Novanta completes acquisition of Runway Buyer

Q: How much did NOVT pay to acquire Runway Buyer?

Novanta completed the acquisition for approximately $1.2 billion in cash, subject to customary adjustments based on cash, working capital, debt and transaction expenses. The transaction’s pro forma information states an aggregate purchase price of approximately $1,450.6 million; a $250.0 million milestone payment remains payable to the seller on or before January 8, 2027.

Runway Buyer’s outstanding bank indebtedness was paid in full from purchase-price proceeds when the acquisition closed on July 23, 2026.

Filing Impact

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Form Type

8-K/A

Rhea-AI Filing Summary

Novanta Inc. completed its acquisition of all outstanding limited liability company interests in Runway Buyer, LLC on July 23, 2026. The acquisition was for approximately $1.2 billion in cash, subject to customary adjustments based on cash, working capital, debt and transaction expenses. A $250.0 million milestone payment remains payable to the seller on or before January 8, 2027. The transaction’s pro forma information states an aggregate purchase price of approximately $1,450.6 million, funded through cash on hand and $616.0 million of borrowings.

A private placement closed June 11, 2026, generated approximately $300 million gross and $287.6 million net after $12.4 million of placement-agent fees and offering expenses; the net proceeds funded the acquisition. Runway Buyer reported $136.12 million in 2025 revenue and $11,462,563 in net income. Unaudited pro forma combined results report 2025 revenue of $1,116.720 million and a $7.385 million net loss; these figures are informational and not necessarily indicative of actual combined results.

Positive

None.

Negative

Minor pointPro forma combined 2025 net loss: $7.385 million.

Filing Explained

The completed common-share placement reduces existing holders’ ownership; pro forma 2025 weighted-average shares include 2,143 thousand financing shares.

This amendment adds audited 2025 and unaudited first-quarter 2026 financial statements for Runway Buyer and pro forma acquisition information; the acquisition closed on July 23, 2026, and the completed common-share placement reduces existing holders’ percentage ownership absent offsetting changes.

The pro forma table labels its share figures as weighted averages and presents the combined case as if the transaction occurred on January 1, 2025.

For 2025, it shows basic weighted-average shares of 36,589 thousand for Novanta and 38,732 thousand combined, including 2,143 thousand attributed to the equity issuance.

The purchase-price allocation is preliminary and may be revised during a measurement period of up to 12 months after closing; the filing says revisions may be material.

8-K Event Classification

Item 9.01 — Financial Statements and Exhibits

1 item

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, or exhibit attachments filed with this report.

Key Figures

Cash consideration: Approximately $1.2 billion Aggregate purchase price: Approximately $1,450.6 million Milestone payment: $250.0 million +5 more

8 metrics

Cash consideration Approximately $1.2 billion Runway Buyer acquisition, July 23, 2026; subject to customary adjustments

Aggregate purchase price Approximately $1,450.6 million Transaction pro forma information

Milestone payment $250.0 million Payable to the seller on or before January 8, 2027

Borrowings $616.0 million Acquisition financing

Net private-placement proceeds Approximately $287.6 million June 11, 2026 closing; used to fund the acquisition

Revenue $136.12 million Runway Buyer, year ended December 31, 2025

Net income $11,462,563 Runway Buyer, year ended December 31, 2025

Pro forma combined net loss $7.385 million Year ended December 31, 2025; unaudited pro forma results

Key Terms

acquisition method of accounting, measurement period, delayed draw term loan facility, transaction accounting adjustments

4 terms

acquisition method of accounting financial

"prepared using the acquisition method of accounting"

measurement period financial

"could be up to twelve months from the Closing"

delayed draw term loan facility financial

"revolving credit facility and delayed draw term loan facility"

A delayed draw term loan facility is a committed loan that a borrower can tap in one or more installments at specified future times after meeting agreed conditions, rather than receiving the full amount upfront. For investors it matters because it provides a ready source of cash that can change a company’s financial strength, leverage and interest costs when drawn—similar to having a reserved credit line you can use later, which affects liquidity and the risk profile of the business.

transaction accounting adjustments financial

"reflects only Transaction Accounting Adjustments"

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How much did NOVT pay to acquire Runway Buyer?

Novanta completed the acquisition for approximately $1.2 billion in cash, subject to customary adjustments based on cash, working capital, debt and transaction expenses. The transaction’s pro forma information states an aggregate purchase price of approximately $1,450.6 million; a $250.0 million milestone payment remains payable to the seller on or before January 8, 2027.

How did NOVT fund the Runway Buyer acquisition?

The transaction’s pro forma information states it was funded through cash on hand and $616.0 million of borrowings. A private placement closed June 11, 2026, generated approximately $300 million gross and $287.6 million net after $12.4 million in placement-agent fees and offering expenses; the net proceeds funded the acquisition.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Available on EDGAR 10/02/2026 - 04:31 PM Accepted by SEC EDGAR 10/02/2026 - 04:30 PM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 22, 2026

NOVANTA INC.

(Exact name of registrant as specified in its charter)


New Brunswick, Canada	001-35083	98-0110412
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

125 Middlesex Turnpike Bedford, Massachusetts		01730
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (781) 266-5700

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares, no par value	NOVT	Nasdaq Global Select Market
6.50% Tangible Equity Units	NOVTU	Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Explanatory Note

As previously disclosed by Novanta Inc., a New Brunswick corporation (the “Company”) in the Current Report on Form 8-K filed on June 9, 2026 (the “Previous Form 8-K”) with the Securities and Exchange Commission, on June 8, 2026, the Company, Novanta Medical Technologies Corp., a Delaware corporation and an indirect subsidiary of the Company (“Buyer”), Novanta Corporation, a Michigan corporation (“Intermediate Parent”, and together with the Company and the Buyer, the “Buyer Parties”), Runway Midco, LLC, a Delaware limited liability company (“Seller”), and Runway Buyer, LLC, a Delaware limited liability company and direct wholly owned subsidiary of Seller (“Runway Buyer”), entered into an Equity Purchase Agreement (the “Purchase Agreement”), pursuant to which Buyer agreed to acquire from Seller all of the issued and outstanding limited liability company interests (the “Purchased Interests”) of Runway Buyer (the “Transaction”).

On July 23, 2026, the closing of the Transaction (the “Closing”) occurred.

This Current Report on Form 8-K/A is filed as an amendment to the Current Report on Form 8-K filed by the Company on July 27, 2026, pursuant to Item 9.01(a)(3) and (b)(2) of Form 8-K, to include the financial information required pursuant to Item 9.01(a) and (b) of Form 8-K.

Item 9.01 Financial Statements and Exhibits.


	(a)	Financial Statements of Businesses Acquired

Audited consolidated balance sheet of Runway Buyer as of December 31, 2025 and consolidated statement of operations, consolidated statement of member's equity, and consolidated statement of cash flows for the year ended December 31, 2025 and related notes are filed as Exhibit 99.1 to this Current Report on Form 8-K/A and incorporated herein by reference.

Unaudited consolidated balance sheet of Runway Buyer as of March 31, 2026 and consolidated statement of operations, consolidated statement of member's equity, and consolidated statement of cash flows for the three months ended March 31, 2026 and related notes are filed as Exhibit 99.2 to this Current Report on Form 8-K/A and incorporated herein by reference.


	(b)	Pro Forma Financial Information

The unaudited pro forma condensed combined consolidated financial information as of and for the three months ended April 3, 2026, and for the year ended December 31, 2025, and the related notes are attached as Exhibit 99.3 to this Current Report on Form 8-K/A and incorporated herein by reference.


	(d)	Exhibits


Exhibit Number		Description
23.1		Consent of Grant Thornton LLP, Independent Certified Public Accountants
99.1		Audited consolidated financial statements of Runway Buyer, LLC and the related notes thereto as of and for the year ended December 31, 2025
99.2		Unaudited consolidated financial statements of Runway Buyer, LLC and the related notes thereto for the three months ended March 31, 2026
99.3		Unaudited pro forma condensed combined consolidated financial information as of and for the three months ended April 3, 2026 and for the year ended December 31, 2025 and the related notes
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Novanta Inc.

Date: October 2, 2026	By:	/s/ Robert J. Buckley
		Robert J. Buckley
		Chief Financial Officer

EXHIBIT 99.1

Consolidated Financial Statements and Report of Independent Certified Public Accountants

Runway Buyer, LLC

December 31, 2025

Contents


	Page
Report of Independent Certified Public Accountants	3
Consolidated Financial Statements
Consolidated balance sheet	5
Consolidated statement of operations	6
Consolidated statement of member’s equity	7
Consolidated statement of cash flows	8
Notes to consolidated financial statements	9

     REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 

    

grant thornton llp

Salt Lake Hardware Building

155 N. 400 W. Suite 135

Salt Lake City, UT 84103

D +1 801 415 1000

F +1 801 322 0061

Board of Directors

Runway Buyer, LLC

Opinion

We have audited the consolidated financial statements of Runway Buyer, LLC (a Delaware limited liability company) and subsidiaries (the “Company”), which comprise the consolidated balance sheet as of December 31, 2025, and the related consolidated statements of operations, member’s equity, and cash flows for the year then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for opinion

We conducted our audit of the consolidated financial statements in accordance with auditing standards generally accepted in the United States of America (US GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of management for the financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date the consolidated financial statements are available to be issued.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with US GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with US GAAS, we:

•

Exercise professional judgment and maintain professional skepticism throughout the audit.

•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

•

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ GRANT THORNTON LLP

Salt Lake City, Utah

October 2, 2026

Runway Buyer, LLC

CONSOLIDATED BALANCE SHEET


		December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$	8,186,215
Accounts receivable, net of allowance of $140,000		26,148,089
Inventory		26,978,934
Prepaid inventory		153,609
Prepaid expenses and other current assets		1,180,279
Total current assets		62,647,126

Property, plant and equipment, net		23,319,250
Right of use asset		3,719,544
Right of use asset-related party		3,143,078
Deposits on equipment		414,295
Intangible assets, net		93,212,110
Goodwill		165,234,007
Total noncurrent assets		289,042,284

Total assets	$	351,689,410

LIABILITIES AND MEMBER'S EQUITY
Current liabilities
Accounts payable	$	3,053,281
Accrued expenses and other current liabilities		7,353,396
Current portion of lease liability		538,485
Current portion of lease liability-related party		874,126
Income tax payable		252,806
Total current liabilities		12,072,094

Long-term debt, net		204,970,135
Long-term lease liability		3,579,644
Long-term lease liability-related party		2,428,923
Deferred income tax, non-current		11,679,772
Total noncurrent liabilities		222,658,474

Total liabilities		234,730,568

Commitments and contingencies
Total member's equity		116,958,842

Total liabilities and member's equity	$	351,689,410

The accompanying notes are an integral part of these consolidated financial statements.

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF OPERATIONS

Year ended December 31, 2025


		2025
Revenues	$	136,120,000
Cost of goods sold (exclusive of items below)		(54,054,131)
Selling, general and administrative expense		(35,448,721)
Lease expense		(1,671,907)
Lease expense-related party		(956,972)
Depreciation		(3,606,719)
Research and development		(6,546,275)

Income from operations		33,835,275

Other expense
Interest expense		(21,108,147)
Other income, net		197,133

Total other expense		(20,911,014)

Income before income taxes		12,924,261

Income tax expense		(1,461,698)

Net income	$	11,462,563

The accompanying notes are an integral part of these consolidated financial statements.

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF MEMBER’S EQUITY

For the year ended December 31, 2025


	Member’s Interest	Accumulated Deficit	Member's Equity
Balance at December 31, 2024	$ 165,312,731	$ (59,816,452)	$ 105,496,279

Net income	—	11,462,563	11,462,563

Distributions to members	—	—	—

Balance at December 31, 2025	$ 165,312,731	$ (48,353,889)	$ 116,958,842

The accompanying notes are an integral part of these consolidated financial statements.

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended December 31, 2025


		2025
Cash flows from operating activities:
Net income	$	11,462,563
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		14,086,719
Amortization of debt issuance costs		785,764
Provision for doubtful accounts		(114,843)
Deferred income tax benefit		(2,872,049)
Changes in operating assets and liabilities:
Accounts receivable, net		3,169,645
Inventory		(1,166,004)
Prepaid inventory		804,552
Prepaid expenses and other current assets		16,770
Right of use asset and lease liability		46,078
Accounts payable		(1,502,129)
Income taxes receivable/payable		(641,539)
Payroll liabilities		654,777
Accrued expenses		2,004,823
Customer prepayments		340,775
Net cash provided by operating activities		27,075,902

Cash flows from investing activities:
Purchases of property and equipment		(3,856,975)
Net cash used in investing activities		(3,856,975)

Cash flows from financing activities:
Payments on revolving debt		(11,000,000)
Borrowings on revolving debt		4,000,000
Payments on term debt		(11,684,357)
Net cash used in financing activities		(18,684,357)

CHANGE IN CASH		4,534,570
Cash, beginning of year		3,651,645
Cash, end of year	$	8,186,215


Supplemental information
Cash paid for interest	$	21,893,910
Cash paid for taxes	$	4,905,570
Non-cash investing and financing activities
Property and equipment purchased with accounts payable	$	127,613

The accompanying notes are an integral part of these consolidated financial statements.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2025

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Basis of Presentation

Runway Buyer, LLC (the “Company”) is a Delaware limited liability company and was formed on June 7, 2019 for the purpose of acquiring Riverpoint Medical, LLC (“Riverpoint”) and is a wholly owned subsidiary of Runway Parent, LLC. Headquartered in Portland, Oregon, Riverpoint is a developer, designer, and manufacturer of medical devices focused on advanced surgical fiber and related technologies, such as bio-absorbable sutures, suture-based implantable devices, advanced needles and high strength medical fiber. Riverpoint’s technologies are used in various markets including wound closure, sports medicine, animal health, cardiology and regenerative medicine. The Company manufactures products in its facilities in the United States and Costa Rica.

The consolidated financial statements include the accounts of the Company’s wholly owned subsidiaries, Riverpoint Medical, LLC, Riverpoint Medical CR, SRL, and CP Medical Corporation. All intercompany balances have been eliminated.

The accompanying financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“US GAAP”).

Reclassification and Correction of Immaterial Error

The accompanying financial statements for the year ended December 31, 2025 were previously issued on April 10, 2026. In connection with the preparation of these financial statements for inclusion in an SEC filing, certain amounts and disclosures have been reclassified to conform to the requirements of Rule 3-05 of SEC Regulation S-X. Additionally, $5,116,957 of amounts previously reported as Selling, general and administrative expenses were reclassified as Cost of goods sold. The reclassifications affected presentation and disclosure only and had no impact on previously reported results of operations, financial position, member’s equity, or cash flows.

Accounting Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management estimates, judgments, and assumptions are continually evaluated based on available information and experiences; however, actual amounts could differ from those estimates. Significant estimates include the allowance for doubtful accounts, useful lives of property, plant and equipment, the valuation of intangible assets and other long-lived assets, and the recoverability of deferred tax assets.

Revenue Recognition

The Company recognizes revenue in accordance with the five-step model prescribed by Accounting Standards Codification (“ASC”) 606 that includes: (1) identifying the contract; (2) identifying the performance obligations; (3) determining the transaction price; (4) allocating the transaction price to the performance obligations; and (5) recognizing revenue when (or as) performance obligations are satisfied. The Company provides goods and services to customers based on contractual terms. The duration of the contract does not extend beyond the promised goods or services already transferred. The transaction price of each distinct promised product or service specified in the invoice is based on its relative standalone selling price. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product to a customer at a point in time. The Company is the principal in a third-party transaction as the Company manufactures its products and has control over transfer of its products to customers. The Company’s shipping terms provide the primary indicator of the transfer of control. The Company’s general shipping terms are F.O.B. shipping point, where title and risk and rewards of ownership transfer at the point when the products leave the Company’s warehouse. The Company recognizes revenue based on the consideration specified in the invoice with a customer, excluding any sales incentives, discounts, and amounts collected on behalf of third parties (i.e., governmental tax authorities).

Rights of return create variability in the transaction price and are not considered a separate performance obligation. The estimated allowance for returns is based on historical percentage of returns and allowance from prior periods and the customer’s historical purchasing pattern. This estimate is deducted from revenues based on the gross transaction price at the time revenue is initially recognized.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

The Company may offer rebates to customers under contractual arrangements. Rebates represent variable consideration and are accounted for as a reduction of revenue in the period in which the related revenue is recognized. Rebates payable to customers were $2,035,917 and $123,444 as of December 31, 2025 and January 1, 2025, respectively.

The Company recognizes shipping and handling activities that occur after the customer has obtained control of goods as a fulfillment cost rather than as an additional promised service. Therefore, the Company recognizes revenue and accrues shipping and handling costs when the control of goods transfers to the customer upon shipment.

Contract assets related to revenue were $245,086 for the year ended December 31, 2025. Contract assets are included in prepaid expenses and other current assets. The Company's contract assets represent unbilled amounts arising when the Company has transferred control of goods to a customer but has not yet issued an invoice; such amounts are reclassified to accounts receivable once the right to consideration becomes unconditional.

Contract liabilities consist of payments from customers in advance of satisfying performance obligations and accrued customer rebates. Contract liabilities related to customer prepayments and accrued customer rebates totaled $3,312,226 and $1,058,978 as of December 31, 2025 and January 1, 2025, respectively.

The following table presents revenue disaggregated by geography during the twelve months ended December 31, 2025:


	2025

United States	$ 110,572,022
Rest of Americas	13,512,387
Europe	6,118,299
Asia	2,114,788
Other	3,802,504

Total	$ 136,120,000

The opening and closing balances of contract assets were not material to the consolidated financial statements, and there were no significant changes in the contract asset balance during the year ended December 31, 2025 resulting from business combinations, cumulative catch-up adjustments to revenue, or impairment. The net accounts receivable balance as of January 1, 2025 was $29,202,891.

Cash

The Company considers all highly liquid investments with an original maturity date of three months or less at the date of acquisition to be cash equivalents. The Company maintains its cash in bank deposit accounts at institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”). At times, cash balances may exceed FDIC insurance limits.

Accounts Receivable

Accounts receivable are generally based on amounts billed to the customer in accordance with contractual provisions. The Company extends credit based on an evaluation of each customer’s financial condition and does not require collateral. Generally, accounts receivable are due no more than 60 days after the issuance of the invoice, however, there are significant customers with extended 90-day payment terms. Receivables past due more than 90 days are considered delinquent. The Company maintains allowances for potential credit losses. The Company has recorded an allowance for credit losses in the amount of $140,000 as of December 31, 2025.

For the year ended December 31, 2025, changes in the allowance for doubtful accounts were as follows:


Balance at beginning of the year	$ 390,000
Recoveries of amounts previously reserved	(114,843)
Write off	(135,157)
Balance at end of the year	$ 140,000

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

Inventory

Inventory consists of raw materials and finished goods and are valued at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (“FIFO”) method. The Company maintains inventory reserves for excess, obsolete or slow-moving inventory at levels management believes are sufficient. The Company estimates such reserves primarily based on the age of the inventory and usage compared to inventory levels on an item-by-item basis.

Property, Plant, and Equipment

Property, plant, and equipment are stated at cost or fair value at the date of acquisition. Depreciation and amortization of property, plant, and equipment are computed using the straight-line method based upon the shorter of the estimated useful lives or the term of any associated lease, ranging from five to 40 years. Expenditures for repairs and maintenance are expensed as incurred; however, major improvements that expand the capabilities or extend the life of the asset are capitalized. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining term of the related lease, including reasonably certain renewal periods. At the time of retirement or other disposal of property, plant, and equipment, the cost and related accumulated depreciation or amortization are removed from their respective accounts and the resulting gain or loss, if any, is included in other expense in the accompanying consolidated statement of operations.

The Company assesses property, plant, and equipment for impairment whenever changes in circumstances indicate the carrying values of the assets may not be recoverable. Determination of the recoverability is based on an estimate of the undiscounted future cash flows resulting from the use of the assets in comparison to the carrying amount. If the carrying amount of the asset exceeds the estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. For the year ended December 31, 2025, there was no impairment of property, plant, and equipment assets.

Intangible Assets

Intangible assets consist primarily of customer relationships, trade names and developed technology and are being amortized on a straight-line basis over the estimated life of the assets ranging from 10 to 16 years.

The Company assesses intangible assets with finite lives for impairment whenever changes in circumstances indicate the carrying values of the assets may not be recoverable. Determination of the recoverability is based on an estimate of the undiscounted future cash flows resulting from the use of the assets in comparison to the carrying amount. If the carrying amount of the asset exceeds the estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. No intangible asset impairment charges have been recorded for the year ended December 31, 2025.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations. Goodwill and indefinite-lived intangibles are not amortized, but rather evaluated for impairment on an annual basis, or more frequently if events or circumstances indicate potential impairment. The Company performs a qualitative assessment as of December 31 to determine whether it is more likely than not that goodwill is impaired.

If the Company were to fail the qualitative assessment, it would perform an impairment test by determining the fair value of each reporting unit using a discounted cash flow model and comparing this fair value to the carrying value of the reporting unit, including goodwill. If the fair value was less than the carrying value of the reporting unit, the Company would recognize an impairment for the difference. The Company’s estimate of future discounted cash flows would be based upon assumptions about the expected future operating performance of the Company. For the year ended December 31, 2025, there was no impairment of goodwill.

Shipping and Handling Costs

Shipping and handling costs are considered a fulfillment activity and include various freight, packaging, delivery and warehouse or facility handling charges and are recorded in cost of goods sold in the accompanying consolidated statement of operations.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

Research and Development

Expenditures for research, development and engineering of products are expensed as incurred.

Advertising Expense

Advertising and promotion expenses are expensed as incurred. Advertising expenses included in selling, general and administrative expenses were $39,037 for the year ended December 31, 2025.

Income Taxes

The Company is taxed as a C-corporation. The Company accounts for income taxes in accordance with the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance on net deferred tax assets is recorded when it is more likely than not that such assets will not be realized.

The Company follows the guidance related to the accounting for uncertainty in income taxes that prescribes a minimum recognition threshold that a tax position is required to meet before being recognized. It also provides guidance for de-recognition, measurement and classification of uncertain tax positions, treatment of interest and penalties, disclosure requirements, and transition. It is the Company’s policy to record uncertain tax positions, interest, and penalties in tax expense.

Fair Value Measurements

Financial Accounting Standards Board (“FASB”) ASC Topic 820, Fair Value Measurements and Disclosures, defines fair values as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities;

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, directly or indirectly; and

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. These valuations require significant judgment.

These financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. As of December 31, 2025, there were no financial instruments within Level 3 of the hierarchy.

Fair Value of Financial Instruments

The carrying amounts of the Company's cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values because of the short-term maturities of these instruments. The Company's long-term debt bears interest at variable rates that reset periodically with prevailing market rates; accordingly, the carrying amount of the Company's long-term debt approximates its fair value as of December 31, 2025. The fair value of the Company's long-term debt is categorized within Level 2 of the fair value hierarchy. There were no transfers between levels of the fair value hierarchy during the year ended December 31, 2025.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

Leases

The Company determines if an arrangement is a lease at inception. Operating lease right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset during the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating leases are included in ROU assets, current operating lease liabilities, and long-term operating lease liabilities on the Company’s consolidated balance sheet. Lease ROU assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at commencement date calculated under the risk-free rate which approximates the incremental borrowing rate. ROU assets also include any lease payments made at or before lease commencement and exclude any lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of 12 months or less are not recognized on the consolidated balance sheet. The Company’s leases do not contain any residual value guarantees, variable lease costs, or material restrictive covenants. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has elected the practical expedient permitted under ASC 842 to not separate lease and non‑lease components for its operating leases related primarily to real estate and equipment.

Recently Adopted Accounting Pronouncements

In March 2024, the Financial Accounting Standards Board issued Accounting Standards Update 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The amendments clarify the application of the scope guidance in Topic 718 to profits interests and similar awards by adding illustrative examples addressing common award features. The Company has not adopted the amendments as of the date of these financial statements; therefore, the provisions of ASU 2024-01 are not reflected in the accompanying consolidated financial statements.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The amendments provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid. The Company adopted ASU 2023-09 beginning with its consolidated financial statement disclosures for the year ended December 31, 2025.

NOTE 2 - Supplementary balance sheet information

Inventories, net of reserve of $989,667 as of December 31 consisted of the following:


	2025

Raw materials	$ 22,916,340
Work in process	1,300,001
Finished goods	2,762,593

Total inventory	$ 26,978,934

Accrued expenses and other current liabilities as of December 31 consisted of the following:


	2025

Payroll liabilities	$ 3,138,243
Accrued rebates	2,035,917
Customer prepayment	1,276,309
Other	902,927

Total accrued expenses and other current liabilities	$ 7,353,396

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

NOTE 3 - PROPERTY AND EQUIPMENT

The estimated useful lives, cost, and accumulated depreciation of property, plant, and equipment as of December 31 are as follows:


	Useful Life	2025

Leasehold improvement	15 - 40 Years	$ 9,994,085
Cleanroom equipment	5 - 10 Years	3,292,866
Production equipment	7 - 10 Years	16,125,430
Molds and dyes	7 Years	862,727
Office equipment	5 - 7 Years	1,583,707
Furniture and fixtures	7 Years	829,114
		32,687,929

Less: accumulated depreciation		(10,355,807)

		22,332,122

Construction in progress		987,128

Total property, plant, and equipment, net		$ 23,319,250

Property, plant, and equipment, net are aggregated based on the location of the assets. A summary of the locations is as follows:


	2025

United States	$ 8,097,148
Costa Rica	15,222,102

Total property, plant, and equipment, net	$ 23,319,250

Depreciation expense was $3,606,719 for the year ended December 31, 2025.

NOTE 4 - INTANGIBLE ASSETS

Identifiable intangible assets consist of the following as of December 31, 2025:


	Useful Life	Cost	Accumulated Amortization	Net Book Value

Customer relationships	10-16 years	$ 134,300,000	$ (57,497,473)	$ 76,802,527
Trade name	Indefinite life	14,000,000	—	14,000,000
Developed technology	12 years	4,400,000	(1,990,417)	2,409,583

		$ 152,700,000	$ (59,487,890)	$ 93,212,110

The 2025 weighted-average remaining useful life of the intangibles is approximately 8 years.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

Amortization expense was $10,480,000 for the year ended December 31, 2025 and is recorded in Selling, general, and administrative expense. Amortization expense for intangible assets expected to be charged to operations, for years ending after December 31, 2025, are as follows:


Year Ending December 31,

2026	$ 10,480,000
2027	10,480,000
2028	10,480,000
2029	9,929,998
2030	9,380,000
Thereafter	28,462,112

	$ 79,212,110

NOTE 5 - GOODWILL

The goodwill balance as of January 1, 2025 and for the year ended December 31, 2025 was $165,234,007.

NOTE 6 - LONG-TERM DEBT

The Company entered into a Credit Agreement with multiple participating lenders on June 21, 2019. The agreement includes a term loan of $110,000,000, a revolving line of credit with availability of $20,000,000, letters of credit with availability of $5,000,000, and a swing line loan with availability of $5,000,000. Both the letters of credit and swing line count against the revolver availability if utilized.

On September 3, 2021, the Company entered into the First Amendment to the Credit Agreement, under which the lenders extended an additional aggregate principal amount on the term loan of $71,000,000. As a result of the Amendment, the Company incurred $1,157,000 of debt issuance costs, which the Company is amortizing over the term of the loan. The interest rate on the note payable is variable in nature and is based on the Company’s consolidated total leverage ratio. The interest rate ranges from 4.5% - 5.75% plus the reference rate.

On December 28, 2022, the Company entered into the Second Amendment to the Credit Agreement, under which the lenders changed LIBOR benchmark interest rate to SOFR with no other changes. The interest rate ranges from 4.5% - 5.75% plus the reference rate.

On January 22, 2024, the Company entered into the Third Amendment to the Credit Agreement, under which Incremental Term Loan Commitments in an aggregate principal amount of $35,700,000 was granted to purchase CP Medical Corporation.

On August 23, 2024, the Company entered into the Fourth Amendment to the Credit Agreement under which the Revolving Loan Commitment was determined to be terminated on June 21, 2027.

On September 4, 2024, the Company entered into the Fifth Amendment to the Credit Agreement, under which the Company requested Incremental Revolving Loan Commitments in an aggregate principal amount of $15,000,000 and Incremental Term Loan Commitments in an aggregate principal amount of $10,000,000.

On September 9, 2025, the Company amended the Credit Agreement to revise the leverage‑based interest rate pricing grid. As a result, the applicable interest rate now ranges from 4.5% to 6.0% plus the reference rate.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

Long-term debt consists of the following at December 31:


	2025

Note payable in quarterly installments payments of $447,202 due in full June 21, 2027, interest at SOFR plus 4.5% - 6.00%.	$ 206,129,155
Line of credit, interest at SOFR plus 4.5% - 6.00%.	—

	206,129,155
Less: debt issuance costs	(1,159,020)

	204,970,135
Less: current portion of long-term debt	—

	$ 204,970,135

During the year ended December 31, 2025, the Company made voluntary prepayments on its term loan in excess of the required scheduled principal payments. As a result, no principal payments are contractually due within the next twelve months as of December 31, 2025, and therefore no current portion of long‑term debt is presented on the consolidated balance sheet. The Company does not incur commitment fees, and no special withdrawal conditions exist beyond standard default provisions.

The line of credit requires payment of a fee payable to each lender party to the agreement, in proportion to that Lender’s pro rata share in respect of the line commitments equal to the average of the daily excess of the line of credit availability over the aggregate principal amount outstanding on the line of credit multiplied by 0.375% per annum.

The loans contain a maximum leverage ratio as part of the debt covenant. The Company was in compliance with all covenants as of December 31, 2025. Substantially all the assets of the Company are pledged as collateral to the Credit Agreement. The Credit Agreement requires the Company to maintain a maximum consolidated total leverage ratio not to exceed 8.00:1.00, tested on a quarterly basis. The weighted-average interest rate on the Company's outstanding borrowings was 8.17% as of December 31, 2025. The Company's obligations under the Credit Agreement are secured by a first-priority lien on, and security interest in, substantially all of the Company's assets, including accounts receivable, inventory, equipment, intellectual property, and the equity interests of its subsidiaries. There were no covenant violations as of December 31, 2025.

Minimum future principal payments of debt are as follows:


Year Ending December 31,

2026	$ —
2027	206,129,155
2028	—
2029	—
2030	—
Thereafter	—

	$ 206,129,155

NOTE 7 - MEMBERSHIP INTERESTS

Runway Buyer is wholly owned by Runway Parent, which is represented by a membership interest of $165,312,731 as of December 31, 2025.

NOTE 8 - DEFINED CONTRIBUTION PLAN

The Company participates in a 401K defined contribution profit sharing plan. The plan covers all regular full-time employees who are at least age 21. Total expense related to the plan was $850,296 for the year ended December 31, 2025.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

NOTE 9 - INCOME TAXES

Components of the Company’s income before income taxes for the year ended December 31, 2025 are as follows:


	2025
Income before provision for income taxes was as follows:
United States	$ 6,263,828
Foreign	6,660,433
Income before income taxes	$ 12,924,261

The Company’s income tax expense for the year ended December 31, 2025 consisted of the following:


	2025
U.S. Federal:
Current	$ 3,698,550
Deferred	(2,107,860)
Total	1,590,690
U.S. State:
Current	766,500
Deferred	(764,189)
Total	2,311

Foreign:
Current	(131,303)
Deferred	—
Total	(131,303)
Total income tax expense	$ 1,461,698

The Company’s effective income tax rate differs from the U.S. Federal Statutory income tax rate as itemized below:


	Amount	Percentage
U.S. federal statutory income tax rate	$ 2,714,095	21.00%
Domestic state and local income taxes, net of federal effect(1)	(313,745)	(2.43)%
Foreign tax effects
Costa Rica
Statutory rate differential	(1,398,577)	(10.82)%
Effect of cross-border tax laws
Foreign-derived intangible income	(784,010)	(6.07)%
Global intangible low-taxed income	1,268,868	9.82%
Nontaxable and nondeductible items
Others	49,811	0.39%
Tax credits
Research and development tax credits	(132,835)	(1.03)%
Other adjustments	58,091	0.45%
Effective tax rate	$ 1,461,698	11.31%

(1)

The state and local jurisdiction that contributes to the majority (greater than 50%) of the tax effect in this category is Oregon.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

The Company accounts for income taxes under the asset-liability method for those entities classified for tax purposes as “C Corporations.” Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided when it is more likely than not that the benefits of existing deferred tax assets will not be realized in a future period.

Significant components of the Company’s deferred tax assets and liabilities as of December 31 are as follows:


	2025
Deferred tax assets
Accruals and reserves	$ 287,441
Inventory	433,145
Interest limitation carryforward	8,866,185
Operating lease liabilities	878,490
Other	104,778

Total deferred tax assets	10,570,039

Deferred tax liabilities
Depreciation and amortization	(21,292,373)
Operating right-of-use assets	(835,044)
Other	(122,394)
	(22,249,811)
Net deferred tax liabilities	$ (11,679,772)

As of December 31, 2025, the Company had no federal and state net operating loss carryforwards.

The Company files income tax returns with the U.S. federal government, Costa Rica, and various state jurisdictions. The Company is subject to federal income tax examinations based upon statute of limitations for years 2021 forward. The Company operates in Costa Rica and a number of state and local jurisdictions, most of which have never audited the Company's records. Accordingly, the Company is subject to state and local and foreign income tax examinations based upon the various statutes of limitations in each jurisdiction. The Company is not currently under examination in any jurisdiction.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:


Gross unrecognized tax benefit at beginning of the year	$ 595,918
Settlements and effective settlements with tax authorities	(595,918)
Changes in balances related to tax position taken during prior periods	—
Changes in balances related to tax position taken during current period	—
Lapse of statute of limitations	—
Gross unrecognized tax benefit at end of year	$ —

For uncertain tax positions, the Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold it is then measured as the largest amount of liability that is greater than 50% likely of being realized upon ultimate settlement. As of December 31, 2025 and 2024, there is $0 and $595,918 of uncertain tax positions respectively. The total amount of such unrecognized tax benefits that if recognized would favorably affect the effective income tax rate in future periods is $0 at the end of 2025.

As of December 31, 2025 and 2024, there was $3,110 and $79,154 of interest and penalties related to uncertain tax positions respectively. The Company's policy is to record tax related interest and penalties within the tax provision.

The Company’s foreign operations benefit from a tax holiday, which is set to expire in 2030. This tax holiday may be extended when certain conditions are met or may be terminated early if certain conditions are not met. The tax benefit attributable to this tax holiday, before taking into consideration other U.S. tax provisions, was $399,593 for the year ending December 31, 2025.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

The amount of cash income taxes paid by or refunded to the Company were as follows:


Federal	$ 4,425,000
State and Local
California	378,767
Indiana	591,306
Oregon	(822,316)
Other	332,813
Income taxes paid, net of amounts refunded	$ 4,905,570

The One Big Beautiful Bill Act (“OB3”) was enacted on July 4, 2025, which includes wide-ranging tax reforms for businesses. OB3 extended and modified certain provisions of the Tax Cuts & Jobs Act (“TCJA”) and made certain key elements permanent, including 100% bonus depreciation, immediate expensing of domestic research costs and the deductibility of business interest expense. The Company’s consolidated financial statements for the year ended December 31, 2025 reflect adjustments related to OB3. While the enacted legislation did not have a material impact on the Company’s effective tax rate for the year ended December 31, 2025, it resulted in a favorable change in the timing of cash taxes due to certain accelerated deductions. The Company will continue to assess the impact of OB3 provisions that become effective in future years and monitor potential outcomes based on its facts and circumstances each upcoming year.

NOTE 10 - RELATED PARTY TRANSACTIONS

The Company leases its production facility, offices, and a warehouse from a member under an operating lease. The lease requires monthly payments of $58,726 escalating annually by 3%. The current non‑cancellable lease term extends through June 2029 and includes two additional renewal options of five years each. The renewal options are not included in the measurement of the related right‑of‑use asset and lease liability, as the Company is not reasonably certain to exercise the renewal options as of the balance sheet date. If the Company elects to exercise a renewal option, the lease will be remeasured at that time. The Company made lease payments of $736,521 to the member for the year ended December 31, 2025. ROU asset and lease liability related to the member is $2,279,238 and $2,406,060 as of December 31, 2025. The lease liability consisted of $634,677 included in the current portion of operating lease liabilities and $1,771,383 was included in long-term operating lease liabilities.

In 2023 the Company entered into a new operating lease for an office space with Butler Block LLC., which is a related party entity. The lease requires a monthly payment of $21,332 escalating annually by 3%. The current non‑cancellable lease term extends through June 2029 and includes three additional renewal options of five years each. The renewal options are not included in the measurement of the related right‑of‑use asset and lease liability, as the Company is not reasonably certain to exercise the renewal options as of the balance sheet date. If the Company elects to exercise a renewal option, the lease will be remeasured at that time. The Company made lease payments of $255,555 to this vendor for the year ended December 31, 2025. The ROU asset and lease liability related to this vendor is $863,840 and $896,989 as of December 31, 2025. The lease liability of $896,989 consisted of $239,449 included in the current portion of operating lease liabilities and $657,540 was included in long-term operating lease liabilities.

During 2025, the Company made $685,526 of inventory related purchases with Western Filament, Inc, a related party entity.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

NOTE 11 - LEASES

The Company has operating leases for corporate offices, warehouses, parking lots, and equipment with terms expiring approximately one year to five years from reporting date, some of which included options to extend the lease.


	December 31, 2025

Operating lease right-of-use assets	$ 3,719,544
Operating lease right-of-use assets – related party	3,143,078
Operating lease liabilities	(4,118,129)
Operating lease liabilities – related party	(3,303,049)
Current lease liabilities	(538,485)
Current lease liabilities – related party	(874,126)
Long-term lease liabilities	(3,579,644)
Long-term lease liabilities – related party	(2,428,923)

The Company did not incur variable or short‑term lease costs during the periods presented. Accordingly, all lease costs recognized relate to fixed payments under operating leases. For the year ended December 31, 2025, total operating lease costs were $2,628,879. The weighted‑average remaining lease terms were 5.31 years and the weighted‑average discount rate was 3.7% for the period.

Total cash paid for operating lease liabilities was $2,144,386 for the year ended December 31, 2025.

Future minimum lease payments under the leases are as follows:


Year Ending December 31,

2026	$ 1,796,814
2027	1,600,770
2028	1,610,126
2029	1,093,982
2030	607,530
Thereafter	1,377,784

	8,087,006

Less: imputed interest	665,828

Total lease liabilities	$ 7,421,178

NOTE 12 - CONCENTRATIONS

The Company had two customers with over 10% of total sales accounting for 30% of total sales for the year ended December 31, 2025. As of December 31, 2025, three customers with over 10% of total accounts receivable accounted for 62% of the total accounts receivable balance. There were no vendors with over 10% of total purchases for the year ended December 31, 2025.

NOTE 13 - COMMITMENTS AND CONTINGENCIES

Purchase Commitments

In the normal course of business, the Company enters into noncancelable purchase commitments with certain suppliers for raw materials and finished goods. As of December 31, 2025, the Company had unconditional purchase obligations that are fixed and determinable totaling approximately $20,213,981, all due within the next twelve months of the balance sheet date.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

For the year ended December 31, 2025

Legal Proceedings

The Company is subject to various claims, disputes, and legal proceedings that arise in the ordinary course of business. Management assesses the likelihood of any adverse outcomes and records a loss contingency when a loss is both probable and reasonably estimable. Management does not believe that the ultimate resolution of any currently pending matters will have a material adverse effect on the Company's financial position, results of operations, or cash flows. As of December 31, 2025, no material amounts have been accrued for loss contingencies.

NOTE 14 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events through October 2, 2026, which is the date these consolidated financial statements were issued.

On July 23, 2026, Novanta Inc., a Canadian corporation, through indirect subsidiaries, completed the acquisition of all of the issued and outstanding limited liability company interests of the Company for approximately $1.2 billion in cash, subject to customary adjustments based on cash, working capital, debt and transaction expenses of the Company as of the closing of the transaction. In addition, a milestone payment amount of $250.0 million remains payable by Novanta Inc. on or before January 8, 2027. On July 23, 2026, in connection with the closing of the acquisition, the Company’s outstanding bank indebtedness was paid in full out of the purchase price proceeds.

EXHIBIT 99.2

Runway Buyer, LLC

March 31, 2026 (Unaudited)

Contents


	Page
Condensed Consolidated Financial Statements (unaudited)
Consolidated balance sheets	3
Consolidated statement of operations	4
Consolidated statement of member’s equity	5
Consolidated statement of cash flows	6
Notes to consolidated financial statements	7

Runway Buyer, LLC

CONSOLIDATED BALANCE SHEETS


		March 31, 2026		December 31, 2025

ASSETS

Current assets
Cash and cash equivalents	$	6,992,411	$	8,186,215
Accounts receivable, net of allowance of $140,000 and $140,000, respectively		27,130,996		26,148,089
Inventory		26,141,704		26,978,934
Prepaid inventory		362,775		153,609
Prepaid expenses and other current assets		831,208		1,180,279
Total current assets		61,459,094		62,647,126

Property, plant and equipment, net		23,235,298		23,319,250
Right of use asset		3,806,737		3,719,544
Right of use asset-related party		2,931,166		3,143,078
Deposits on equipment		610,811		414,295
Intangible assets, net		90,592,110		93,212,110
Goodwill		165,234,007		165,234,007

Total noncurrent assets		286,410,129		289,042,284

Total assets	$	347,869,223	$	351,689,410

LIABILITIES AND MEMBER'S EQUITY

Current liabilities
Accounts payable	$	2,388,837	$	3,053,281
Accrued expenses and other current liabilities		6,120,636		7,353,396
Current portion of lease liability		584,726		538,485
Current portion of lease liability-related party		888,755		874,126
Income tax payable		853,618		252,806

Total current liabilities		10,836,572		12,072,094

Long-term debt, net		200,166,576		204,970,135
Long-term lease liability		3,623,172		3,579,644
Long-term lease liability-related party		2,201,450		2,428,923
Deferred income tax, non-current		11,679,772		11,679,772

Total noncurrent liabilities		217,670,970		222,658,474

Total liabilities		228,507,542		234,730,568

Commitments and contingencies
Total member's equity		119,361,681		116,958,842

Total liabilities and member's equity	$	347,869,223	$	351,689,410

The accompanying notes are an integral part of these consolidated financial statements.

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF OPERATIONS

For the three months ended March 31, 2026




Revenues	$	33,457,338

Cost of goods sold (exclusive of items below)		(13,430,211)
Selling, general and administrative expense		(9,032,861)
Lease expense		(220,262)
Lease expense-related party		(239,243)
Depreciation		(1,002,525)
Research and development		(2,047,482)

Income from operations		7,484,754

Other expense
Interest expense		(4,465,262)
Other income, net		13,600

Total other expense		(4,451,662)

Income before income taxes		3,033,092

Income tax expense		(630,253)

Net income	$	2,402,839

The accompanying notes are an integral part of these consolidated financial statements.

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF MEMBER’S EQUITY

For the three months ended March 31, 2026


	Member’s	Accumulated	Member's
	Interest	Deficit	Equity
Balance at December 31, 2025	$ 165,312,731	$ (48,353,889)	$ 116,958,842
Net income	—	2,402,839	2,402,839
Distributions to members	—	—	—
Balance at March 31, 2026	$ 165,312,731	$ (45,951,050)	$ 119,361,681

The accompanying notes are an integral part of these consolidated financial statements.

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended March 31, 2026



Cash flows from operating activities:
Net income	$	2,402,839
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		3,622,525
Amortization of debt issuance costs		196,441
Changes in operating assets and liabilities:
Accounts receivable, net		(982,907)
Inventory		837,230
Prepaid inventory		(209,166)
Prepaid expenses and other current assets		349,071
Right of use asset and lease liability		1,644
Accounts payable		(792,057)
Income taxes receivable/payable		600,812
Payroll liabilities		577,641
Accrued expenses		(1,611,246)
Customer prepayments		(199,155)
Net cash provided by operating activities		4,793,672

Cash flows from investing activities:
Purchases of property and equipment		(987,476)
Net cash used in investing activities		(987,476)

Cash flows from financing activities:
Payments on term debt		(5,000,000)
Net cash used in financing activities		(5,000,000)
CHANGE IN CASH		(1,193,804)
Cash, beginning of year		8,186,215
Cash, end of period	$	6,992,411

Supplemental information
Cash paid for interest	$	4,268,821
Cash paid for taxes	$	28,941
Non-cash investing and financing activities
Property and equipment purchased with accounts payable	$	127,613

The accompanying notes are an integral part of these consolidated financial statements.

Runway Buyer, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2026

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the Company's financial position as of March 31, 2026, and its results of operations and cash flows for the three months ended March 31, 2026.

The condensed consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes required by US GAAP for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2025. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the full fiscal year ending December 31, 2026.

In March 2024, the Financial Accounting Standards Board issued Accounting Standards Update 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards. The amendments clarify the application of the scope guidance in Topic 718 to profits interests and similar awards by adding illustrative examples addressing common award features. The Company adopted the amendments on January 1, 2026 using the retrospective transition method. The Company previously accounted for its profits interest unit awards as share-based payment arrangements under Topic 718. Accordingly, adoption of the amendments did not change the Company’s accounting for those awards and did not have a material effect on its condensed consolidated financial statements.

Other than the change mentioned above, there have been no additional material changes to the Company's significant accounting policies from those described in the Company's audited consolidated financial statements as of and for the year ended December 31, 2025. Accordingly, those policies are not repeated herein, and the interim disclosures required by ASC 270 are presented in the notes below.

Revenue Recognition

Contract assets related to revenue were $163,876 and $245,086 as of March 31, 2026 and December 31, 2025, respectively. Contract assets are included in prepaid expenses and other current assets. The Company's contract assets represent unbilled amounts arising when the Company has transferred control of goods to a customer but has not yet issued an invoice; such amounts are reclassified to accounts receivable once the right to consideration becomes unconditional. Contract liabilities consist of payments from customers in advance of satisfying performance obligations. Contract liabilities

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended March 31, 2026

related to customer prepayments and accrued customer rebates totaled $1,310,908 and $3,312,226 as of March 31, 2026 and December 31, 2025, respectively.

The following table presents revenue disaggregated by geography during the three months ended March 31, 2026:


		Three months ended March 31, 2026

United States	$	27,879,273
Rest of Americas		2,151,231
Europe		1,978,767
Asia		1,040,390
Other		407,677

Total	$	33,457,338

Fair Value of Financial Instruments

The carrying amounts of the Company's cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values because of the short-term maturities of these instruments. The Company's long-term debt bears interest at variable rates that reset periodically with prevailing market rates; accordingly, the carrying amount of the Company's long-term debt approximates its fair value as of March 31, 2026 and December 31, 2025. The fair value of the Company's long-term debt is categorized within Level 2 of the fair value hierarchy. There were no transfers between levels of the fair value hierarchy during the three months ended March 31, 2026.

NOTE 2 – supplemental balance sheet information

Inventories, net of reserve of $820,426 and $989,667 as of March 31, 2026 and December 31, 2025, respectively, consisted of the following:


	March 31, 2026	December 31, 2025

Raw materials	$ 21,918,951	$ 22,916,340
Work in process	1,824,272	1,300,001
Finished goods	2,398,481	2,762,593

Total inventory	$ 26,141,704	$ 26,978,934

Accrued expenses and other current liabilities as of March 31, 2026 and December 31, 2025, respectively, consisted of the following:


	March 31, 2026	December 31, 2025

Payroll liabilities	$ 3,715,884	$ 3,138,243
Accrued rebates	233,754	2,035,917
Customer prepayments	1,077,154	1,276,309
Other	1,093,844	902,927

Total accrued expenses and other current liabilities	$ 6,120,636	$ 7,353,396

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended March 31, 2026

NOTE 3 - PROPERTY AND EQUIPMENT

The estimated useful lives, cost, and accumulated depreciation of property and equipment as of March 31, 2026 and December 31, 2025 are as follows:


	Useful Life	March 31, 2026	December 31, 2025

Leasehold improvement	15 - 40 Years	$ 10,169,372	$ 9,994,085
Cleanroom equipment	5 - 10 Years	3,339,320	3,292,866
Production equipment	7 - 10 Years	16,665,039	16,125,430
Molds and dyes	7 Years	862,727	862,727
Office equipment	5 - 7 Years	1,612,700	1,583,707
Furniture and fixtures	7 Years	846,260	829,114

		33,495,418	32,687,929

Less: accumulated depreciation		(11,358,331)	(10,355,807)

		22,137,087	22,332,122

Construction in progress		1,098,211	987,128

Total property and equipment, net		$ 23,235,298	$ 23,319,250

Depreciation expense was $1,002,525 for the three months ended March 31, 2026.

NOTE 4 - INTANGIBLE ASSETS

Identifiable intangible assets consist of the following as of March 31, 2026 and December 31, 2025:


	March 31, 2026			December 31, 2025
	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Amortizable intangible assets:
Customer relationships	$ 134,300,000	$ (60,021,640)	$ 74,278,360	$ 134,300,000	$ (57,497,473)	$ 76,802,527
Developed technology	4,400,000	(2,086,250)	2,313,750	4,400,000	(1,990,417)	2,409,583
Amortizable intangible assets	138,700,000	(62,107,890)	76,592,110	138,700,000	(59,487,890)	79,212,110
Non-amortizable intangible assets:
Trade name	14,000,000	—	14,000,000	14,000,000	—	14,000,000
Total intangible assets	$ 152,700,000	$ (62,107,890)	$ 90,592,110	$ 152,700,000	$ (59,487,890)	$ 93,212,110

The weighted average remaining useful life of the intangibles was approximately 8 years as of March 31, 2026 and December 31, 2025, respectively.

Amortization expense was $2,620,000 for the three months ended March 31, 2026 and is included in Selling, general, and administrative expenses.

The net carrying amount of identifiable intangible assets was $90,592,110 as of March 31, 2026. The detailed composition of intangible assets by cost and accumulated amortization as of December 31, 2025 is presented in the Company’s audited

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended March 31, 2026

consolidated financial statements; there were no material changes in the composition of intangible assets during the three months ended March 31, 2026 other than amortization recognized in the ordinary course.

Estimated future amortization expense for the five succeeding years and thereafter is as follows:


Year Ending December 31,

2026 (remaining nine months)	$ 7,860,000
2027	10,480,000
2028	10,480,000
2029	9,929,998
2030	9,380,000
Thereafter	28,462,112

	$ 76,592,110

NOTE 5 - GOODWILL

The goodwill balance was $165,234,007 and $165,234,007 as of March 31, 2026 and December 31, 2025, respectively.

NOTE 6 - LONG-TERM DEBT

The Company has a Credit Agreement with a syndicate of participating lenders, as amended, providing for a term loan and a revolving line of credit with availability of $20,000,000. Borrowings under the term loan bear interest at a variable rate of SOFR plus a leverage-based margin ranging from 4.5% to 6.00%, and the facility matures on June 21, 2027.

Long-term debt consists of the following at March 31, 2026 and December 31, 2025:


	March 31, 2026	December 31, 2025

Note payable in quarterly installments payments of $447,202 due in full June 21, 2027, interest at SOFR plus 4.5% - 6.00%.	$ 201,129,155	$ 206,129,155
Line of credit, interest at SOFR plus 4.5% - 6.00%.	—	—

	201,129,155	206,129,155
Less: debt issuance costs	(962,579)	(1,159,020)

	200,166,576	204,970,135
Less: current portion of long-term debt	—	—

	$ 200,166,576	$ 204,970,135

During the three months ended March 31, 2026, the Company made voluntary prepayments on its term loan in excess of the required scheduled principal payments. As a result, no principal payments are contractually due within the next twelve months as of March 31, 2026, and therefore no current portion of long‑term debt is presented on the consolidated balance sheet. The Company does not incur commitment fees, and no special withdrawal conditions exist beyond standard default provisions.

The loans contain a maximum leverage ratio as part of the debt covenant. The Company was in compliance with all covenants as of March 31, 2026. Substantially all the assets of the Company are pledged as collateral to the Credit Agreement. The Credit Agreement requires the Company to maintain a maximum consolidated total leverage ratio not to

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended March 31, 2026

exceed 8.00:1.00, tested on a quarterly basis. The weighted-average interest rate on the Company's outstanding borrowings was 9.00% as of March 31, 2026. The Company's obligations under the Credit Agreement are secured by a first-priority lien on, and security interest in, substantially all of the Company's assets, including accounts receivable, inventory, equipment, intellectual property, and the equity interests of its subsidiaries. There were no covenant violations as of March 31, 2026.

Other than the principal repayment, there were no significant changes in the Company’s long-term debt or other financing arrangements during the three months ended March 31, 2026.

Minimum future principal payments of debt are as follows:


Year Ending December 31,

2026 (remaining nine months)	$ —
2027	201,129,155
2028	—
2029	—
2030	—
Thereafter	—

	$ 201,129,155

NOTE 7 - MEMBERSHIP INTERESTS

Runway Buyer is wholly owned by Runway Parent, which is represented by a membership interest of $165,312,731 as of March 31, 2026.

NOTE 8 - INCOME TAXES

The Company's provision for income taxes for the interim period is determined using an estimated annual effective tax rate, adjusted for discrete items recognized in the period, in accordance with ASC 740-270. The Company's effective tax rate was 20.8% for the three months ended March 31, 2026. The effective tax rate differs from the U.S. federal statutory rate of 21% primarily as a result of state taxes and net CFC tested income, offset by foreign-derived deduction eligible income deduction, the Costa Rica tax holiday, and federal tax credits.

As of March 31, 2026, the Company had no federal and state net operating loss carryforwards. For uncertain tax positions, the Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold it is then measured as the largest amount of liability that is greater than 50% likely of being realized upon ultimate settlement. The Company’s policy is to record tax related interest and penalties within the tax provision. As of March 31, 2026, there are no interest and penalties that relate to uncertain tax positions. As of March 31, 2026, the Company had no unrecognized tax benefits, and accordingly a tabular reconciliation of the beginning and ending balances of unrecognized tax benefits has not been presented. The Company does not expect a significant change in unrecognized tax benefits within the next twelve months. The Company’s foreign operations benefit from a tax holiday, which is set to expire in 2030. This tax holiday may be extended when certain conditions are met or may be terminated early if certain conditions are not met. The tax benefit attributable to this tax holiday, before taking into consideration other U.S. tax provisions, was $80,790 for the three months ending March 31, 2026.

The Company is subject to federal and state income tax. The years that remain subject to examination are 2020 and later for federal and state purposes.

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended March 31, 2026

NOTE 9 - RELATED PARTY TRANSACTIONS

The Company leases its production facility, offices, and a warehouse from a member under an operating lease. The lease requires monthly payments of $58,726 escalating annually by 3%. The current non‑cancellable lease term extends through June 2029 and includes two additional renewal options of five years each. The renewal options are not included in the measurement of the related right‑of‑use asset and lease liability, as the Company is not reasonably certain to exercise the renewal options as of the balance sheet date. If the Company elects to exercise a renewal option, the lease will be remeasured at that time. The Company made lease payments of $176,177 to the member for the three months ended March 31, 2026. ROU asset and lease liability related to the member was $2,126,824 and $2,252,432 as of March 31, 2026 and $2,279,238 and $2,406,060 as of December 31, 2025, respectively.

In 2023 the Company entered into a new operating lease for an office space with Butler Block LLC., which is a related party entity. The lease requires a monthly payment of $21,332 escalating annually by 3%. The current non‑cancellable lease term extends through June 2029 and includes three additional renewal options of five years each. The renewal options are not included in the measurement of the related right‑of‑use asset and lease liability, as the Company is not reasonably certain to exercise the renewal options as of the balance sheet date. If the Company elects to exercise a renewal option, the lease will be remeasured at that time. The Company made lease payments of $63,997 to this member for the three months ended March 31, 2026. The ROU asset and lease liability related to this member was $804,342 and $837,773 as of March 31, 2026 and $863,840 and $896,989 as of December 31, 2025, respectively.

During the three months ended March 31, 2026 the Company made $97,420 of inventory related purchases with Western Filament, Inc, a related party entity.

NOTE 10 - LEASES


	March 31, 2026	December 31, 2025

Operating lease right-of-use assets	$ 3,806,737	$ 3,719,544
Operating lease right-of-use assets – related party	2,931,166	3,143,078
Operating lease liabilities	(4,207,898)	(4,118,129)
Operating lease liabilities – related party	(3,090,205)	(3,303,049)
Current lease liabilities	(584,726)	(538,485)
Current lease liabilities – related party	(888,755)	(874,126)
Long-term lease liabilities	(3,623,172)	(3,579,644)
Long-term lease liabilities – related party	(2,201,450)	(2,428,923)

The Company did not incur variable or short‑term lease costs during the periods presented. Accordingly, all lease costs recognized relate to fixed payments under operating leases. For the three months ended March 31, 2026, total operating lease costs were $459,505. The weighted-average remaining lease term was 5.23 years and the weighted-average discount rate was 3.8% as of March 31, 2026. As of December 31, 2025, the weighted-average remaining lease term was 5.31 years and the weighted-average discount rate was 3.7%.

Total cash paid for operating lease liabilities was $387,421 for the three months ended March 31, 2026.

NOTE 11 - CONCENTRATIONS

The Company had two customers with over 10% of total sales accounting for 39% of total sales for the three months ended March 31, 2026. As of March 31, 2026, two customers accounted for 44% of the total accounts receivable balance. There were no vendors with over 10% of total purchases for the three months ended March 31, 2026.

Runway Buyer, LLC

CONSOLIDATED STATEMENT OF CASH FLOWS

For the three months ended March 31, 2026

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Purchase Commitments

There have been no material changes to the Company’s purchase commitments since December 31, 2025.

Legal Proceedings

The Company is subject to various claims, disputes, and legal proceedings that arise in the ordinary course of business. Management assesses the likelihood of any adverse outcomes and records a loss contingency when a loss is both probable and reasonably estimable. Management does not believe that the ultimate resolution of any currently pending matters will have a material adverse effect on the Company's financial position, results of operations, or cash flows. As of March 31, 2026, no material amounts have been accrued for loss contingencies.

NOTE 13 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through October 2, 2026, which is the date these unaudited condensed consolidated financial statements were issued.

EXHIBIT 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

As previously disclosed in the Current Report on Form 8-K filed on June 9, 2026 (the “Previous Form 8-K”), by Novanta Inc., a Canadian corporation (the “Company”) with the Securities and Exchange Commission (“SEC”), on June 8, 2026, the Company, Novanta Medical Technologies Corp., a Delaware corporation and an indirect subsidiary of the Company (“Buyer”), Novanta Corporation, a Michigan corporation (“Intermediate Parent”, and together with the Company and the Buyer, the “Buyer Parties”), Runway Midco, LLC, a Delaware limited liability company (“Seller”), and Runway Buyer, LLC, a Delaware limited liability company and direct wholly owned subsidiary of Seller (“Runway Buyer”), entered into an Equity Purchase Agreement (the “Purchase Agreement”), pursuant to which Buyer agreed to acquire from Seller all of the issued and outstanding limited liability company interests (the “Purchased Interests”) of Runway Buyer (the “Transaction”). On July 23, 2026, the closing of the Transaction (the “Closing”) occurred.

The aggregate purchase price of approximately $1,450.6 million was funded through cash on hand and $616.0 million of borrowings under the Company's revolving credit facility and delayed draw term loan facility under its Fourth Amended and Restated Credit Agreement (the “Credit Agreement”) (the “Debt Financing”). In addition, a milestone payment amount of $250.0 million remains payable by the Buyer Parties to Seller on or before January 8, 2027. Accordingly, the milestone payment has been included in consideration transferred and recorded at its acquisition-date fair value in the unaudited pro forma condensed combined balance sheet.

On June 8, 2026, the Company entered into a securities purchase agreement with institutional and other accredited investors for a private placement of the Company's common shares, which resulted in gross proceeds of approximately $300 million, before placement agent fees and offering expenses of $12.4 million. The placement closed on June 11, 2026, and the Company recorded net proceeds of approximately $287.6 million (the “Equity Financing”). The Company used the Equity Financing to fund the acquisition.

The unaudited pro forma condensed combined balance sheet as of April 3, 2026 is presented as if the Transaction had occurred on April 3, 2026 and is based on the unaudited consolidated balance sheet of the Company as of April 3, 2026 (as filed with the SEC in its Quarterly Report on Form 10-Q for the three months ended April 3, 2026) and the unaudited consolidated balance sheet of Runway Buyer as of March 31, 2026, which is included herein as Exhibit 99.2 to this Current Report on Form 8-K/A.

The unaudited pro forma condensed combined statement of operations for the three months ended April 3, 2026 is presented as if the Transaction had occurred on January 1, 2025 and is based upon the unaudited consolidated statement of operations of the Company for the three months ended April 3, 2026 (as filed with the SEC in its Quarterly Report on Form 10-Q for the three months ended April 3, 2026) and the unaudited consolidated statement of operations of Runway Buyer for the three months ended March 31, 2026, which is included herein as Exhibit 99.2 to this Current Report on Form 8-K/A.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2025 is presented as if the Transaction had occurred on January 1, 2025 and is based upon the audited consolidated statement of operations of the Company for the year ended December 31, 2025 (as filed with the SEC in its Annual Report on Form 10-K for the year ended December 31, 2025) and the audited consolidated statement of operations of Runway Buyer for the year ended December 31, 2025 (attached as Exhibit 99.1 to this Current Report on Form 8-K/A).

The unaudited pro forma condensed combined financial information should be read in conjunction with:

●

The accompanying notes to the unaudited pro forma condensed combined financial information;

●

The audited consolidated financial statements and related notes of the Company as of and for the year ended December 31, 2025, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025;

●

The unaudited consolidated financial statements and related notes of the Company as of and for the three months ended April 3, 2026, included in the Company's Quarterly Report on Form 10-Q for the three months ended April 3, 2026;

●

The audited consolidated financial statements and related notes of Runway Buyer as of and for the year ended December 31, 2025, included as Exhibit 99.1 to this Current Report on Form 8-K/A; and

●

The unaudited condensed consolidated financial statements and related notes of Runway Buyer as of and for the three months ended March 31, 2026, included as Exhibit 99.2 to this Current Report on Form 8-K/A.

The Transaction is being accounted for as a business combination in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), with the Company as the accounting acquirer. Under the acquisition method of accounting, the purchase consideration is allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of completion of the respective acquisition. The process of valuing the net assets of Runway Buyer immediately prior to the Transaction, as well as evaluating accounting policies for conformity, is preliminary. Any differences between the estimated fair value of the consideration transferred and the estimated fair value of the assets acquired and liabilities assumed related to the Transaction will be recorded as goodwill. Accordingly, the purchase consideration allocation and related adjustments reflected in this unaudited pro forma

condensed combined financial information are preliminary and subject to revision based on a final determination of fair value. Refer to Note 1 - Basis of Presentation for more information.

All financial data included in the unaudited condensed combined financial information is presented in thousands of U.S. dollars and has been prepared on the basis of U.S. GAAP and the Company's accounting policies.

The unaudited pro forma condensed combined financial information presented is for informational purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the Transaction, Equity Financing and Debt Financing had been completed on the dates set forth above, nor is it indicative of the future results or financial position of the combined company.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

As of April 3, 2026

(dollars and shares in thousands, except per share data)


	Novanta Inc.		Runway Buyer Reclassified (as of March 31, 2026) (Note 2)		Transaction Accounting Adjustments - Acquisition			Note 4	Transaction Accounting Adjustments - Equity Issuance		Note 4	Transaction Accounting Adjustments - Debt Financing		Note 4	Pro Forma Combined
ASSETS
Current assets
Cash and cash equivalents	$	388,799	$	6,992	$	(1,232,827	)	(a), (k)	$	287,605	(l)	$	613,720	(h), (i)	$	64,289
Accounts receivable, net of allowance		173,934		27,131		—				—			—			201,065
Inventories		193,143		26,142		2,400		(b)		—			—			221,685
Prepaid income taxes and income taxes receivable		8,751		—		—				—			—			8,751
Prepaid expenses and other current assets		22,176		1,194		—				—			—			23,370
Total current assets		786,803		61,459		(1,230,427	)			287,605			613,720			519,160
Property, plant and equipment, net		116,961		23,846		4,100		(c)		—			—			144,907
Operating lease assets		40,361		6,738		560		(e)		—			—			47,659
Deferred tax assets		29,665		—		—				—			—			29,665
Other assets		11,587		—		—				—			—			11,587
Intangible assets, net		170,299		90,592		635,408		(d)		—			—			896,299
Goodwill		643,379		165,234		653,896		(m)		—			—			1,462,509
Total assets	$	1,799,055	$	347,869	$	63,537			$	287,605		$	613,720		$	3,111,786
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt	$	40,416	$	—	$	—			$	—		$	—		$	40,416
Accounts payable		96,203		2,389		—				—			—			98,592
Income taxes payable		7,887		853		—				—			—			8,740
Current portion of operating lease liabilities		9,691		1,474		—				—			—			11,165
Accrued expenses and other current liabilities		66,595		6,120		244,100		(f)		—			—			316,815
Total current liabilities		220,792		10,836		244,100				—			—			475,728
Long-term debt		201,005		200,167		(200,167	)	(g)		—			613,720	(h), (i)		814,725
Operating lease liabilities		37,244		5,824		—				—			—			43,068
Deferred tax liabilities		17,155		11,680		165,291		(m)		—			—			194,126
Income taxes payable		4,520		—		—				—			—			4,520
Other liabilities		7,311		—		—				—			—			7,311
Total liabilities		488,027		228,507		209,224				—			613,720			1,539,478
Total stockholders' equity		1,311,028		119,362		(145,687	)	(j), (k)		287,605	(l)		—			1,572,308
Total liabilities and stockholders’ equity	$	1,799,055	$	347,869	$	63,537			$	287,605		$	613,720		$	3,111,786

See accompanying notes to the unaudited pro forma condensed combined financial information

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Three Months Ended April 3, 2026

(dollars and shares in thousands, except per share data)


	Novanta Inc.			Runway Buyer Reclassified Three Months Ended (March 31, 2026) (Note 2)			Transaction Accounting Adjustments - Acquisition			Note 5	Transaction Accounting Adjustments - Equity Issuance		Note 5	Transaction Accounting Adjustments - Debt Financing			Note 5	Pro Forma Combined
Revenue	$	257,707		$	33,457		$	—			$	—		$	—			$	291,164
Cost of revenue		144,129			17,029			5,156		(b), (c)		—			—				166,314
Gross profit		113,578			16,428			(5,156	)			—			—				124,850
Operating expenses:
Research and development and engineering		23,251			1,499			38		(b)		—			—				24,788
Selling, general and administrative		54,409			4,802			27		(b), (d)		—			—				59,238
Amortization of purchased intangible assets		5,774			2,552			10,688		(c)		—			—				19,014
Restructuring, acquisition and related costs		2,605			91			—				—			—				2,696
Total operating expenses		86,039			8,944			10,753				—			—				105,736
Operating income		27,539			7,484			(15,909	)			—			—				19,114
Interest income (expense), net		(1,843	)		(4,465	)		4,465		(f)		—			(7,290	)	(g), (h)		(9,133	)
Foreign exchange transaction gains (losses), net		731			—			—				—			—				731
Other income (expense), net		(73	)		14			—				—			—				(59	)
Income before income taxes		26,354			3,033			(11,444	)			—			(7,290	)			10,653
Income tax provision		5,255			630			(2,947	)	(i)		—			(1,877	)	(i)		1,061
Net income	$	21,099		$	2,403		$	(8,497	)		$	—		$	(5,413	)		$	9,592

Earnings per common share:
Basic	$	0.52																$	0.23
Diluted	$	0.51																$	0.22

Weighted average common shares outstanding—basic		40,425										2,143	(j)						42,568
Weighted average common shares outstanding—diluted		41,158										2,143	(j)						43,301

See accompanying notes to the unaudited pro forma condensed combined financial information

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

For the Year Ended December 31, 2025

(dollars and shares in thousands, except per share data)


	Novanta Inc.			Runway Buyer Reclassified (Note 2)			Transaction Accounting Adjustments - Acquisition			Note 5	Transaction Accounting Adjustments - Equity Issuance		Note 5	Transaction Accounting Adjustments - Debt Financing			Note 5	Pro Forma Combined
Revenue	$	980,600		$	136,120		$	—			$	—		$	—			$	1,116,720
Cost of revenue		545,316			67,986			18,519		(a), (b), (c)		—			—				631,821
Gross profit		435,284			68,134			(18,519	)			—			—				484,899
Operating expenses:
Research and development and engineering		95,484			4,683			153		(b)		—			—				100,320
Selling, general and administrative		195,659			17,480			108		(b), (d)		—			—				213,247
Amortization of purchased intangible assets		27,477			10,113			29,921		(c)		—			—				67,511
Restructuring, acquisition and related costs		22,652			2,023			32,225		(e), (k)		—			—				56,900
Total operating expenses		341,272			34,299			62,407				—			—				437,978
Operating income		94,012			33,835			(80,926	)			—			—				46,921
Interest income (expense), net		(21,472	)		(21,108	)		21,108		(f)		—			(29,162	)	(g), (h)		(50,634	)
Foreign exchange transaction gains (losses), net		(2,190	)		—			—				—			—				(2,190	)
Other income (expense), net		(708	)		197			—				—			—				(511	)
Income before income taxes		69,642			12,924			(59,818	)			—			(29,162	)			(6,414	)
Income tax provision		15,813			1,462			(8,795	)	(i)		—			(7,509	)	(i)		971
Net income	$	53,829		$	11,462		$	(51,023	)		$	—		$	(21,653	)		$	(7,385	)

Earnings per common share:
Basic	$	1.47																$	(0.19	)
Diluted	$	1.47																$	(0.19	)

Weighted average common shares outstanding—basic		36,589										2,143	(j)						38,732
Weighted average common shares outstanding—diluted		36,702										2,143	(j)						38,732

See accompanying notes to the unaudited pro forma condensed combined financial information

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Note 1 - Basis of Presentation

The unaudited pro forma condensed combined financial information and related notes are prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”.

The Company and Runway Buyer historical financial statements were prepared in accordance with U.S. GAAP and presented in U.S. dollars. As discussed in Note 2, certain reclassifications were made to align Runway Buyer financial statement presentation to that of the Company. The Company is currently in the process of evaluating Runway Buyer’s accounting policies and as a result of that review, additional differences could be identified between the accounting policies of the two companies.

The Company’s fiscal periods ended April 3, 2026 and December 31, 2025, while Runway Buyer’s corresponding fiscal periods ended March 31, 2026 and December 31, 2025, respectively. As the interim period-end dates differ by fewer than 93 days, no adjustment has been made to conform the reporting periods, as permitted by Rule 11-02(c)(3) of Regulation S-X.

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting in accordance with ASC 805, with the Company as the accounting acquirer, using the fair value concepts defined in ASC Topic 820, Fair Value Measurement, and based on the historical financial statements of the Company and Runway Buyer. Under ASC 805, all assets acquired and liabilities assumed in a business combination are recognized and measured at their assumed acquisition date fair value, while transaction costs associated with the business combination are expensed as incurred. The excess of purchase consideration over the estimated fair value of assets acquired and liabilities assumed, if any, is allocated to goodwill.

The allocation of the purchase consideration depends upon certain estimates and assumptions, all of which are preliminary. The allocation of the purchase consideration has been made for the purpose of developing the unaudited pro forma condensed combined financial information. The allocation of the purchase consideration set forth herein is preliminary and will be revised as additional information becomes available during the measurement period, which could be up to twelve months from the Closing. Any such revisions or changes may be material.

The unaudited pro forma condensed combined financial information reflects only Transaction Accounting Adjustments, as defined in Rule 11-02(a)(6) of Regulation S-X; no Management's Adjustments have been presented.

Note 2 – Reclassification Adjustments

During the preparation of this unaudited pro forma condensed combined financial information, Company management performed a preliminary analysis of Runway Buyer's financial information to identify differences in financial statement presentation as compared to the presentation of the Company. With the information currently available, the Company has determined that no significant adjustments are necessary to conform Runway Buyer's financial statements to those used by the Company. However, certain reclassification adjustments have been made to conform Runway Buyer’s historical financial statement presentation to the Company financial statement presentation. Following the Closing, the combined company will finalize the review of accounting policies and reclassifications, which could be materially different from the amounts set forth in the unaudited pro forma condensed combined financial information presented herein. The Company is currently in the process of evaluating Runway Buyer’s accounting policies. That evaluation may identify additional differences between the accounting policies of the Company and Runway Buyer. Based on the information currently available, the Company has determined on a preliminary basis that no significant adjustments outside of the adjustments included in Note 2 are necessary to conform Runway Buyer’s financial statements to the accounting policies used by the Company.

(a) Reclassifications to the Unaudited Pro Forma Condensed Combined Balance Sheet as of April 3, 2026 are as follows (in thousands):


	Runway Buyer Historical Balance Sheet Line Items	Runway Buyer as of March 31, 2026		Reclassification			Note	Runway Buyer after Reclassification as of March 31, 2026
ASSETS
Current assets
Cash and cash equivalents	Cash	$	6,992	$	—			$	6,992
Accounts receivable, net of allowance	Accounts Receivable		27,131		—				27,131
Inventories	Inventory		26,142		—				26,142
Prepaid income taxes and income taxes receivable			—		—				—
	Prepaid Inventory		363		(363	)	(a)		—
Prepaid expenses and other current assets	Prepaid expenses and other current assets		831		363		(a)		1,194
Total current assets			61,459		—				61,459
Property, plant and equipment, net	Property, plant, & equipment, net		23,235		611		(b)		23,846
	Deposits on Equipment		611		(611	)	(b)		—
	Right of Use Asset-Related Party		2,931		(2,931	)	(c)		—
Operating lease assets	Right of Use Asset		3,807		2,931		(c)		6,738
Deferred tax assets			—		—				—
Other assets			—		—				—
Intangible assets, net	Intangibles, net		90,592		—				90,592
Goodwill	Goodwill		165,234		—				165,234
Total assets		$	347,869	$	—			$	347,869
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Current portion of long-term debt		$	—	$	—			$	—
Accounts payable	Accounts Payable		2,389		—				2,389
Income taxes payable	Income tax payable		853		—				853
	Current portion of lease liability-related party		889		(889	)	(d)		—
Current portion of operating lease liabilities	Current portion of lease liability		585		889		(d)		1,474
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities		6,120		—				6,120

Total current liabilities			10,836		—				10,836
Long-term debt	Long-term debt, net		200,167		—				200,167
	Long-term lease liability-related party		2,201		(2,201	)	(e)		—
Operating lease liabilities	Long-term lease liability		3,623		2,201		(e)		5,824
Deferred tax liabilities	Deferred income tax, non-current		11,680		—				11,680
Income taxes payable			—		—				—
Other liabilities			—		—				—
Total liabilities			228,507		—				228,507
Total stockholders' equity			119,362		—				119,362
Total liabilities and stockholders’ equity		$	347,869	$	—			$	347,869

(a)

Represents the reclassification of $0.4 million of prepaid inventory from prepaid inventory to prepaid expenses and other current assets.

(b)

Represents the reclassification of $0.6 million of deposits on equipment from deposits on equipment to property, plant and equipment, net.

(c)

Represents the reclassification of $2.9 million of right of use asset - related party to operating lease assets.

(d)

Represents the reclassification of $0.9 million of current portion of lease liability - related party to current portion of operating lease liabilities.

(e)

Represents the reclassification of $2.2 million of Long-term portion of lease liability - related party to long-term portion of operating lease liabilities.

(b) Reclassifications to the Unaudited Pro Forma Condensed Combined Statement of Operations for the three months ended April 3, 2026 are as follows (in thousands):


Novanta Historical Condensed Consolidated Statement of Operations Line Items	Runway Buyer Historical Condensed Consolidated Statement of Operations Line Items	Runway Buyer three months Ended March 31, 2026			Reclassification			Note	Runway Buyer after Reclassification for the three months ended April 3, 2026
Revenue	Revenues	$	33,457		$	—			$	33,457
Cost of revenue	Cost of goods sold		13,430			3,599		(a), (c), (d), (e), (f), (g)		17,029
	Lease Expense		220			(220	)	(c)		—
	Lease Expense-related party		239			(239	)	(d)		—
	Depreciation		1,004			(1,004	)	(e)		—
Gross profit			18,564			(2,136	)			16,428
Operating expenses:
Research and development and engineering			2,047			(548	)	(c), (d), (e),(f)		1,499
Selling, general and administrative	Selling, general and administrative expenses		9,033			(4,231	)	(a), (b), (c), (d), (e), (g)		4,802
Amortization of purchased intangible assets			—			2,552		(b)		2,552
Restructuring, acquisition and related costs			—			91		(h)		91
Total operating expenses			11,080			(2,136	)			8,944
Operating income	Income from operations		7,484			—				7,484
Interest income (expense), net	Interest expense		(4,465	)		—				(4,465	)
Foreign exchange transaction gains (losses), net			—			—				—
Other income (expense), net	Other income (expense), net		14			—				14
Income before income taxes			3,033			—				3,033
Income tax provision	Income tax (expense) benefit		(630	)		—				(630	)
Net income		$	2,403		$	—			$	2,403

(c) Reclassifications to the Unaudited Pro Forma Condensed Combined Statement of Operations for the year ended December 31, 2025 are as follows (in thousands):


Novanta Historical Condensed Consolidated Statement of Operations Line Items	Runway Buyer Historical Condensed Consolidated Statement of Operations Line Items	Runway Buyer Year Ended December 31, 2025			Reclassification			Note	Runway Buyer after Reclassification for the year ended December 31, 2025
Revenue	Revenues	$	136,120		$	—			$	136,120
Cost of revenue	Cost of goods sold		54,054			13,932		(a), (c), (d), (e), (f), (g)		67,986
	Lease Expense		1,672			(1,672	)	(c)		—
	Lease Expense-related party		957			(957	)	(d)		—
	Depreciation		3,607			(3,607	)	(e)		—
Gross profit			75,830			(7,696	)			68,134
Operating expenses:
Research and development and engineering	Research and Development		6,546			(1,863	)	(c), (d), (e),(f)		4,683
Selling, general and administrative	Selling, general and administrative expenses		35,449			(17,969	)	(a), (b), (c), (d), (e), (g)		17,480
Amortization of purchased intangible assets			—			10,113		(b)		10,113
Restructuring, acquisition and related costs			—			2,023		(c),(h)		2,023
Total operating expenses			41,995			(7,696	)			34,299
Operating income	Income from operations		33,835			—				33,835
Interest income (expense), net	Interest expense		(21,108	)		—				(21,108	)
Foreign exchange transaction gains (losses), net			—			—				—
Other income (expense), net	Other income (expense), net		197			—				197
Income before income taxes			12,924			—				12,924
Income tax provision	Income tax (expense) benefit		(1,462	)		—				(1,462	)
Net income		$	11,462		$	—			$	11,462

(a)

Represents the reclassification of $0.4 million and $0.1 million of amortization expense of developed technology from selling, general and administrative to cost of revenue for the year ended December 31, 2025 and the three months ended March 31, 2026, respectively.

(b)

Represents the reclassification of $10.1 million and $2.6 million of amortization of customer relationships and tradename intangibles assets from selling, general and administrative to amortization of purchased intangible assets for the year ended December 31, 2025 and the three months ended March 31, 2026, respectively.

(c)

Represents the reclassification of $1.6 million and $0.2 million of lease expense to cost of revenue of $0.6 million and $0.1 million, Research and development and engineering of $0.0 million and $0.0 million, Selling, general and administrative of $0.2 million and $0.1 million and restructuring, acquisition and related costs of $0.8 million and none for the year ended December 31, 2025 and the three months ended March 31, 2026, respectively.

(d)

Represents the reclassification of $1.0 million and $0.2 million of lease expense-related party to cost of revenue of $0.6 million and $0.1 million, research and development and engineering of $0.1 million and $0.0 million, selling, general and administrative of $0.3 million and $0.1 million for the year ended December 31, 2025 and the three months ended March 31, 2026, respectively.

(e)

Represents the reclassification of $3.6 million and $1.0 million of depreciation to cost of revenue of $2.4 million and $0.7 million, research and development and engineering of $0.2 million and $0.1 million, selling, general and administrative of $1.0 million and $0.2 million for the year ended December 31, 2025 and the three months ended March 31, 2026, respectively.

(f)

Represents the reclassification of $2.2 million and $0.6 million of research and development and engineering to Cost of revenue to conform with the Company classification of expenses for the year ended December 31, 2025 and the three months ended March 31, 2026, respectively.

(g)

Represents the reclassification of $7.8 million and $1.9 million of selling, general and administrative to cost of revenue to conform with the Company classification of expenses for the year ended December 31, 2025 and the three months ended March 31, 2026, respectively.

(h)

Represents the reclassification of $1.2 million and $0.1 million of selling, general and administrative to restructuring, acquisition, and related costs to conform with the Company classification of expenses. For the year ended December 31, 2025 and the three months ended March 31, 2026, respectively.

Note 3 – Preliminary Purchase Consideration Allocation

To consummate the Transaction, the Company paid an aggregate purchase price of $1,450.6 million. The Company paid cash of $1,206.5 million and recorded a milestone payment of $244.1 million. The milestone payment amount of $250.0 million remains payable by the Buyer Parties to Seller on or before January 8, 2027. Accordingly, the milestone payment has been included in consideration transferred and recorded at its acquisition-date fair value in the unaudited pro forma condensed combined balance sheet.

The assumed accounting for the Transaction, including the preliminary purchase consideration, is based on provisional amounts, and the associated purchase accounting is not final. The preliminary allocation of the purchase price to the acquired assets and assumed liabilities was based upon the preliminary estimate of fair values. The fair values of identifiable intangible assets were based on valuations using an income approach, specifically the multi-period excess earnings method for customer relationships and the relief-from-royalty method for developed technologies and trade name. The process for estimating the fair values of identifiable intangible assets requires the use of significant estimates and assumptions, including revenue growth rates, customer attrition rates, royalty rates, discount rates, technology obsolescence curves, and EBITDA margins. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information. The unaudited pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable under the circumstances. The purchase price allocation set forth herein is preliminary and will be revised as additional information becomes available during the measurement period, which could be up to twelve months from the Closing. Any such revisions or changes may be material.

The following table summarizes the preliminary purchase consideration allocation, as if the Transaction had been completed on April 3, 2026:


(dollars in thousands)	Purchase Price Allocation
Cash and cash equivalents	$	6,992
Accounts receivable, net of allowance		27,131
Inventories		28,542
Prepaid expenses and other current assets		1,194
Property, plant and equipment, net		27,946
Goodwill		819,130
Operating lease assets		7,298
Intangible assets, net		726,000
Total assets acquired		1,644,233
Accounts payable		2,389
Income taxes payable		853
Operating lease liabilities		7,298
Accrued expenses and other current liabilities		6,120
Deferred tax liabilities		176,971
Total liabilities assumed		193,631
Total assets acquired, net liabilities assumed		1,450,602
Less: cash acquired		6,992
Purchase price, net of cash acquired	$	1,443,610

The unaudited pro forma condensed combined balance sheet has been adjusted to record Runway Buyer's property, plant and equipment at a preliminary fair value of approximately $27.9 million, an increase of $4.1 million from the carrying value. The unaudited pro forma condensed combined statements of operations have been adjusted to recognize additional depreciation expense related to the increased basis. The additional depreciation expense is computed with the assumption that the assets will be depreciated over a useful life of 7.8 years on a straight-line basis.

ii)

Preliminary identifiable intangible assets in the unaudited pro forma condensed combined financial information consist of the following:


(dollars in thousands)	Preliminary Fair Value		Estimated Useful Life (in years)
Customer relationships	$	540,000	16
Trade name		16,000	10
Developed technology		170,000	10
Intangible assets acquired	$	726,000

A 10% change in the valuation of intangible assets would cause a corresponding increase or decrease in the amortization expense of approximately $5.6 million annually. Pro Forma amortization is preliminary. Customer relationships and developed technology assets are amortized over their weighted average useful lives based upon the pattern in which anticipated economic benefits from such assets are expected to be realized. Trade names are amortized over their weighted average useful life on a straight-line basis. The amount of amortization following the Runway Buyer Transaction may differ significantly between periods based upon the final value assigned and amortization methodology used for each identifiable intangible asset.

iii)

Deferred tax liabilities were derived based on incremental differences in the book and tax basis created from the preliminary purchase allocation.

Note 4 – Adjustments to the Unaudited Pro Forma Condensed Combined Balance Sheet

Adjustments included in the Transaction Accounting Adjustments – Acquisition, Equity Issuance, and Debt Financing columns in the accompanying unaudited pro forma condensed combined balance sheet as of April 3, 2026 are as follows:

(a) Reflects adjustment to cash and cash equivalents of $1,206.5 million to record cash consideration paid for the Transaction.

(b) Reflects adjustment of $2.4 million to record the acquired inventories to the preliminary estimated fair value as of the Closing.

(c) Reflects an adjustment of $4.1 million to record property, plant and equipment to the preliminary estimated fair value as of the Closing.

(d) Reflects an adjustment of $635.4 million to record the acquired intangible assets to the preliminary estimated fair value as of the Closing. Refer to Note 3 above for additional information on the acquired intangible assets expected to be recognized.

(e) Reflects an adjustment of $0.6 million to increase the value of the operating lease right of use assets to be equal and offsetting to the estimated present value of remaining lease payments.

(f) Reflects an adjustment of $244.1 million to accrued expenses and other liabilities to record a liability for the milestone payment.

(g) Reflects an adjustment of $200.2 million to long-term debt eliminating Runway Buyer historical debt.

(h) Reflects an adjustment of $616.0 million to long-term debt to record borrowings under the Credit Agreement entered into in connection with the Transaction.

(i) Reflects an adjustment of $2.3 million to long-term debt to record capitalized debt issuance costs incurred in connection with Debt Financing.

(j) Reflects the elimination of Runway Buyer historical stockholders' equity.

(k) Reflects an adjustment of $26.3 million for the Company's estimated transaction costs incurred after April 3, 2026.

(l) Reflects an adjustment of $287.6 million, net of issuance costs to record the Company's issuance of 2.1 million common shares related to the Equity Financing of $300.0 million.

(m) Reflects an adjustment of $653.9 million, which reflects the deferred tax liability related to non-deductible inventory, property, plant and equipment, and intangibles fair value step-up of $165.3 million and recognition of goodwill of $819.1 million per purchase price allocation (Note 3).

Note 5 – Adjustments to the Unaudited Pro Forma Condensed Combined Statement of Operations

(a) Reflects an adjustment of $2.4 million to amortize the fair value step-up of inventories for the year ended December 31, 2025. These costs are non-recurring in nature and not anticipated to affect the condensed combined statement of income beyond twelve months after the Closing.

(b) Reflects adjustments for the incremental depreciation expense resulting from the fair value adjustment to property, plant and equipment of $0.1 million and $0.5 million for the three months ended April 3, 2026 and the year ended December 31, 2025, respectively.

(c) Reflects adjustments for incremental amortization expense resulting from the fair value adjustment to intangible assets of $15.8 million and $45.7 million for the three months ended April 3, 2026 and year ended December 31, 2025, respectively.

(d) Reflects an adjustment for lease expense related to the remeasurement of the right-of-use asset of $0.0 million and $0.1 million for the three months ended April 3, 2026 and the year ended December 31, 2025, respectively.

(e) Reflects an adjustment of $26.3 million for transaction expenses incurred by the Company subsequent to April 3, 2026. These costs will not affect the Company's condensed combined statement of income beyond twelve months after the Closing.

(f) Reflects the elimination of Runway Buyer historical interest expense related to indebtedness repaid at close of $4.5 million and $21.1 million for the three months ended April 3, 2026 and the year ended December 31, 2025, respectively.

(g) Reflects adjustment for interest expense of $7.2 million and $28.7 million for the three months ended April 3, 2026 and the year ended December 31, 2025, respectively, for principal amounts borrowed under the Debt Financing. The adjustment to record interest under the Debt Financing reflects an incremental weighted average annual principal balance outstanding of $616.0 million at a weighted average effective interest rate of 4.66%. A 0.125% change to the Financings with variable interest rates would result in a $0.8 million change in income before income taxes annually.

(h) Reflects adjustment for amortization of debt issuance costs of $0.1 million and $0.5 million for the three months ended April 3, 2026 and the year ended December 31, 2025, respectively, for costs incurred in connection with Debt Financing.

(i) Reflects the estimated income tax impact of the pro forma transaction accounting adjustments, including the tax effect of $6.5 million of deductible transaction expenses, using an applicable blended statutory income tax rate of 25.75% for the three months ended April 3, 2026 and the year ended December 31, 2025. The actual tax impact may differ based on the final determination of the deductibility of transaction-related costs and other relevant tax considerations.

(j) Reflects 2.1 million shares related to the Equity Financing.

(k) Reflects the accretion of $5.9 million discount on the milestone payment.

Note 6 – Pro Forma Earnings per Share

The following table summarizes the unaudited pro forma net earnings per common share for the three months ended April 3, 2026 and the year ended December 31, 2025, as if the Transaction had occurred on January 1, 2025:


($ in thousands, except for per share data)	For the three months ended April 3, 2026		For the year ended December 31, 2025
Numerator:
Pro forma net income (loss)	$	9,592	$	(7,385	)
Denominators:
Historical Company weighted average common shares outstanding - basic		40,425		36,589
Additional Shares issued in connection with the Transaction		2,143		2,143
Pro forma weighted average common shares outstanding - basic		42,568		38,732
Dilutive common share equivalents		733		—
Pro forma weighted average common shares outstanding - diluted		43,301		38,732
Antidilutive potential common shares excluded from above		304		239
Earnings per Common Share
Pro forma earnings (loss) per share, basic	$	0.23	$	(0.19	)
Pro forma earnings (loss) per share, diluted	$	0.22	$	(0.19	)

Source: View Original Filing on SEC EDGAR

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