BUDA JUICE, INC. Revenue Disclosure
| 3. | REVENUE RECOGNITION |
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
Revenue Streams: The Company generates revenue solely from product sales, including branded and private-label fresh juice products. Sales are made to wholesale distributors, retailers, and through select third-party agents.
Performance Obligations and Timing of Revenue Recognition: Revenue is recognized as follows: Revenue is recognized at a point in time when control of the product transfers to the customer, which typically occurs upon delivery and customer acceptance, in accordance with FOB Destination terms. The Company does not retain any material rights or obligations after delivery. There are no significant warranties or return provisions.
Sales transactions are generally governed by electronic purchase orders through an integrated EDI system, with performance obligations limited to product delivery. In certain customer arrangements the Company provides promotional allowances or cost-sharing for marketing activities. These are not considered separate performance obligations and are accounted for as reductions to revenue or recorded within marketing expense, as appropriate.
Contract Balances: Accounts Receivable: Represents amounts billed and due from customers under customary payment terms. The Company currently offers payment terms of 10 days with a 2% early payment discount.
Deferred Revenue: The Company does not typically receive payment in advance of satisfying its performance obligations. There were no deferred revenue balances as of December 31, 2025 or December 31, 2024.
Significant Judgments: The Company’s contracts generally contain a single performance obligation, which is delivering the Company’s product to the customer. As such, no significant judgments were required in applying ASC 606 related to identifying performance obligations, determining transaction price, or allocating transaction price.
Revenue: The following table presents revenue by major source for the years ended December 31, 2025 and 2024:
| Revenue Source | December 31, 2025 | December 31, 2024 | ||||||
| (in thousands) | ||||||||
| Product sales | $ | 12,609 | $ | 11,274 | ||||
Note: Revenue is presented net of discounts.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.