Amendment to Current Report (Form 8-K/A)

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

As of and for the years ended December 31, 2025 and 2024

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

CONTENTS

Report of Independent Registered Public Accounting Firm		1
Consolidated Financial Statements as of and for the years ended December 31, 2025 and 2024
Consolidated Balance Sheets		3
Consolidated Income Statements		4
Consolidated Statements of Changes in Members' Equity		5
Consolidated Statements of Cash Flows		6
Notes to Consolidated Financial Statements		7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of US Salt Parent Holdings, LLC and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of US Salt Parent Holdings, LLC and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America (GAAP).

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition - Refer to Note 2 to the financial statements

Critical Audit Matter Description

The Company manufactures and sells a range of branded and private label evaporated salt products to nationwide retailers, pharmaceutical companies, food service operators, and independent distributors. The Company recognizes revenue at the point in time when control is transferred to the customer, generally when the product is shipped or delivered to the customer based on the applicable shipping terms. The Company's revenue is measured as the determinable transaction price, net of any variable consideration, such as discounts, sales incentives, rights to return product, and taxes collected from customers and remitted to governmental authorities.

We identified revenue recognition as a critical audit matter because auditing revenue required extensive audit effort and auditor judgment. In particular, judgment was necessary to assess whether revenue was recognized in the appropriate period based on the applicable contractual arrangements, purchase orders and related shipping terms and whether revenue was recorded at the appropriate amount, net of variable consideration.

How the Critical Audit Matter Was Addressed in the Audit

●

We evaluated the accounting policies established by management against ASC 606, Revenue from Contracts with Customers.

●

We sampled revenue transactions and read the terms of the respective master service agreement or purchase order, as well as the applicable proof of delivery or bill of lading to evaluate the correct timing of control transfer and variable consideration, as applicable.

●

We selected a sample of revenue transactions recorded near the fiscal year-end, as well as immediately following the year-end, and inspected bills of lading or proof of delivery to evaluate whether revenue was recognized in the correct period based on the specific shipping terms.

/s/ DELOITTE & TOUCHE LLP

New York, New York

July 21, 2026

We have served as the Company's auditor since 2023.

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2025 and 2024

		2025				2024
ASSETS
Current Assets
Cash and cash equivalents		$	10,805,730			$	7,362,031
Accounts receivable, net			12,135,457				13,514,707
Inventories			10,862,930				8,867,043
Prepaid expenses			1,012,968				1,068,828
Total Current Assets			34,817,085				30,812,609
Non-current Assets
Plant, property and equipment, net			321,418,299				328,060,441
Goodwill			28,120,191				28,120,191
Intangibles, net			16,775,536				18,443,349
Operating lease right-of-use assets			1,147,174				1,608,264
Finance lease right-of-use assets			375,810				405,863
Other inventories			5,146,078				4,783,497
Total Non-current Assets			372,983,088				381,421,605
Total Assets		$	407,800,173			$	412,234,214
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable		$	8,398,818			$	9,129,593
Accrued liabilities			6,385,908				5,153,817
Current maturities of long- term debt			2,320,000				2,320,000
Current portion of operating lease liability			688,711				709,098
Current portion of finance lease liability			100,699				76,982
Total Current liabilities			17,894,136				17,389,490
Non-current Liabilities
Long- term debt, net of current maturities			203,161,485				215,776,672
Long- term portion of operating lease liability			467,069				897,997
Long- term portion of finance lease liability			302,668				343,350
Asset retirement obligations			806,799				751,834
Total Liabilities			222,632,157				235,159,343
Members' Equity
Members' units, Class A 190,939 and 190,964 units issued and outstanding as of December 31, 2025 and 2024, respectively			181,029,080				184,492,108
Members' units, Class B 3,362 and 2,164 units issued and outstanding as of December 31, 2025 and 2024, respectively			1,491,880				1,212,683
Subscription note receivable			(68,451	)			(165,000	)
Retained earnings (accumulated deficit)			949,834				(10,153,392	)
Noncontrolling parent interest			1,765,673				1,688,472
Total Members' Equity			185,168,016				177,074,871
Total Liabilities and Members' Equity		$	407,800,173			$	412,234,214

See Notes to Consolidated Financial Statements

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

Consolidated Income Statements

December 31, 2025 and 2024

		2025				2024
Revenue		$	132,079,041			$	123,088,183
Cost of Revenue			83,127,061				79,912,121
Gross Profit			48,951,980				43,176,062
Selling, general and administrative expenses			16,452,416				13,348,529
Loss on disposal of property, plant and equipment			39,118				255,678
Operating Income			32,460,446				29,571,855
Other Income (Expenses)
Interest expense			(21,292,861	)			(24,413,242	)
Foreign currency income (loss)			47,795				(132,087	)
Net Income			11,215,380				5,026,526
Net income attributable to noncontrolling parent interest			112,154				50,265
Net income attributable to Parent Holdings Class A unitholders		$	11,103,226			$	4,976,261
Basic and diluted weighted average Class A units outstanding			190,942				189,924
Earnings per unit attributable to Class A unit, basic and diluted		$	58.15			$	26.20

See Notes to Consolidated Financial Statements

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

Consolidated Statements of Changes in Members' Equity

December 31, 2025 and 2024

		Class A Member Units								Class B Member Units								Subscription Note				Retained Earnings (Accumulated				Noncontrolling Parent				Total Members'
		Units				Amount				Units				Amount				Receivable				Deficit)				Interest				Equity
Balances, January 1, 2024			187,862			$	187,908,000				1,100			$	744,081			$	(475,000	)		$	(15,129,653	)		$	1,731,095			$	174,778,523
Members' contributions			3,602				6,279,986				-				-				-				-				-				6,279,986
Members' distributions			-				(9,195,878	)			-				-				-				-				(92,888	)			(9,288,766	)
Collection of subscription note receivable			-				-				-				-				60,000				-				-				60,000
Unit-based compensation expense			-				-				1,382				548,602				-				-				-				548,602
Repurchase of units			(250	)			(250,000	)			(318	)			(80,000	)			-				-				-				(330,000	)
Cancellation of units purchased and corresponding subscription note receivable			(250	)			(250,000	)			-				-				250,000				-				-				-
Net income			-				-				-				-				-				4,976,261				50,265				5,026,526
Balances, December 31, 2024			190,964				184,492,108				2,164				1,212,683				(165,000	)			(10,153,392	)			1,688,472			$	177,074,871
Members' contributions			-				42,284				-				-				-				-				-				42,284
Members' distributions			-				(3,460,312	)			-				-				-				-				(34,953	)			(3,495,265	)
Collection of subscription note receivable			-				-				-				-				96,549				-				-				96,549
Unit-based compensation expense			-				-				1,357				480,515				-				-				-				480,515
Repurchase of units			(25	)			(45,000	)			(159	)			(201,318	)			-				-				-				(246,318	)
Net income			-				-				-				-				-				11,103,226				112,154				11,215,380
Balances, December 31, 2025			190,939			$	181,029,080				3,362			$	1,491,880			$	(68,451	)		$	949,834			$	1,765,673			$	185,168,016

See Notes to Consolidated Financial Statements

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

Consolidated Statements of Cash Flows

December 31, 2025 and 2024

		2025				2024
Cash Flow from Operating Activities
Net income		$	11,215,380			$	5,026,526
Adjustments to reconcile net income to net cash from operating activities:
Depreciation, depletion, and amortization			15,404,688				13,545,094
Loss due to casualty			-				816,902
Gain from insurance recovery			-				(816,902	)
Amortization of debt issuance cost			704,813				814,849
Bad debt expense			58,087				234,359
Unit-based compensation expense			480,515				548,602
Loss on disposals			39,118				255,678
Non-cash lease expense			898,244				699,702
Amortization of finance right-of-use assets			104,145				92,308
Interest on finance leases			47,126				48,857
Accretion of asset retirement obligation			70,965				78,479
Changes in operating assets and liabilities:
Accounts receivable			1,321,163				(385,769	)
Inventory			(2,016,875	)			(1,140,346	)
Prepaid expenses			55,860				212,672
Other inventories			(362,581	)			976
Accounts payable			(275,860	)			1,104,959
Operating lease liabilities			(888,469	)			(712,686	)
Accrued liabilities			1,232,091				(582,036	)
Net Cash Provided by Operating Activities			28,088,410				19,842,224
Cash Flow from Investing Activities
Purchases of plant, property, and equipment			(7,583,778	)			(13,387,493	)
Net cash Used in Investing activities			(7,583,778	)			(13,387,493	)
Cash Flow from Financing Activities
Repayment of principal on term loan			(13,320,000	)			(7,320,000	)
Repayment of principal of finance leases obligations			(138,183	)			(121,495	)
Members' contributions			42,284				6,279,986
Members' distributions			(3,460,312	)			(9,195,878	)
Distribution to noncontrolling parent interest			(34,953	)			(92,888	)
Proceeds from collection of subscription note receivable			51,549				60,000
Repurchase of units			(201,318	)			(330,000	)
Net Cash Used in Financing Activities			(17,060,933	)			(10,720,275	)
Net Change in Cash and Cash Equivalents			3,443,699				(4,265,544	)
Cash and Cash Equivalents, Beginning of Year			7,362,031				11,627,575
Cash and Cash Equivalents, End of Year		$	10,805,730			$	7,362,031
Supplemental cash flow information
Cash paid for interest		$	20,911,147			$	24,158,783
Supplemental non-cash investing and financing information:
Repayment of subscription receivable from proceeds of units repurchase		$	45,000			$	-
Property, plant and equipment in accounts payable		$	1,118,320			$	1,573,234
Additions and changes in asset retirement obligations		$	16,000			$	(124,184	)

See Notes to Consolidated Financial Statements

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

Note 1.

Nature of operations and basis of presentation

Nature of Business - On June 3, 2021, US Salt Parent Holdings, LLC ("Parent Holdings") was formed and incorporated in Delaware as a limited liability company, which owns 99% members' interest of US Salt Intermediate Holdings, LLC ("Intermediate Holdings"). On July 19, 2021, US Salt Holdings, LLC ("US Salt") was formed and incorporated in Delaware and purchased 100% of the outstanding member's interest in US Salt Investors, LLC, which owns 100% of member's interest of US Salt, LLC. Emerald Lake Capital LP ("Emerald Lake") together with Emerald Lake Pearl Acquisition, LP, Emerald Lake Pearl Acquisition-A, LP, and Emerald Lake Pearl Holding LLC indirectly purchased approximately 99.5% of the Class A units of the Parent Holdings through EL US Salt Aggregator, LP ("Aggregator"). Parent Holdings and Aggregator own 99% and 1% (collectively "Emerald Lake Investment"), respectively, of members' interest of Intermediate Holdings, which owns 100% member's interest of US Salt.

US Salt Parent Holdings, LLC and subsidiaries (the "Company", we", "us", "our") operate a single solution mining facility located in Watkins Glen, New York. The Company mines, processes, packages and sells a range of evaporated salt products used for food and food processing, pharmaceutical, water softening and industrial applications mainly in the U.S. and Canada, and other countries in North America. The Company's primary products include round cans of salt, packaged pellets, packaged granulated salt, and medical grade salt. The Company's customers primarily include national retail chains, pharmaceutical companies, food service operators, and independent distributors.

Merger Agreement - On December 8, 2025, ContextLogic Holdings Inc. ("ContextLogic"), incorporated in the state of Delaware and traded on the OTC (Over-the-Counter) market under the trade symbol LOGC, entered into a Purchase Agreement (the "Purchase Agreement", or the "Transaction") with the various parties to acquire Parent Holdings and its subsidiaries. The board of directors of both ContextLogic and Parent Holdings have approved the proposed Purchase Agreement. The Transaction closed on February 26, 2026. Refer to Note 19, Subsequent Events.

Basis of Presentation - The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The accompanying consolidated financial statements include the Company, and all our majority or wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Note 2.

Significant accounting policies

The following is a summary of the significant accounting policies and principles used in the preparation of the consolidated financial statements:

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

Use of Estimates

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as contingent assets and liabilities, as of the date of the consolidated financial statements and the reported amounts of revenue and expenses for the reporting periods then ended. Actual results could vary from the estimates and assumptions that were used. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates and assumptions will be reflected in the consolidated financial statements in future periods.

Significant estimates embedded in the consolidated financial statements include, but not limited to, revenue recognition, impairment analysis of goodwill, depletion of salt reserves, and impairment of long-lived assets and finite-lived intangible assets.

Revenue Recognition

Nature of Revenue Source - The Company manufactures and sells a range of branded and private label evaporated salt products to nationwide retailers, pharmaceutical companies, foodservice operators, and independent distributors. When the Company enters into a sale arrangement with a customer, it believes it is probable that it will collect substantially all the consideration to which it will be entitled in exchange for the goods that will be transferred to the customer. The Company's customer contracts identify the product, quantity, price, payment terms, and final delivery terms. Payment terms sometimes include early-pay discounts. Although some payment terms may be extended, no terms beyond one year are granted at contract inception.

The Company determines revenue recognition through the following steps:

●

Identification of the contract, or contracts, with a customer

●

Identification of the performance obligations in the contract

●

Determination of the transaction price

●

Allocation of the transaction price to the performance obligations in the contract

●

Recognition of revenue when, or as, the Company satisfies a performance obligation.

Revenue Recognition - Revenue is recognized at the point in time when control is transferred to the customer. In general, control transfers to a customer when the product is shipped or delivered to the customer based upon applicable shipping terms, as the customer can direct the use and obtain substantially all the remaining benefits from the product at this point in time. The Company's revenue is reported as net revenue and is measured as the determinable transaction price, net of any variable consideration such as discounts, sales incentives, rights to return product, and any taxes collected from customers and remitted to governmental authorities.

Performance Obligations - A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers. The contract's transaction price is allocated to the performance obligations and recognized as revenue when the performance obligations are satisfied. Substantially all our contracts are of a short-term nature and contain a single performance obligation. Shipping and handling costs associated with outbound freight, including shipping and handling costs after control over a product is transferred to a customer are accounted for as a fulfillment cost as incurred and are not considered to be a separate performance obligation. Shipping and handling costs recorded as a component of cost of revenues were approximately $9.5 million and $9.6 million for the years ended December 31, 2025 and 2024, respectively.

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

Contract Estimates - Most contracts include some form of variable consideration. The most common forms of variable consideration include discounts, rebates, and sales returns and allowances. Variable consideration is treated as a reduction in revenue when product revenue is recognized. The Company uses the most likely amount method to determine the variable consideration. The Company believes there will not be significant changes to estimates of variable consideration when any related uncertainties are resolved with customers. The Company reviews and updates its estimates and related accruals of variable consideration each reporting period based on the terms of the agreements, historical experience, and any recent changes in the market. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company's influence are typically resolved within a short timeframe therefore not requiring any additional constraint on the variable consideration.

Approximately 99% of the Company's revenue are generated from North America, and 93% of which is from domestic sales for the years ended December 31, 2025 and 2024. The Company offers customers limited right of return for its non-conforming products in the event of defects. Customer remedies may include either a cash refund or product exchange. Accordingly, the estimated right of return and related refund liability is recorded as a reduction in revenue. Return estimates are reviewed and updated in each reporting period based on historical sales and return experiences. Contract asset and liability balances as of December 31, 2025 and 2024 are immaterial.

Cost of Revenue

Cost of revenue reflects the costs to produce our products, which primarily consists of labor, employee benefits, materials, depreciation and depletion, shipping and handling, and overhead. Cost of revenue is capitalized in inventory and expensed when control is transferred to the customer.

Accounts Receivable, net and Allowance for Expected Credit Losses

Accounts receivable, net of allowance are uncollateralized customer obligations billed under contract terms. Accounts receivables are stated at their net realizable value. The Company estimates an allowance for credit losses based upon the evaluation of several factors including related ages of past due receivables, customer type, customer credit worthiness, knowledge of a customer's financial conditions, historical collection experience, current economic factors, and other factors relevant to assessing the expected credit losses. The Company records uncollectible amounts against the allowance for credit losses once management determines the amount to be uncollectible.

Cash and Cash Equivalents

The Company considers cash on deposit and all highly liquid investments and securities with maturities of three months or less at the time of purchase to be considered cash equivalents. The Company maintains its cash and cash equivalents in accounts in various banks and financial institutions.

Concentration of Credit and Customer Risk

The Company's financial instruments that are exposed to concentrations of credit risk consist of cash and accounts receivable.

Cash balances at various times during the year may exceed the amount insured by the Federal Deposit Insurance Corporation. The Company monitors the credit ratings of financial institutions where its cash deposits are held, and has not incurred any losses related to such deposits.

The Company can, at times, be subject to a concentration of credit risk with respect to outstanding accounts receivable. The Company's customers are located throughout the United States through various channels including national retail chains, pharmaceutical companies, food service operators, and independent distributors. Although the Company generally grants credit without collateral, management believes that its contract acceptance, billing and collection policies are adequate to minimize material credit risk. The Company has one major customer which accounted for over 10% of accounts receivable as of December 31, 2025 and December 31, 2024. The Company also has one major customer, which accounts for over 10% of revenue for the years ended December 31, 2025 and December 31, 2024.

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

Inventories and Other Inventories

Salt is reported as inventory at the point in time it is extracted from the brine well. Salt inventories, packaging, supplies, and maintenance materials are valued at the lower of cost or net realizable value, with cost determined on standard costing method. Substantially all costs associated with the production of finished goods, such as labor, supplies, equipment cost, inbound freight and overhead (including depletion of salt reserves), are captured as inventory costs.

Maintenance materials are expensed as consumed or capitalized into plant, property and equipment if it meets the criteria of a capital expenditure. Additionally, maintenance materials that are not expected to be used in the next twelve months from the balance sheet date are recorded as other inventories in the Consolidated Balance Sheets.

Management monitors inventory levels and adjusts valuation for slow-moving, shrinkage, obsolescence, and markdowns. The Company accounts for slow-moving or obsolete inventory that is established based on management's estimates of the net realizable value of the related products at the end of each reporting period.

Plant, Property and Equipment, Net

Property and equipment is stated at cost less accumulated depreciation and depletion. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are charged to expense. When depreciable properties are retired or sold, the cost and related accumulated depreciation is eliminated from the accounts and any resulting gain or loss is reflected in the Company's Consolidated Income Statements. Depreciation is provided using the straight- line method, based on the useful lives of assets which range from three to twenty years.

Plant, property and equipment also includes salt reserves, which consist of brine fields and underground salt bed owned by the Company. Salt reserves are depleted on a units-of-production basis based on the estimated annual consumption as extraction of reserves takes place.

The following table summarizes the estimated useful lives of the Company's different classes of plant, property and equipment:

	Years
Buildings and improvements	10 - 20
Machinery and equipment	3 -14

Construction in Process (CIP) represents the accumulated costs of construction and development for assets that are not yet completed and ready for their intended use. CIP is recorded as plant, property and equipment in the consolidated financial statements and is not depreciated until the asset is placed into service. Borrowing costs are recognized, as an expense, in the period in which they are incurred, except to the extent that they are capitalized. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset when it is probable that they will result in future economic benefits to the entity and that the costs can be measured reliably. The Company capitalized interest cost of $0.2 million for both years ended December 31, 2025 and 2024. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in profit or loss.

Leases

The Company determines if an arrangement is a lease at its inception. In certain of the Company's lease arrangements, judgment is required in determining if a contract contains a lease. For these arrangements, there is judgment in evaluating if the arrangement involves an identified asset that is physically distinct or whether the Company has the right to substantially all of the capacity of an identified asset that is not physically distinct. In arrangements that involve an identified asset, there is also judgment in evaluating if the Company has the right to direct the use of that asset.

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

The Company determines whether an arrangement is or contains a lease, its classification, and its term at the lease commencement date. The Company leases office space, warehouses, and equipment under non-cancelable operating and finance leases. A lease is classified as a finance lease if it transfers ownership, includes a purchase option reasonably certain to be exercised, covers a major portion of the asset's economic life, has payments that approximate substantially all of the asset's fair value, or involves an asset of specialized nature. Leases with a term greater than one year will be recognized on the Consolidated Balance Sheets as right-of-use (ROU) assets, current lease liabilities, and if applicable, long-term lease liabilities. The Company includes renewal options to extend the lease term where it is reasonably certain that it will exercise these options. Lease liabilities and the corresponding ROU assets are recorded based on the present values of lease payments over the lease term. The interest rate implicit in the Company's leases are not readily determinable. As such, the Company uses its incremental borrowing rate as the discount rate, which approximates the interest rate at which the Company could borrow on a collateralized basis with similar terms and payments and in similar economic environments. The Company's leases have remaining terms ranging from 1 to 5 years, with some of those leases including options that grant the Company the ability to renew or extend the lease term. When determining the lease term, the Company does not include periods covered by the renewal options unless they are reasonably certain to exercise such renewal options.

Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company accounts for lease and non-lease components, principally common area maintenance for its facilities leases, as a single lease component for its facilities leases. Variable lease costs represent additional expenses incurred by the Company that are not included in the lease payment. Variable lease costs include maintenance charges, taxes, insurance, and other similar costs, and are recorded within cost of revenue and selling, general and administrative expense on the Consolidated Income Statements for the years ended December 31, 2025 and 2024.

Debt Issuance Costs

Debt issuance costs are amortized using the effective interest method over the term of the related borrowing agreement and the amortization is included in interest expense within the Consolidated Income Statements. The unamortized portion of deferred financing fees associated with long-term borrowings are shown netted against the Company's outstanding long-term debt.

Environmental Cost

Environmental costs, other than those of a capital nature, are accrued at the time when exposure becomes known, and costs can be reasonably estimated. Costs are accrued based upon management's estimates of all direct costs. Amounts accrued for environmental matters were not material as of December 31, 2025 and 2024.

Asset Retirement Obligations

Legal obligations associated with the retirement of long-lived assets are reflected at their estimated fair value, with a corresponding charge to cost of goods sold, at the time they are incurred. Asset retirement obligations (ARO) primarily consist of spending estimates related to capping brine wells and support facilities in accordance with federal and state reclamation laws as defined by each mining permit. The Company estimates and records the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long- lived asset. The liability is accreted to its present value each period and the capitalized cost is amortized using the units-of-production method over estimated recoverable reserves upon commencement of salt extraction. The amortized cost is included in the cost of revenue in the Consolidated Income Statements.

Finite-lived Intangible Assets and Long-lived Assets

Finite-lived intangible assets acquired by the Company are initially recorded at fair value and amortized using the straight-line method to distribute the initial value of the assets over the estimated useful lives, which management has determined to be fifteen years.

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

The Company reviews long-lived assets including right-of-use assets and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the use and eventual disposition of the asset. If such assets are considered impaired, the impairment recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value.

There were no impairment indicators of long-lived assets or finite-lived intangibles for the years ended December 31, 2025 and 2024.

Goodwill

Goodwill consists of the excess cost of an acquired business over the fair market value of the underlying net assets. We review goodwill annually for impairment, or more frequently if impairment indicators arise. We do not amortize such assets.

The Company performs an annual impairment test as of October 1 of each year or more frequently if events or changes in circumstances indicate that the asset may be impaired. As our business is highly integrated and its components have similar economic characteristics, we have concluded we operate as one reporting unit at the entity level. We evaluate goodwill for potential impairment on an annual basis or when if indicators of impairment exist during the year. When we evaluate goodwill for potential impairment, generally, we first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. A qualitative assessment may include, but is not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, financial performance and other entity or reporting unit specific events. If we determine qualitatively that it is more likely than not that the fair value of a reporting unit is less than its carrying value, or if we decide to bypass the qualitative assessment, we perform a quantitative analysis. The quantitative analysis is used to identify both the existence of impairment and the amount of impairment loss by comparing the estimated fair value of a reporting unit to its carrying value. The estimated fair value is based on forward-looking estimates of performance and cash flows of our reporting unit, which are based on historical operating results, adjusted for current and expected future market conditions, as well as various internal projections and external sources. If the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss would be recognized in our Consolidated Income Statements in an amount equal to the excess of the carrying value over the estimated fair value, limited to the total amount of goodwill allocated to that reporting unit.

We performed our annual impairment analysis for the years ended December 31, 2025 and 2024 and did not identify any indicators of impairment.

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs amounted to $0.1 million and $0.2 million for the years ended December 31, 2025 and 2024, respectively, and are included within selling, general and administrative expenses in the Consolidated Income Statements.

Unit-based Compensation

The Company accounts for unit-based compensation by recording expenses using the fair value of Class B unit awards at the time of grant. In estimating the fair value of the Class B units granted, the Company utilized the option pricing model ("OPM"), in the form of a single stochastic valuation process applying the Black-Scholes Pricing Model ("BSPM"), along with the Monte-Carlo simulation model ("MCSM"). The BSPM and MCSM provide the ability to analyze financial instruments within a complex capital structure and whose values derived from variable significant inputs and assumptions along with future financial outcomes upon future events such as change of control or capital raise (such as an IPO). The application of the valuation method involves inputs and assumptions that are judgmental and highly sensitive.

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

The Company recognizes expenses associated with such Class B unit awards over the service period when the grant is service based. The unit-based compensation expense for performance-based Class B units is recognized when management determines that it is probable that the performance criteria is met and if and only if participant has been continuously employed by or continuously providing services to the Company from the vesting start date through the date of which the performance criteria is met. The Company's accounting policy is to recognize forfeitures as they occur. The Company may make cash payments to repurchase vested Class B units and forfeit the unvested Class B units due to termination or departure of an employee or member of the Board of Directors. Upon the repurchase, the Company records the repurchase price (which under the terms of the grant agreements will be at fair value) as a reduction of equity, and the previously recognized compensation expenses for unvested Class B units are reversed.

Subscription Note Receivable

The Company may issue Class A units to employees and receive subscription notes receivable. The subscription notes receivable is repaid through cash upon receipt of annual bonus. The notes may also be voluntarily prepaid at any time without penalty. In addition, the notes require mandatory prepayment, without premium or penalty, upon the purchaser's receipt of any cash proceeds related to the securities, including cash distributions (other than tax distributions) or transfers of such securities, in an amount equal to the proceeds received. Subscription notes receivable is classified as a deduction from Member's equity within the Statement of Changes in Members' Equity.

Noncontrolling Parent Interest

Emerald Lake together with Emerald Lake Pearl Acquisition, LP, Emerald Lake Pearl Acquisition-A, LP, and Emerald Lake Pearl Holding LLC owns approximately 99.5% of the Class A units of the Parent Holdings through Aggregator, which holds the 1% noncontrolling parent interest in Intermediate Holdings. Net income or loss attributable to the noncontrolling parent interest on the Consolidated Income Statements represents the portion of earnings or losses attributable to the interest in our subsidiaries held by Aggregator.

Earnings per Unit (EPU)

As of December 31, 2025 and 2024, the Company has outstanding subscription notes receivable from members when certain Class A units were issued. The Company concluded that it 1) can cancel the Class A units if the member defaults on the subscription notes receivable and (2) intends to exercise this cancellation right. For EPU calculation purposes, the Company treats the unpaid Class A units that are issued and legally outstanding in the same manner as an option. The unpaid Class A units are issued and legally outstanding, and have the same distribution and participation rights as the paid Class A units. Basic earnings per unit for the years ended December 31, 2025 and 2024 are calculated using the two-class method. The two-class method requires an allocation of earnings to all securities (Class A and Class B units) that participate in earnings to the extent that each such security may share in the Company's earnings. Basic earnings per unit are calculated by dividing net income attributable to Parent Holdings Class A members by the weighted average number of Class A units.

Diluted earnings per unit for the years ended December 31, 2025 and 2024 are calculated by applying the two-class method for participating securities and then incorporating the dilutive effects of other potential Class A units, determined using the treasury stock method, to arrive at the most dilutive EPU. The two-class method uses net income available to Class A members and assumes conversion of all potential units other than the participating securities. There were no dilutive securities outstanding as of December 31, 2025 and 2024.

Income Taxes

The Company is a limited liability company formed under state statutes and taxed for federal and state purposes as a partnership. Therefore, Intermediate Holdings, the direct sole member of the Company, reports the Company's taxable income or loss on the Intermediate Holdings' respective tax return. Accordingly, no provision for income taxes has been made in the accompanying consolidated financial statements for federal and state income taxes.

US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025 and 2024

The Company accounts for uncertain tax positions using a "more-likely-than-not" threshold. A tax benefit from an uncertain tax position is recognized if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position, or the statute of limitations concerning such issues lapses. The Company determined there were no uncertain tax provisions, interest or penalties as of December 31, 2025 and 2024. If there are any interest or penalties, they are expensed as incurred. The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next 12 months.

Foreign Currency Transactions

Transactions in foreign currencies are translated into the functional currency (USD) using exchange rates prevailing at the dates of the transactions. Gains and losses on foreign currency transactions are recognized in Consolidated Income Statements.

Segment

The Company operates in one segment based upon the financial information used by its Chief Operating Decision Maker ("CODM") in evaluating the financial performance of its business and allocating resources. The single segment represents the Company's core business of selling salt products to its customers. See Note 18 Segment Information for further information on the Company's reportable segment.

Recent Accounting Pronouncements

Accounting guidance recently adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which requires all public entities, including public entities with a single reportable segment, to provide, in interim and annual periods, one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance. Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures.