three and Six Months Ended MarchJune 31,30, 2026, and 2025

The following table summarizes our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025, respectively:

Delivery and Handling Expense: Delivery and handling expense was essentially flat, with a small increase of 1.3%,$7 thousand, or 4.8%, to $130$152 thousand for the three months ended MarchJune 31,30, 2026.2026 from $145 thousand for the three months ended June 30, 2025. For the six months ended June 30, 2026 and 2025, delivery and handling expense was $282 thousand and $273 thousand, respectively, an increase of $9 thousand, or 3.3%.

Selling, General and Administrative Expenses: Selling, general, and administrative expense increased by $256$677 thousand, or 62.9%,179.1%, to $663 thousand for the three months ended March 31, 2026, from $407$1,055 thousand for the three months ended MarchJune 31,30, 2026, from $378 thousand for the three months ended June 30, 2025. TheFor increasethe insix months ended June 30, 2026 and 2025, selling, general and administrative expense was primarily$1,718 driventhousand byand $785 thousand, respectively, an increase inof administrative$933 personnelthousand, expenses,or insurance, accounting118.9%. andThese otherincreases professionalare feesmostly due to the additional expenses required as a public resultcompany, as well as stock-based compensation, none of which were present on a comparable basis during the Company’sprior-year initial public offering in January 2026.period.

Other income: Other income was $17$6 thousand for the three months ended MarchJune 31,30, 2026, an immaterial decrease of $16 from the three months ended June 30, 2025. Other income was $23 thousand for the six months ended June 30, 2026, an immaterial increase of $17$1 from the six three months ended MarchJune 31,30, 2025.

Income Taxes: The Company is a Subchapter C corporation for U.S. federal and state income tax purposes. Amounts recognized as income income taxes are presented within “income tax expense” in the accompanying statements of operations. The Company recognized income tax expense of $359 thousand$488 and $9 thousand$18 for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The effective tax rate for the threesix months ended MarchJune 31,30, 2026 was 46.76%,36.23%, compared to 1.07%0.90% for the same period in 2025. The increase in the effective tax rate was primarily attributable to the discrete recognition of deferred tax expense upon the Company’s conversion to a C-corporation on January 1, 2026. The Company did not record a valuation allowance as of MarchJune 31,30, 2026 due to its cumulative income position. Prior to the Conversion on January 1, 2026, the Predecessor was treated as a partnership and was subject only to the Texas margin tax.

In the past few years, we have financed our operations primarily through cash generated from our business operations and proceeds on borrowings borrowings through our credit facilities. We had $19,828$18,819 thousand and $1,840 thousand of cash and cash equivalents as of MarchJune 31, 30, 2026 and December 31, 2025, respectively.

Working Capital: The following table summarizes total current assets, liabilities and working capital at MarchJune 31,30, 2026 compared to December 31, 2025 (in thousands):

As of MarchJune 31,30, 2026, we were party to non-cancellable operating lease agreements related to our production facility and office space. Future Future minimum lease payments under this agreement total approximately $886$839 thousand, with $191$193 thousand due within the next 12 months and $695 $646 thousand due thereafter through July 2030. These commitments represent a significant use of cash and we expect to fund them through a combination of existing cash balances and cash flows from operations.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026, was $218$788 thousand as compared to $139$270 thousand for the six three months ended MarchJune 31,30, 2025. ThisThe increase ofis $79 thousand wasprimarily a direct result of continuedthe capitalinvestments spendingbeing made in the Dallasdressings business, which included the acquisition of the dressing business and inventory as well as the related manufacturing facility in orderupgrades to facilitatetransition increasethat salesbusiness andto continualin-house improvement on overall operations.production.

Net cash received in financing activities during the threesix months ended MarchJune 31,30, 2026, was $16,901$16,827 thousand as compared to a net cash used used amount of $1,438$1,748 thousand for the threesix months ended MarchJune 31,30, 2025. The Company’s IPO related transactions in January 2026 resulted in net cash proceeds of $16,902$16,827 thousand. However, during the threesix months ended MarchJune 31,30, 2025, the Company paid member distributions related to member tax pass-through liabilities in the amount of $1,438$1,748 thousand.