UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~For~~ACT ~~the~~OF ~~fiscal year ended December 31, 2024~~1934

For the fiscal year ended December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 001-39946

~~AGRIFY~~RYTHM ~~CORPORATION~~INC.

(Exact name of registrant as specified in its charter)

Nevada		30-0943453
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~2468~~2220 ~~Industrial~~Hicks ~~Row~~Road ~~Dr.~~Suite 210

~~Troy~~Rolling Meadows, ~~Michigan~~IL ~~48084~~60008

(Address of principal executive offices, including zip code)

(855) 420-0020

(Registrant’s telephone number, including area code)

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 Stock, par value $0.001 per share		~~AGFY~~RYM		~~NASDAQ~~Nasdaq Capital Market

Securities ~~Registered~~registered ~~Pursuant~~pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark ifwhether the registrant ~~is not~~ ~~required~~(1) tohas ~~file~~filed all reports ~~pursuant~~required to be filed by Section 13 or ~~Section~~ 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

~~Yes~~Indicate ☐by Nocheck mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

~~YES~~The ☐aggregate NOmarket ☒value of the common equity held by non-affiliates of the registrant on June 30, 2025, the last business day of the registrant’s most recently completed second quarter, was $26,690,756 based on the closing price of $21.17 per share of common stock on the Nasdaq Capital Market on that date. For this purpose, shares of the registrant’s common stock held by each officer and director and each person known to the registrant to own 10% or more of the outstanding voting power of the registrant have been excluded in that such persons may be deemed affiliates. This determination of affiliate status is not a determination for other purposes.

~~The~~There ~~aggregate~~were ~~market~~a ~~value~~total of ~~the voting and non-voting common equity held by non-affiliates of the registrant~~2, ~~computed by reference to the price at which the common equity was last sold~~149,148 shares orof the ~~average~~registrant’s ~~bid and asked price of such~~ common ~~equity~~stock, aspar ofvalue ~~June 30, 2024, was approximately~~ $60.3001 ~~million.~~per ~~Shares~~share, ~~of the registrant’s common stock held by each officer and director and each person known to the registrant to own 10% or more of the~~ outstanding ~~voting~~as ~~power~~ of ~~the~~March ~~registrant~~3, ~~have been excluded in that such persons may be deemed affiliates~~2026. ~~This determination of affiliate status is not a determination for other purposes.~~

There were a total of 1,952,032 shares of the registrant’s common stock, par value $0.001 per share, outstanding as of March 17, 2025.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Definitive Proxy Statement to be filed with the SEC pursuant to Regulation 14A in connection with the registrant’s ~~2025~~2026 Annual Meeting of Stockholders, to be filed subsequent to the date hereof, are incorporated by reference into Part III of this Report. Such Definitive Proxy Statement will be filed with the SEC not later than 120 days after the conclusion of the registrant’s fiscal year ended December 31, ~~2024~~2025. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part of this Form 10-K.

TABLE OF CONTENTS

		Page #
		Page
PART I		1
Item 1.	Business	1
Item 1	Business	1
Item 1A.	Risk factors	6
Item 1A	Risk Factors	6
Item 1B.	Unresolved Staff Comments	24
Item 1B	Unresolved Staff Comments	23
Item 1C.	Cybersecurity	24
Item 1C	Cybersecurity	23
Item 2.	Properties	25
Item 2	Properties	24
Item 3.	Legal Proceedings	25
Item 3	Legal Proceedings	24
Item 4.	Mine Safety Disclosures	25
Item 4	Mine Safety Disclosures	24
PART II		25
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
Item 6.	[Reserved]	26
Item 6	Reserved	25
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	32
Item 8.	Financial Statements and Supplementary Data	43
Item 8	Financial Statements and Supplementary Data	32
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	43
Item 9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	32
Item 9A.	Controls and Procedures	43
Item 9A	Controls and Procedures	32
Item 9B.	Other Information	44
Item 9B	Other Information	33
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	44
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	33
PART III		34
Item 10.	Directors, Executive Officers and Corporate Governance	45
Item 10	Directors, Executive Officers and Corporate Governance	34
Item 11.	Executive Compensation	45
Item 11	Executive Compensation	34
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	45
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	34
Item 13.	Certain Relationships and Related Transactions, and Director Independence	45
Item 13	Certain Relationships and Related Transactions, and Director Independence	34
Item 14.	Principal Accounting Fees and Services	45
Item 14	Principal Accounting Fees and Services	34
PART IV		35
Item 15.	Exhibits and Financial Statement Schedules	46
Item 15	Exhibits and Financial Statement Schedules	35
Item 16.	Form 10-K Summary	50
Item 16	Form 10-K Summary	39
Signatures		5140

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements and information relating to ~~Agrify~~RYTHM, ~~Corporation~~Inc. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions are intended to ~~identify~~ identify forward-looking statements. These forward-looking statements include statements relating to:

●

our market opportunity;

●

the effects of increased competition as well as innovations by new and existing competitors in our market;

●

our ability to retain our existing customers and to increase our number of customers;

●

our ability to effectively manage or sustain our growth;

●

integration of complementary businesses and technologies;

●

our ability to maintain, or strengthen awareness of, our brand;

●

future revenue, hiring plans, expenses, capital expenditures, and capital requirements;

●

our ability to comply with new or modified laws and regulations that currently apply or become applicable to our business;

● the loss of ~~key~~contributions ~~employees~~of orpersonnel ~~management~~employed by Green Thumb and other qualified personnel and management;

●

our financial performance and capital requirements; and

●

our ability to maintain, protect, and enhance our intellectual property.

We caution you that the ~~foregoing~~ foregoing list may not contain all of the forward-looking statements made in this report. We have based these forward-looking statements ~~largely~~ largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short -term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors” section of this Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this report to conform these statements to actual results or to changes in our expectations.

SUMMARY OF RISK FACTORS

Below is a summary of the principal factors that make an investment in our Common Stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors”, and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the SEC before making an investment decision regarding our Common Stock.

●

risks relating to the federal laws and regulations around hemp-derived products, including from the 2026 Appropriations Act, and the risk that the continued beneficial legislative development is not guaranteed, and that existing regulations may be enforced against hemp-derived products, or new regulations being adopted;

●

risks of state and/or federal laws and/or regulations regulating, restricting or prohibiting hemp-derived products;

●

the illegality of hemp-derived THC products if it exceeds applicable limits;

●

risks from enforcement actions by federal agencies such as the FDA;

●

risks from competition from the illicit market, larger competitors and licensed cannabis sellers;

●

the potential for hemp-derived products to have negative health and/or safety impacts on consumers;

●

risks related to our products and associated with an immature industry;

●

the competition from the illicit market and larger competitors;

●

risks associated with the public opinion and perception of the cannabis and hemp industries, including perceived reputational or legal risks from third parties for doing business with the cannabis or hemp industries;

●

banking regulations that could limit access to banking services;

●

opposition from other industries towards the cannabis and hemp industries;

●

the legality of cannabis and/or hemp could be reversed in one or more states;

●

risks associated with changing legislation and interpretations of law;

●

our short operating history, and our ability to obtain additional financing;

●

risks associated with strategic acquisitions, strategic alliances, divestitures and other transactions;

●

we have substantial debt and other financial obligations, and we may incur even more debt;

●

our sales are difficult to forecast and we may be subject to growth-related risks;

● our reliance on third parties, key inputs and key suppliers for certain products or components sold to customers;

●

risks of product liability and similar claims;

● our products may be subject to product recalls and other risks related to our products;

●

our reliance on the continued contributions of personnel employed by Green Thumb and other qualified personnel;

●

our reliance on third parties to provide numerous operating capabilities;

● our ability to protect our ~~core technology and~~ intellectual property and defend against intellectual property claims;

●

risks associated with licensing our intellectual property to state-licensed cannabis operators;

●

risks associated with repurchase rights of our intellectual property;

iii

●

risks that actions of licensees could harm our business, as we are unable to control their actions;

●

our ability to use net operating losses;

●

risks associated with the ability of our co-manufacturers to comply with food safety, environmental or other laws and regulations, and with the specifications of our products;

●

risks associated with consumer acceptance of our brand portfolio and constraints on our ability to market our products;

●

risks associated with the lack of diversification of our business and asset portfolio;

● risks related to our products and associated with an immature industry;

●

risk associated with third party business partners and their perception of reputational risk;

● the competition from the illicit market and larger competitors;

● risks associated with the public opinion and perception of the cannabis and hemp industries;

● the potential for hemp-derived products to have negative health and/or safety impacts on consumers;

iii

● the federal laws and regulations around hemp-derived products, the risk that the continued beneficial legislative development is not guaranteed, and existing regulations may be enforced against hemp-derived products;

● risks of state laws regulating, restricting or prohibiting hemp-derived products.

●

risks associated with fraudulent, illegal or improper actions by business partners, employees or agents;

●

opposition from other industries towards the cannabis and hemp industries;

●

the legality of cannabis and/or hemp could be reversed in one or more states;

●

risks associated with changing legislation and interpretations of law;

● risks associated with ~~client~~our ~~licensing~~customers maintaining appropriate licenses and us obtaining or maintaining necessary permits and authorizations;

● banking regulations that could limit access to banking services;

●

risks associated with insurance coverage and uninsurable risks;

● the nature of the evolving and volatile industry;

●

risks associated with the concentration of ownership of our Common Stock;

●

the potential for a large number of shares eligible for public sale could depress the market price of our Common Stock;

●

our failure to meet the continued listing requirements of The Nasdaq Capital Market (“Nasdaq”) could result in a de-listing of our Common Stock;

●

the exercise of all or any number of outstanding warrants may dilute your holding of shares of our Common Stock;

●

provisions in our charter documents and Nevada law may prevent a change in control of our company;

●

the impact of reduced disclosure requirements under the JOBS Act on investors;

●

we have no intention to declare any dividends to our shareholders;

●

our obligations to develop and maintain effective internal controls over financial reporting;

● ~~material~~increases ~~weaknesses~~in ~~and~~costs, ~~ability~~disruption toof ~~remediate~~supply ~~them~~or shortage of raw materials could harm our business;

● risks associated with increases in costs or shortages of raw materials;

●

litigation that may adversely affect our business, financial condition, and results of operations;

●

liquidity of our Common Stock;

●

increasing costs and demands upon management as a result of complying with public company regulations;

●

risks related to trading ability of our Common Stock if our shares become subject to penny stock rules;

●

inherent risks related to our financial and operational projections;

●

risks related to analyst reports about us, our business or our market, or recommendations relating to our stock.

MARKET, INDUSTRY AND OTHER DATA

Unless otherwise indicated, information contained in this Annual Report on Form 10-K concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources and on our knowledge of the markets for our services. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified any third-party information and cannot assure you of its accuracy or completeness. While we believe the market position, market opportunity and market size information included in this report is generally reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and elsewhere in this report. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

In addition, we own or have rights to trademarks or trade names that we use in connection with licensing revenue and the operation of our business, including our corporate names, logos, and website names. In addition, we own or have the rights to copyrights, trade secrets and other proprietary rights that protect the content of our products and that we license to others for use in their products. This report may also contain trademarks, service marks and trade names of other companies, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this report is not intended to, and should not be read to, imply a relationship with or endorsement or sponsorship of us. Solely for convenience, some of the copyrights, trade names and trademarks referred to in this report are listed without their ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our copyrights, trade names and trademarks. All other trademarks are the property of their respective owners.

PART I

Item 1. Business.

Unless otherwise stated or the context otherwise requires, references in this report to “~~Agrify~~RYTHM”, the “Company,” “we,” “us,” “our,” or similar references mean ~~Agrify~~RYTHM, ~~Corporation~~Inc. and its subsidiaries on a consolidated basis.

Business Overview

~~Agrify~~RYTHM, isInc. a(formerly ~~developer~~Agrify Corporation) of(together ~~branded~~with ~~innovative~~its ~~solutions~~subsidiaries, ~~for~~ the ~~cannabis and~~“Company” ~~hemp~~or ~~industries.~~“RYTHM”) ~~Our~~delivers ~~Señorita~~well-being ~~brand~~to ~~offers~~ consumers through its portfolio of hemp-derived tetrahydrocannabinol (“hemp-derived THC”) products and iconic licensed brands. The Company’s portfolio of consumer-packaged goods brands includes RYTHM, incredibles, Dogwalkers, Beboe, &Shine, Doctor Solomon’s, Good Green and Señorita. The RYTHM and Señorita brands offer consumers hemp-derived THC beverages ~~that~~and ~~mirror~~are sold at top retailers, online and through direct-to-retail partnerships. The Señorita brand mirrors well-known cocktails like a margarita – in four ~~three~~ flavors – classic Lime Jalapeño Margarita, Mango Margarita, Paloma and ~~Paloma~~Ranch Water. Known for its clean, fresh taste and commitment to high-quality, natural ingredients, Señorita offers a low-sugar, low-calorie alternative to alcoholic beverages and is available in fifteen U.S. states and Canada including at top retailers ~~including~~such as Total Wine, ABC Fine Wine & Spirits, and Binny’s. The RYTHM branded beverage comes in ~~nine~~two Ufruit-driven flavors with effect-based ingredients.S. ~~states~~Other hemp-derived products including incredibles and ~~Canada,~~Beboe ~~with~~edible ~~plans~~products ~~for~~are ~~expansion~~primarily sold online and ~~future~~through ~~availability~~direct-to-retail inpartnerships. ~~premier~~In onaddition to the sale of hemp-~~premises~~derived products ~~destinations~~(“Non-licensing Revenue”), the Company licenses its brands to be manufactured and distributed in exchange for a licensing fee (“Licensing Revenue”).

~~Corporate~~Recent Developments

~~Sale~~Name ~~of Cultivation Business~~Change

OnFollowing ~~December~~our ~~31, 2024, we~~acquisition ~~entered~~of ~~into~~VCP ~~and~~IP ~~closed an Asset Purchase Agreement (the “Cultivation Purchase Agreement”) with CP Acquisitions~~Holdings, LLC ~~(“CP”), an entity affiliated with Raymond Chang, our former Chairman~~ and ~~Chief Executive Officer. Under~~ the ~~Cultivation~~RYTHM ~~Purchase Agreement~~brand, ~~CP acquired~~we ~~assets~~changed ~~from us relating to~~ our ~~VFU~~name ~~business,~~from ~~including the related~~ Agrify ~~total~~Corporation ~~turnkey~~to ~~(“TTK”) solution assets and Agrify InsightsTM software solutions (collectively~~RYTHM, ~~the “Cultivation Business”)~~Inc. ~~The~~effective ~~aggregate~~as ~~consideration received by us for the sale~~ of ~~the~~September 2, ~~Cultivation~~2025, ~~Business~~and ~~consisted~~changed ~~of the assumption by CP of (i) all of~~ our ~~obligations~~ticker ~~pursuant~~symbol ~~secured indebtedness~~on ~~then~~the ~~held~~Nasdaq byCapital CPMarket ~~with~~from anAGFY ~~aggregate~~to ~~amount~~RYM ofeffective ~~principal~~as ~~and accrued interest~~ of ~~approximately~~the $7market ~~million,~~open ~~and~~on ~~(ii)~~that ~~certain other liabilities relating to the Cultivation Business~~date.

~~February~~Convertible ~~2025~~Note ~~Changes in Directors~~Issuances

On ~~February~~November 5, ~~2025~~2024, we issued a Secured Convertible Note (the ~~Company~~“November ~~announced~~2024 ~~that~~Note”) ~~Peter~~with ~~Shapiro~~an ~~and~~original ~~Sanjay Tolia~~principal ~~were~~amount ~~appointed~~of $10.0 million to RSLGH, ~~our~~LLC ~~Board~~(“RSLGH”), a subsidiary of ~~Directors~~Green ~~(the~~Thumb Industries Inc. (“~~Board~~Green Thumb”), ~~effective~~a ~~January~~related 31party. On November 3, 2025, RSLGH elected to convert the outstanding principal and interest through November 3, 2025, into pre-funded warrants subject to a 49.99% ~~The~~beneficial ~~Company~~ownership ~~also~~limitation ~~announced~~and ~~Richard~~any required approval of stockholders under Nasdaq listing rules. The ~~Drexler’s~~outstanding ~~departure~~principal ~~from~~and ~~the~~accrued ~~Board~~interest ~~effective~~amounts asof $10 million and $175 thousand respectively, resulted in the issuance of 3,167,564 ~~January~~and 3155,433 ~~2025~~pre-funded warrants, respectively. Each pre-funded warrant represents the right to acquire one share of our common stock.

~~Señorita~~On ~~Acquisition~~May 22, 2025, we issued Secured Convertible Notes with an aggregate original principal amount of $30.0 million (the “May 2025 Notes”) to RSLGH and to certain other accredited investors. The May 2025 Notes mature on November 22, 2026 and are convertible into shares of common stock or, at the holder’s election, pre-funded warrants, at a conversion price of $23.53, subject to a 49.99% beneficial ownership limitation for RSLGH, a 4.99% beneficial ownership limitation for the other holders, and any required approval of stockholders under Nasdaq listing rules.

On ~~December~~August 1225, ~~2024~~2025, we ~~closed~~issued Secured Convertible Notes with an ~~Asset~~aggregate ~~Purchase~~original ~~Agreement~~principal amount of $50.0 million (the “~~Purchase Agreement~~August 2025 Notes”) ~~for~~and, collectively with the ~~acquisition~~November of2024 ~~substantially~~Note ~~all~~and ofthe May 2025 Notes, the ~~assets~~“Notes”) ofto ~~Double~~RSLGH orand ~~Nothing~~to ~~LLC~~certain ~~(“Double~~other oraccredited ~~Nothing”)~~investors. inThe ~~connection~~August ~~with~~2025 ~~its~~Notes ~~Señorita~~will ~~brand~~mature ofon ~~beverages~~February ~~containing~~25, ~~hemp-derived~~2027 ~~cannabinoids.~~and ~~Under~~are ~~the~~convertible ~~Purchase~~into ~~Agreement,~~shares weof ~~acquired the~~common ~~Señorita~~stock ~~brand~~or, ofat ~~beverages~~the ~~and~~holder’s ~~related~~election, pre-funded ~~assets~~warrants, ~~from~~at ~~Double~~a orconversion ~~Nothing~~price ~~relating~~of $29.475, subject to ~~the~~a ~~portions~~49.99% ofbeneficial ~~its~~ownership ~~business~~limitation ~~operating~~for ~~in compliance~~RSLGH, ~~with~~a ~~Canadian~~4.99% ~~law~~beneficial ownership ~~and~~limitation ~~under~~for the ~~Agricultural~~other ~~Improvement~~holders, ~~Act~~and ofany ~~2018~~required ~~(the~~approval ~~“2018~~of ~~Farm~~stockholders ~~Bill”)~~under ~~and~~Nasdaq ~~applicable~~listing ~~state laws~~rules.

~~Private~~Each ~~Placement~~Note is a secured obligation and ranks senior to all of our indebtedness except for the other Notes. Each Note accrues interest at a 10.0% annualized rate, with interest to be paid on the first calendar day of each September and March while the Note is outstanding, which may be paid in the form of pre-funded warrants or, in the case of the August 2025 Notes and at the election of the holders of a majority of the August 2025 Notes, cash or common stock, subject to any applicable Nasdaq restrictions. The principal amount of each Note will be payable on its applicable maturity date.

OnThe ~~November~~Notes ~~20,~~impose ~~2024,~~certain customary weaffirmative ~~raised~~and ~~gross~~negative ~~proceeds~~covenants ofupon ~~approximately $25~~us.~~9 million~~ inIf aan ~~private~~event ~~placement~~of ~~following~~default ~~the~~under ~~closing~~a ofNote ~~certain~~occurs, ~~securities~~the ~~purchase~~holder ~~agreements~~can ~~with~~elect ~~institutional~~to ~~investors~~redeem ~~and other~~the ~~accredited~~Note ~~investors.~~for Incash ~~connection~~equal ~~with~~to the ~~private~~then-outstanding ~~placement,~~principal weamount ~~issued~~of the Note (i)or ~~203,988~~such ~~shares~~lesser ~~Common~~principal ~~Stock~~amount ~~and~~accelerated ~~(ii)~~by ~~pre-funded~~the ~~warrants~~applicable toholder), ~~purchase~~plus upaccrued toand anunpaid ~~aggregate of 949~~interest,~~515~~ ~~shares~~including ofdefault ~~common~~interest, ~~stock~~which accrues at a ~~purchase~~rate ~~price~~ per ~~share~~annum ofequal ~~Common~~to ~~Stock~~14% offrom ~~$22.30~~the ~~and~~date of a ~~purchase price~~default ~~per~~or ~~pre-funded~~event ~~warrant~~ of ~~$22~~default.~~2999.~~

~~Convertible~~Shared ~~Note~~Services Agreements

On ~~November~~May 520, ~~2024~~2025, we ~~issued~~entered ainto ~~Secured~~an ~~Convertible~~Amended ~~Note~~and Restated Shared Services Agreement (the “~~Note~~Services Agreement”) towith ~~RSLGH~~Vision Management Services, LLC (~~the~~ “~~Investor~~VMS”), an aindirect wholly-owned subsidiary of Green Thumb, ~~Industries Inc.~~a ~~(“Green~~related ~~Thumb”)~~party. ~~The~~Under ~~Note~~the isServices aAgreement, ~~secured~~VMS ~~obligation~~provides certain administrative, supply chain, operations management, sales and ~~ranks~~marketing, ~~senior~~and technical services to ~~all~~us ofand our ~~indebtedness~~subsidiaries. ~~except~~As consideration for ~~certain indebtedness~~those ~~set~~services, ~~forth~~we inpay VMS service fees equal to (i) 125% of the ~~Note.~~costs ~~The~~incurred ~~Note~~by ~~will~~VMS ~~mature~~in onconnection ~~November~~with 5any services provided by non-dedicated personnel, ~~2025~~including (the ~~“Maturity~~applicable ~~Date”)~~portion of salary, bonus, equity compensation cost, health care and ~~contains~~other abenefits, ~~10.0%~~and ~~annualized~~(ii) ~~interest~~100% ~~rate,~~of such costs incurred by VMS in connection with ~~interest~~services toprovided beby ~~paid~~dedicated onpersonnel and any third-party costs incurred in connection with the ~~first~~services. ~~calendar~~The ~~day~~service offees ~~each~~are ~~September~~payable in cash or, upon mutual agreement of us and ~~March~~VMS ~~while~~and to the ~~Note~~extent ispermitted ~~outstanding~~under applicable Nasdaq listing rules, in ~~cash~~common stock or in pre-funded warrants, ~~beginning~~with the value per share of common stock or pre-funded warrant being ~~January~~equal 1,to ~~2025~~$26.68. The ~~principal~~maximum ~~amount~~cost for services provided by non-dedicated personnel during the one-year term of the ~~Note~~Services ~~will~~Agreement may benot ~~payable~~exceed $3.0 million unless the parties otherwise agree in writing. The Services Agreement is for a term of one year, is terminable by either party on 90 days’ notice for any or no reason, and will automatically renew for successive one-year terms unless terminated by either party at least thirty days prior to the ~~Maturity~~end ~~Date~~of the applicable term.

~~2024~~On ~~Board~~March 21, 2025, we entered into a Shared Services Agreement (the “CFO Services Agreement”) with VMS, pursuant to which Brad Asher provides his services as Chief Financial Officer. As consideration for those services, we pay VMS a monthly fee based on its direct costs in providing such services, with a maximum of $72,552 per month. The CFO Services Agreement has a term of one year, is terminable by either party on 90 days’ notice for any or no reason, and ~~Management~~will ~~Changes~~automatically renew for successive one year terms unless terminated by either party at least thirty days prior to the end of the applicable term. As a result of the services provided under the Services Agreement and the CFO Services Agreement, we do not have any direct employees other than our Interim Chief Executive Officer.

~~Also~~Licensing on November 5, 2024, immediately following the issuance of the Note, Raymond Chang, our prior CEO and Chairman, resigned as a member of the Board and any subsidiaries and as President and Chief Executive Officer of the Company, and I-Tseng Jenny Chan resigned as a member of the Board. Benjamin Kovler, Armon Vakili and Richard Drexler replaced Raymond Chang and I-Tseng Jenny Chan on the Board and Benjamin Kovler assumed the position of Interim CEO.Revenue

~~Effective~~On May 1720, ~~2024~~2025, ~~Leonard~~we acquired ~~Sokolow~~from ~~resigned~~VCP asIP Holdings, LLC (“VCP”) an indirect wholly-owned subsidiary of Green Thumb, a ~~member~~related party, 100% of the ~~Board~~equity interests ~~and~~of ~~its~~MC ~~committees.~~Brands, ~~Effective~~LLC ~~December~~pursuant 3,to ~~2024~~which we obtained rights relating to MC Brands, ~~Brian~~LLC ~~Towns~~and ~~resigned~~its ~~from~~wholly-owned ~~his~~subsidiary ~~roles~~Core Growth LLC (together referred to as ~~the~~“MC ~~Company’s Executive~~Brands”) ~~Vice~~the ~~President~~assets ~~and~~of ~~General~~which ~~Manager~~consist primarily of ~~Extraction~~intellectual ~~Division~~property rights to ~~pursue~~the ~~other opportunities~~incredibles brand. OnConcurrent ~~December~~with ~~31,~~the ~~2024~~transaction, inwe ~~connection~~ entered into a license agreement with ~~the~~GTI ~~Cultivation~~Core, ~~Purchase~~LLC, ~~Agreement~~(“GTI Core”), ~~David~~an ~~Kessler~~indirect subsidiary ~~ceased~~of ~~serving~~Green asThumb, pursuant to which GTI Core was granted the ~~Company’s~~right ~~Chief~~to ~~Science~~use ~~Officer,~~the ~~Executive~~incredibles ~~Vice~~brand ~~President~~in connection with its existing ~~and~~businesses. ~~General~~Consideration ~~Manager~~payable by GTI Core under the license agreement consists of ~~Cultivation~~a monthly license fee payable in cash. We began recognizing licensing revenue under this agreement in May 2025.

~~Lines~~On August 27, 2025, we acquired from VCP23, LLC an indirect wholly-owned subsidiary of ~~Business~~Green Thumb, 100% of the equity interests of VCP IP Holdings, LLC pursuant to which we obtained rights relating to VCP IP Holdings, LLC, the assets of which consist primarily of intellectual property rights to the RYTHM, Beboe, Dogwalkers, Doctor Solomon’s, & Shine, and Good Green brands (these rights, together with the incredibles brand rights, referred to as “Brand Rights”). Concurrent with the transaction, we entered into a license agreement with GTI Core pursuant to which GTI Core was granted the right to use the Brand Rights in connection with its existing businesses. Consideration payable by GTI Core under the license agreement consists of a monthly license fee payable in cash. We began recognizing licensing revenue under this agreement in November 2025. The MC Brands and VCP purchase agreements also granted Green Thumb or its affiliates certain repurchase rights, which may be triggered by events outside of the control of Green Thumb and the Company.

Hemp-Derived Beverages

We acquired the Señorita brand of hemp-derived THC beverages in December 2024. Señorita was designed and formulated by world-class winemakers Charles Bieler and Joel Gott. Recognizing a growing generational demand for adult beverage alternatives, Bieler and Gott gave the classic margarita a modern twist—replacing alcohol with hemp-derived THC to create a delightful, hangover-free beverage alternative. Through the use of all-natural, premium ingredients like organic Mexican agave, fresh lime juice and sweet, tangy mango, Señorita quickly gained acclaim, taking home the top spot in The High Times Cannabis Cup just one year after inception. Gott and Bieler continue to collaborate on the brand with Mr. Kovler and the Agrify team.

Señorita currently offers three award-winning flavors – classic Lime Jalapeño Margarita, Mango Margarita and Paloma. A fourth flavor, low-calorie Ranch Water, is expected to debut in 2025. Señorita’s hemp-derived beverages comply with the 2018 Farm Bill and are currently available at top retailers including Total Wine, ABC Fine Wine & Spirits, and Binny’s in nine U.S. states and Canada. Products are also available for direct-to-consumer purchase where permissible under state law at senoritadrinks.com.

Extraction Solutions

Our extraction equipment and business solutions can be used within indoor processing facilities by fully licensed cannabis and hemp cultivators and processors or in some cases, by individual processors for individual use in compliance with applicable law. We sell our proprietary extraction solutions to independent, licensed cultivators and processing labs.

In light of our increased focus on hemp-derived beverages following the Señorita acquisition, the Board is exploring a variety of alternatives for the extraction business while focusing on optimizing shareholder value creation.

We strategically acquired four of the top brands in the extraction space in late 2021 and early 2022: in Precision Extraction, PurePressure, Lab Society, and Cascade Sciences. These iconic brands encompass everything from hydrocarbon, alcohol, and solventless extraction to distillation and postHemp-~~processing.~~Derived Combined, these four acquisitions provided what we believed to be one of the most comprehensive extraction solutions from a single provider. Our extraction brands provide equipment and solutions for extraction, post-processing, and testing for the cannabis and hemp industries. The extraction, post-processing and testing services are complementary and highly attractive areas of the supply chain.Products

We acquired the Señorita brand of hemp-derived THC beverages in December 2024. Señorita was designed and formulated by world-class winemakers Charles Bieler and Joel Gott. Recognizing a growing generational demand for adult beverage alternatives, Mr. Bieler and Mr. Gott gave the classic margarita a modern twist—replacing alcohol with hemp-derived THC to create a delightful adult beverage alternative. Through the use of all-natural, premium ingredients like organic Mexican agave, fresh lime juice and sweet, tangy mango, Señorita quickly gained acclaim, taking home the top spot in The High Times Cannabis Cup just one year after inception. Mr. Gott and Mr. Bieler continue to collaborate on the brand with Mr. Kovler and the RYTHM team.

Señorita currently offers four award-winning flavors – classic Lime Jalapeño Margarita, Paloma, Mango Margarita, and Ranch Water. Señorita’s hemp-derived beverages are currently available at top retailers including Total Wine, ABC Fine Wine & Spirits, and Binny’s in fifteen U.S. states and Canada. Products are also available for direct-to-consumer purchase where permissible under state law at senoritadrinks.com.

The Company’s portfolio of consumer-packaged goods brands includes RYTHM, incredibles, Dogwalkers, Beboe, &Shine, Doctor Solomon’s, Good Green and Señorita. The RYTHM and Señorita brands offer consumers hemp-derived THC beverages and are sold at top retailers, online and through direct-to-retail partnerships. The Señorita brand mirrors well-known cocktails like a margarita in four flavors and the RYTHM branded beverage comes in two fruit-driven flavors with effect-based ingredients. Other hemp-derived products including incredibles and Beboe edible products are primarily sold online and through direct-to-retail partnerships.

Co-Manufacturing Arrangements

Our finished goods are manufactured by various third-party co-manufacturers situated throughout the United States and Canada, under separate arrangements with each party. Our co-manufacturing arrangements vary in terms and, from time to time, we may enter into manufacturing contracts with agreed upon minimum quantities to ensure continuity of supply of certain products in certain territories. We continue to actively seek alternative and/or additional co-manufacturing facilities with adequate capacity and capability for the production of our various products to minimize transportation costs as well as mitigate the risk of disruption in production.

Our ability to estimate demand for our products is imprecise, particularly with new products, and may be less precise during periods of rapid growth or regulatory uncertainty which is currently common in our industry. If we materially underestimate demand for our products and/or are unable to secure sufficient ingredients or raw materials and/or procure adequate co-manufacturing arrangements and/or obtain adequate or timely shipment of our products, we might not be able to satisfy demand on a short-term basis. Conversely, if demand for our products declines or does not materialize as expected, including due to regulatory uncertainty or changes in applicable laws or regulations, we may accumulate excess inventory, which could lead to inventory obsolescence, write-downs, or reduced margins.

Distribution Agreements

During 2025 we continued to expand distribution of our hemp-derived products in our domestic markets. We have entered into agreements with various distributors providing for the distribution of certain of our hemp-derived products, subject to certain terms and conditions, which may vary depending on the form of the agreement. Such agreements remain in effect for their then-current term as long as our products are being distributed, but are subject to specified termination rights held by each party. Additionally, we are entitled to terminate certain distribution agreements at any time without cause upon payment of a termination fee, which may be material depending on the agreement.

Discontinued Operations

Cultivation Solutions

Prior to its sale on December 31, 2024, we sold proprietary cultivation solutions to independent licensed cultivators as part of our Cultivation Business. The two primary products we sold were the VFUs and Agrify Insights™ software. The proprietary VFU technology offered a modular, compartmentalized micro-climate growing system for indoor vertical farming. The VFU system was designed for craft farmers, single-state operators, and multi-state operators who were looking to consistently produce higher-quality crops at scale. The VFUs were designed to line up horizontally in rows, and could be stacked vertically up to three units tall. The VFUs were designed to work in conjunction with the Agrify Insights™ software. Each VFU sold included a license for Agrify Insights™ and a monthly Software-as-a-Service (“SaaS”) subscription fee was charged per VFU. The VFU could not operate successfully without Agrify Insights™. Agrify Insights™ license agreements were generally for a multi-year term, with an annual auto-renewal.

~~The~~Extraction proprietary VFU technology offered a modular, compartmentalized micro-climate growing system for indoor vertical farming. The VFU system was designed for craft farmers, single-state operators, and multi-state operators who were looking to consistently produce higher-quality crops at scale. The VFUs were designed to line up horizontally in rows, and could be stacked vertically up to three units tall.Solutions

~~The~~Prior ~~VFUs~~to its discontinuation on March 30, 2025, our extraction equipment and business solutions that were ~~designed~~a topart of our Extraction Business could be used within indoor ~~work~~processing facilities by fully licensed cannabis and hemp cultivators and processors or in ~~conjunction~~some ~~with~~cases, ~~the~~by ~~Agrify~~individual ~~Insights™~~processors ~~software.~~for ~~Each~~individual use ~~VFU~~in compliance with applicable law. We sold ~~included~~our aproprietary ~~license~~extraction ~~for~~solutions ~~Agrify~~to ~~Insights™~~independent, ~~and~~licensed acultivators ~~monthly~~and processing ~~Software-as-a-Service~~labs. ~~(“SaaS”)~~We ~~subscription~~had ~~fee~~strategically ~~was~~acquired ~~charged~~four ~~per~~brands ~~VFU.~~in ~~The~~the ~~VFU~~extraction ~~could~~space ~~not~~in ~~operate~~late ~~successfully~~2021 ~~without~~and ~~Agrify~~early 2022: Precision Extraction, PurePressure, ~~Insights™~~Lab Society, and weCascade ~~typically~~Sciences. ~~charged~~These ~~between~~brands $1encompassed hydrocarbon,~~500~~ ~~to $2~~alcohol,~~400~~ ~~per~~and ~~VFU~~solventless ~~sold~~extraction ~~annually~~and distillation and post-processing solutions. ~~Agrify~~Our ~~Insights™~~extraction ~~license~~brands ~~agreements~~provided ~~were generally~~equipment and solutions for aextraction, ~~multi~~post-~~year term~~processing, ~~with~~and antesting ~~annual~~for ~~auto-renewal~~the cannabis and hemp industries.

TTK Solution

The Company’s TTK solution was the industry’s first-of-its-kind program in which the Company engaged with qualified cannabis operators in the early phases of their business plans and provides critical support, typically over a 10-year period, which includes: access to capital for construction costs, the design and build-out of their cultivation and extraction facilities, state-of-the-art cultivation and extraction equipment, subscription to the Company’s Agrify Insights™, process design, training, implementation, proven grow recipes, product formulations, data analytics, and consumer branding. While we have not entered into any new TTK solutions during the fiscal year ended December 31, 2024 and will not in the future, we have previously deployed this program with certain key former customers. The data-driven TTK solution for cultivation solutions enabled our customers to get to market faster by providing them with seamlessly integrated hardware and software offerings as well as access to capital and a wide range of associated services from experts including consulting, training, design, engineering, and construction.

Regulatory Landscape Overview

The regulatory landscape for products infused with hemp-derived delta-9 tetrahydrocannabinol and other ~~psychoactive~~ cannabinoids with intoxicating effects (collectively “hemp-derived THC”) is a source of material risk for the Company. While the 2018 Farm Bill (defined below) both defined and legalized hemp under federal law, the subsequent use of hemp to make ~~psychoactive or~~THC ~~intoxicating~~ consumer products ~~created~~was anreportedly ~~unexpected~~not anticipated ~~new~~by ~~market~~legislators. ~~This~~Those ~~market~~products ~~mirrors~~are ~~the~~similar in composition to certain state-legal and federally illegal cannabis consumer ~~industry~~products, but ~~without~~are ~~the~~not ~~rigid~~controlled ~~regulations~~substances and ~~heavy~~thus ~~tax~~can ~~burdens~~be ~~and~~shipped ~~without~~via ~~the prohibition on~~ interstate ~~shipping~~commerce. AsTheir ~~the~~legal ~~industry expanded,~~status ~~lawmakers~~ at the federal, ~~state,~~level also ~~and~~means ~~local~~that ~~levels~~they ~~raised~~generally ~~concerns~~do ~~about~~not ~~minors’~~fall ~~easy~~under ~~access~~the tosame ~~these~~state ~~products,~~regulatory ~~inadequate testing,~~schemes ~~and~~or ~~the~~have ~~need for regulations governing~~ the ~~manufacturing,~~same ~~marketing,~~heavy ~~testing,~~tax ~~sale,~~burdens ~~and~~that ~~transportation~~state legal ofcannabis ~~hemp~~ products do. As ~~a result,~~the toindustry ~~date~~expanded, ~~several~~lawmakers ~~states~~at ~~have~~the ~~passed~~state ~~laws~~level ~~regulating,~~have ~~restricting,~~begun orto ~~banning~~regulate ~~hemp-derived~~such ~~THC~~ products~~. In addition~~, ~~during each~~including ~~renewal~~with ofage ~~the~~limits ~~2018~~and ~~Farm~~manufacturing ~~Bill~~standards; however, ~~legislators~~some ~~proposed~~states ~~amendments~~have ~~that~~instead ~~would~~passed ~~make~~laws restricting or prohibiting hemp-derived ~~delta-9~~ THC products ~~federally~~due ~~illegal. Although these amendments have not passed, the 2018 Farm Bill is set~~ to ~~expire~~concerns onraised ~~September~~by 30federal, ~~2025~~state, and ~~additional~~local ~~amendments~~lawmakers ~~seeking~~about tominors’ ~~curtail the~~access ~~hemp~~to ~~industry~~some ~~could be introduced. All~~ of ~~this~~these ~~creates~~products, inadequate ~~significant uncertainty for Agrify’s business of manufacturing~~testing, ~~marketing~~ and ~~selling~~other ~~hemp-derived~~public ~~delta-9~~health ~~THC products~~concerns.

3Passed on November 12, 2025, the Continuing Appropriations and Extensions Act of 2026 (H.R. 5371) (the “2026 Appropriations Act”) includes a provision (section 781) to amend the definition of hemp in the Agricultural Improvement Act of 2018 (the “2018 Farm Bill”) to effectively prohibit the currently commercialized hemp-derived THC products, including the Company’s products, although the change does not become effective for 365 days from the date of enactment. Efforts are underway to repeal, replace, or delay this amendment, but whether any change will occur is uncertain. If this provision of the 2026 Appropriations Act is not repealed, replaced or delayed by its effective date, we will not be able to sell our current line of hemp-derived THC products. In addition, this would meet one of the eligibility conditions that would permit the repurchase right to become exercisable under the MC Brands and VCP purchase agreements. However, satisfaction of such conditions would not obligate Green Thumb or its affiliates to exercise the repurchase option, which remains within their discretion.

On December 18, 2025, President Trump issued an Executive Order directing that cannabis be rescheduled from Schedule I to Schedule III (which we refer to as “rescheduling”). The Order directs the Attorney General to “take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the Controlled Substances Act in the most expeditious manner.” A rescheduling may have far reaching implications that are not yet fully understood, including potentially for hemp and hemp products. The Executive Order also discussed a newly proposed pilot program where CMS (Centers for Medicare & Medicaid Services), through CMMI (Center for Medicare & Medicaid Innovation), will be able to cover the costs for certain cannabinoid based hemp therapies for seniors. Additional details for this program and its requirements are still pending, and it is uncertain whether the Company would be able to participate or whether the pilot program will drive additional competition from the pharmaceutical or other industries. Such other companies may have a longer operating history, a higher capitalization, additional financial resources, more manufacturing and marketing experience, greater access to public equity and debt markets and more experienced management than the Company. In addition to the pilot program, the Executive Order directs White House staff to work with Congress to “update the statutory definition” of hemp to allow Americans to access cannabidiol (“CBD”) products while permitting Congress to “restrict the sale of products posing serious health risks,” and to consult with relevant executive branch departments to “develop a regulatory framework for hemp-derived cannabinoid products, including development of guidance on an upper limit on milligrams of THC per serving with considerations on per container limits and CBD to THC ratio requirements.” It is unclear how this will be achieved, and whether Congress—which just revised the definition of hemp in the 2026 Appropriations Act—will agree to further changes. All of this regulatory volatility creates significant uncertainty for our business of selling hemp-derived THC products.

Competitive Landscape Overview

The U.S. cannabis and cannabis-related industries are, and are expected to continue to be, competitive. A number of other companies engage in, and may in the future engage in, cannabis-related businesses, operate businesses in competition with us and purchase businesses and assets or make investments that we will also seek to purchase or make. We face and expect to continue to face competition from state-licensed medical and adult-use dispensaries.

Large chain stores, manufacturers, retailers, beverage and other consumer products companies that also recognize the potential for financial success through acquisitions and investment in the hemp-derived THC beverage industry could strategically acquire competitors or invest in creating their own brands. In In doing so, these larger competitors could produce and sell competing products at a lower price and establish a larger brand presence. We We may not have the personnel, products, marketing and distribution capabilities, and/or financial resources to compete effectively against such larger competitors.

We also face competition ~~from~~ from the illicit market and illegal dispensaries and cultivation operations that are unlicensed, not regulated and that are selling cannabis or hemp-derived THC products. Any inability or unwillingness of law enforcement authorities to enforce existing laws prohibiting the unlicensed production and sale of cannabis or hemp-derived THC products could result in increased competition for us.

Intellectual Property

We rely on a combination of patent, trademark, copyright, and trade ~~secret~~secrets, including federal, state and common law rights in the U.S. and other countries, nondisclosure agreements, and other measures to protect our intellectual property. We require our employees, consultants, and advisors to execute confidentiality agreements and to agree to disclose and assign to us all inventions conceived under their respective employment, consultant, or advisor agreement, using our property, or which relate to our business. Despite any measures taken to protect our intellectual property, unauthorized parties may attempt to copy aspects of our products or to obtain and use information that we regard as proprietary. Our business, including the revenue we recognize through licensing our brands, is affected by our ability to protect against misappropriation and infringement of our intellectual property, including our trademarks, service marks, patents, domain names, copyrights, brand rights, Prepaid License Rights and other proprietary rights.

Human Capital Resources

As of March 153, ~~2025~~2026, weour ~~had~~human acapital ~~total~~resources ofare 11predominantly provided ~~employees,~~pursuant ~~all~~to ofshared ~~whom~~services ~~were employed~~agreements ~~full-time.~~with ~~None~~Green ofThumb, ~~our~~which ~~employees~~ are ~~subject~~largely tofocused ~~collective~~on ~~bargaining~~sales ~~agreements.~~and Inmarketing ~~addition,~~functions. weAs ~~rely~~of ~~on a shared services agreement~~that ~~with~~date, ~~Green~~we ~~Thumb~~had toone ~~provide~~employee ~~much~~and ofapproximately ~~our~~50 ~~human~~dedicated ~~capital needs~~consultants.

Environmental Regulations

We are not aware of any ~~environmental~~ environmental laws that have been enacted, nor are we aware of any such laws being contemplated for the future, that ~~directly~~have or would be expected to have a material impact on our business.

Implications of Being ana ~~Emerging Growth Company and~~ Smaller Reporting Company

WeBecause the market value of our voting and non-voting common stock held by non-affiliates was less than $700 million measured on the last business day of our second fiscal quarter and our annual revenue was less than $100 million during the most recently completed fiscal year prior to such date, we qualify as ana “~~emerging growth~~smaller reporting company” as defined in the ~~Jumpstart~~Securities ~~Our~~Exchange ~~Business Startups~~ Act of ~~2012~~1934, ~~which~~as weamended, ~~refer~~or the Exchange Act. We may continue to asbe a smaller reporting company if either (i) the ~~JOBS~~market ~~Act~~value of our shares held by non-affiliates is less than $250 million or (ii) the market value of our shares held by non-affiliates is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year prior to the determination date. As a ~~result~~smaller reporting company, we ~~are~~may ~~permitted~~provide toless public disclosure than larger public companies, including the inclusion of only two years of audited financial statements and ~~intend~~only ~~to,~~two ~~rely~~years onof ~~exemptions~~related ~~from~~management’s ~~certain~~discussion ~~disclosure~~and ~~requirements~~analysis ~~that~~of financial condition and results of operations disclosure. While we are ~~applicable~~a tosmaller ~~other~~reporting ~~companies~~company, ~~that~~we are also not ~~emerging~~required ~~growth~~to ~~companies.~~comply ~~Accordingly,~~with ~~for~~the soauditor attestation requirements of Section 404 of the Sarbanes-Oxley Act as long as we are anconsidered ~~“emerging~~a ~~growth~~non-accelerated ~~company~~filer or our annual revenues are less than $100 million. As a result,” the information that we ~~will~~provide ~~not~~to our stockholders may be ~~required~~different than what you might receive from other public reporting companies in which you hold equity interests. We cannot predict if investors will find our common stock less attractive as a result of our reliance on these exemptions. If some investors find our common stock less attractive as a result of any choice we make to: reduce disclosure, there may be a less active trading market for our common stock and the market price for our common stock may be more volatile.

~~● engage an auditor to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act;~~5

● comply with any requirement that may be adopted by the Public Company Accounting Oversight Board, or the PCAOB, regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

● submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency,” and “say-on-golden parachutes;” or

● disclose certain executive compensation-related items such as the correlation between executive compensation and performance and the comparison of the chief executive officer’s compensation to median employee compensation.

In addition, the JOBS Act provides that an “emerging growth company” can use the extended transition period for complying with new or revised accounting standards.

We will remain an “emerging growth company” until the earliest to occur of:

● our reporting $1 billion or more in annual gross revenues;

● our issuance, in a three-year period, of more than $1 billion in non-convertible debt;

● the end of the fiscal year in which the market value of our Common Stock held by non-affiliates exceeds $700 million on the last business day of our second fiscal quarter; and

● December 31, 2026.

We cannot predict if investors will find our securities less attractive because we may rely on these exemptions, which could result in a less active trading market for our securities and increased volatility in the price of our securities.

Additionally, we are a “smaller reporting company” (and may continue to qualify as such even after we no longer qualify as an emerging growth company) and accordingly may provide less public disclosure than larger public companies, including the inclusion of only two years of audited financial statements and only two years of management’s discussion and analysis of financial condition and results of operations disclosure. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

Corporate Information

RYTHM, Inc. was incorporated in the state of Nevada on June 6, 2016, originally incorporated as Agrinamics, Inc. (or Agrinamics). On September 16, 2019, Agrinamics amended its articles of incorporation to reflect a name change to Agrify Corporation. On September 2, 2025, Agrify Corporation amended its articles of incorporation to reflect a name change to RYTHM, Inc. Our executive offices are located at ~~2468~~2220 ~~Industrial~~Hicks ~~Row~~Road, ~~Dr.~~Suite 210, Rolling ~~Troy~~Meadows, ~~Michigan~~Illinois ~~48084~~60008. Our telephone number at our executive offices is (855) 420-0020. Our website address is www.rythminc.com.

Agrify Corporation was incorporated in the state of Nevada on June 6, 2016, originally incorporated as Agrinamics, Inc. (“Agrinamics”). On September 16, 2019, Agrinamics amended its articles of incorporation to reflect a name change to Agrify Corporation.

Available Information

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are filed with the SEC. We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements and other information with the SEC. Such reports and other information filed by us with the SEC are available free of charge at https://ir.~~agrify~~rythminc.com/financials-and-filings/sec-filings when ~~such~~ such reports are available on the SEC’s website. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. We periodically provide other ~~information~~ information for investors on our corporate website, www.~~agrify~~rythminc.com, and our investor relations website, ~~investor~~https://ir.~~gnln~~rythminc.com. This includes press releases and other information about financial performance, information on corporate governance and details related to our annual meeting of shareholders. The information contained on the websites referenced in this Form 10-K is not incorporated by reference into this filing. Further, our references to website URLs are intended to be inactive textual references only.

5Item 1A. Risk Factors

~~Item~~Investing 1Ain our Common Stock involves a high degree of risk. ~~Risk~~You ~~Factors~~should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to invest in our Common Stock. The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected. In that event, the market price of our Common Stock could decline, and you could lose part or all of your investment.

~~Investing~~Risks inRelating our Common Stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to ~~invest in~~ our Common Stock. The risks and uncertainties described below may not be the only ones we face. If any of the risks actually occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected. In that event, the market price of our Common Stock could decline, and you could lose part or all of your investment.Industry

~~Risks~~The ~~Related~~2018 toFarm ~~Our~~Bill, ~~Business~~which federally legalized hemp and hemp products, was amended in a way that would severely restrict or prohibit the Company’s hemp-derived THC products.

WeThe ~~have~~2018 Farm Bill, which is the legal basis for the Company’s entry into the hemp-derived THC product market, legally defined hemp as Cannabis Sativa L. containing less than 0.3% delta-9-THC on a ~~relatively~~dry ~~short~~weight ~~operating~~basis, ~~history~~effectively legalizing hemp in the United States. The 2026 Appropriations Act includes a provision (section 781) to amend the definition of hemp in the 2018 Farm Bill to effectively prohibit currently commercialized hemp-derived THC products, including the Company’s products, although the change does not become effective until November 12, 2026. ~~which~~Efforts ~~makes~~are itunderway ~~difficult~~to repeal, replace, or delay this amendment, but whether any change will occur is uncertain. This creates significant uncertainty for our business of selling hemp-derived THC products. It is unclear, for example, if states that have expressly allowed the commercialization of such products will continue to ~~evaluate~~do so in spite of the changes to federal law. If the 365-day grace period expires without a legislative change, it will have a material adverse effect on the Company, including our business, financial condition, and results ~~future~~of ~~prospects~~operations. In that event, the market price of the Company’s common stock could decline.

WeStates ~~have~~are apassing ~~relatively~~their ~~short operating~~own ~~history,~~laws ~~which makes it difficult to evaluate our business and future prospects. We have been in existence since June 2016 and much of our revenue growth occurred during 2021 and 2022~~regulating, ~~with a decrease of revenues noted in 2023 and 2024. In addition~~restricting, ~~we have entered~~or ~~into~~prohibiting ahemp-derived ~~new~~THC ~~line of business following the acquisition of Señorita~~products, ~~which~~creating ~~has~~ a ~~limited~~difficult ~~operating~~regulatory ~~history~~patchwork ~~and~~within ~~have~~which ~~discontinued our Cultivation business. We have encountered, and will continue~~ to ~~encounter, risks and difficulties frequently experienced by growing companies in rapidly changing industries, including those related to:~~operate.

●State ~~market~~and ~~acceptance~~local authorities have been active over the last few years, implementing their own laws regulating the cultivation, manufacturing, testing, marketing, and sale of ~~our~~both ~~current~~intoxicating and non-intoxicating hemp products. Some states ban these products altogether. Other state laws permit hemp-derived THC products but impose new regulatory frameworks containing licensing and labeling requirements, age gates, amount and potency restrictions, allowable types of products, and restrictions on where the products may be sold. The varied state regulatory framework for hemp products poses risks to manufacturing, marketing, selling, and shipping hemp-derived THC products around the country, whether wholesale or direct to consumers via online or brick-and-mortar retail locations. Additionally, hemp legislation is pending at the state level around the country, creating additional risk to the sale and transport of products already produced under existing laws. Unforeseen regulatory obstacles or compliance costs related to state laws may hinder the Company’s ability to successfully compete in some markets for such products. Further, states in which the Company currently sells its hemp-derived THC products could decide in the future to ban these products altogether. If these regulatory changes occur, the revenue streams we expect to receive from our businesses and assets ~~services;~~would be at risk and, as a result, such changes could have a material adverse effect on our business, financial condition, and results of operations.

~~● changing regulatory environments and costs associated with compliance, particularly as related to our operations in the cannabis- and hemp-related sectors;~~6

●Hemp-derived ~~our~~THC ~~ability~~products toare ~~compete~~not ~~with~~permitted under ~~other~~the ~~companies~~Federal ~~offering~~Food, ~~similar~~Drug, ~~products~~ and ~~services;~~Cosmetic Act.

●The ~~our~~Food ~~ability~~and Drug Administration (“FDA”) has taken the position that ingestible products over which it has jurisdiction, including foods, beverages, and dietary supplements, that contain cannabinoids such as THC, including hemp-derived THC, are not permitted under the Federal Food, Drug, and Cosmetic Act (“FDCA”). The FDA has not evaluated THC as a food ingredient, and therefore does not consider it to ~~effectively~~be ~~market~~GRAS ~~our~~(Generally Recognized as Safe) for use in foods, including beverages. The FDA has also found that because THC is in certain drugs approved by the FDA, it is precluded from use in foods/beverages or dietary supplements. The FDA has articulated its intention to focus enforcement on products claiming to prevent, diagnose, mitigate, treat, or cure diseases, and/or ~~services~~manufacturers who target products toward children. The FDA has issued warnings about products that resemble candy or other items appealing to children, emphasizing that such products could pose a risk of unintentional ingestion and ~~attract~~potential ~~new~~harm ~~customers;~~due to the presence of cannabinoids. Thus far, such enforcement has been limited to sending warning letters to a relatively small number of companies. The FDA may decide in the future to increase enforcement activities, regardless of whether a company makes health claims related to its products or markets to children, which could impact the Company’s offering of hemp-derived THC beverages and materially impact operations and revenue.

●The ~~the~~FDA ~~amount~~could ~~and~~issue ~~timing~~new ofregulations ~~operating~~that ~~expenses,~~prohibit ~~particularly~~or ~~sales~~strictly limit ~~and marketing expenses, related to~~ the ~~maintenance~~sale ~~and expansion~~ of ~~our~~hemp-derived ~~business,~~THC ~~operations, and infrastructure;~~products.

●The ~~our~~FDA ~~ability~~has previously declined to ~~control~~issue ~~costs~~regulations for the manufacture and sale of hemp-derived THC products. For example, ~~including~~in ~~operating~~2023, ~~expenses;~~the FDA denied three citizen petitions asking the FDA to conduct rulemaking to allow the marketing of CBD, another hemp-derived cannabinoid, as dietary supplements. In conjunction with these denials, the FDA has publicly stated that a new regulatory pathway should be created by Congress to regulate CBD and other cannabinoid products. The 2026 Appropriations Act directs the FDA to create and maintain lists of allowable and prohibited cannabinoids and promulgate other regulations further defining what items will qualify as a container for purposes of measuring cannabinoid content. The FDA could also decide to change or increase its enforcement of hemp products based on this new directive. New FDA regulations could materially and negatively impact the Company’s operations and revenue. New FDA regulations could also require the Company to make financial investments in additional compliance mechanisms which could impact our profitability and the market price for our Common Stock.

●Other ~~our~~federal ~~ability~~agencies tomay ~~manage~~take ~~organic~~enforcement ~~growth~~actions ~~and~~against companies ~~growth~~selling ~~fueled~~hemp-derived byTHC ~~acquisitions;~~products.

●The ~~public~~Federal ~~perception~~Trade Commission (“FTC”) and ~~acceptance~~FDA frequently collaborate on enforcement where their jurisdictions overlap, particularly in regulating the advertising, labeling, and promotion of ~~cannabis~~food, cosmetics, medical devices, and OTC (over-the-counter) drugs. In the CBD market, the FTC has joined the FDA in issuing warning letters to companies that lacked competent and reliable scientific evidence supporting their advertisements, thereby violating the FTC Act, 15 U.S.C. § 41 et seq. The FTC has also independently issued warning letters to CBD companies for making exaggerated or misleading claims without sufficient scientific backing. While FTC enforcement actions related to CBD were historically limited to warnings, in December 2020, the agency initiated its first formal enforcement action against six CBD companies for allegedly making unsupported health claims, leading to settlement agreements that required those companies to cease such claims and pay monetary judgments. In 2023 and 2024, the FTC sent cease and desist letters to companies marketing hemp-~~related~~derived THC products that it determined appealed to children. Although the Company does not intend to make any unsubstantiated claims regarding its products, the FTC may disagree with our assessment of our claims. The regulatory landscape and ~~services~~potential ~~generally;~~for future FTC enforcement actions could pose an ongoing risk to the Company’s offering of hemp-derived THC products, especially if the Company’s products are targeted by the FTC, or the FTC and FDA together, in the future for any reason.

●Hemp-derived ~~general~~THC ~~economic~~products ~~conditions~~are ~~and~~federally illegal ~~events~~if they exceed 0.3% delta-9-THC on a dry weight basis.

IfHemp-derived weTHC doproducts which ~~not~~exceed ~~manage~~a ~~these risks~~delta-9-THC ~~successfully,~~concentration ~~our~~of ~~business~~0.3% ~~and~~on ~~financial~~a ~~performance~~dry ~~will~~weight bebasis ~~adversely~~are ~~affected~~federally illegal under the Controlled Substances Act (the “CSA”).

WeAny ~~may~~failure ~~require~~by ~~additional~~the ~~financing~~Company or our partners to ~~achieve~~ keep the delta-9-THC in our ~~goals,~~hemp-derived ~~and~~THC products below 0.3% on a ~~failure~~dry weight basis, either in the manufacturing process or in the final product, could subject us to ~~obtain~~action ~~this~~by ~~necessary~~regulatory ~~capital~~authorities ~~when~~and/or ~~needed~~to onlawsuits ~~acceptable~~by ~~terms~~consumers. Certain hemp-derived THC products may, over time, gradually increase their delta-9-THC or attotal ~~all~~THC concentration, and this may ~~force~~ultimately uscause such products to ~~delay,~~exceed ~~limit~~the applicable concentration level, ~~reduce~~making such products illegal in certain jurisdictions. In addition, the approval of medical orand ~~terminate~~recreational ~~our~~marijuana ~~product~~by ~~manufacturing~~many ~~and~~states ~~development,~~has created a situation in which it may be difficult or impossible for regulators and ~~other~~courts to ~~operations~~determine whether the delta-9-THC levels reflected in consumers’ blood tests are the result of hemp-derived THC products or marijuana products. This may result in regulatory actions or lawsuits. If any of these situations occur, we may be subject to regulatory action or lawsuits that could have a material adverse effect on the Company.

At December 31, 2024, we had approximately $31.2 million of cash and cash equivalents. Our operating plan may change because of factors currently unknown to us, and we may need to seek additional funds sooner than planned. Even if we are able to substantially increase revenue and reduce operational expenditures, we may need to raise additional capital, either through borrowings, private offerings, public offerings, or some type of business combination, such as a merger or buyout, and there can be no assurance that we will be successful in such pursuits. Accordingly, if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell one or more lines of business or all or a portion of our assets, enter into a business combination, or reduce or eliminate operations. These possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders or that result in our investors losing all of their investment in our company.7

6The Company is subject to regulations that could impact its ability to sell its product internationally.

IfThe weCompany ~~are~~currently ~~able to raise additional~~sells ~~capital,~~certain weof doits ~~not~~products ~~know~~in ~~what~~Canada ~~the~~and ~~terms~~may ofconduct ~~any~~sales ~~such~~in ~~capital~~other ~~raising~~international ~~would~~markets ~~be.~~in Inthe ~~addition, any~~ future. ~~sale~~Doing ofso ~~our~~would ~~equity~~subject ~~securities~~the ~~would~~Company ~~dilute~~to the ~~ownership~~statutes, ~~and~~regulations, ~~control of investors’ shares~~ and ~~could~~international betreaties atof ~~prices~~the ~~substantially~~countries ~~below~~where ~~prices~~it atoperates ~~which~~or ~~our~~engages ~~shares~~in ~~currently~~ trade. ~~Our~~Failure ~~inability~~ to ~~raise~~adhere ~~capital could require us~~ to existing ~~significantly curtail~~ or ~~terminate~~evolving ~~our~~laws ~~operations.~~in Weany ~~may~~jurisdiction ~~seek~~could tomaterially ~~increase~~impact ~~our cash reserves through~~ the ~~sale~~Company’s ~~of additional equity or debt securities~~business. ~~The~~There ~~sale~~is ofalso ~~convertible~~a ~~debt~~risk ~~securities~~that ~~or additional equity securities~~authorities ~~could result~~ in ~~additional~~these ~~and~~jurisdictions ~~potentially~~may ~~substantial~~determine ~~dilution~~that tothe ~~our~~Company ~~shareholders.~~was ~~The~~or ~~incurrence~~is ofnot ~~indebtedness would result~~ in ~~increased debt~~compliance ~~service~~with ~~obligations~~their ~~and~~laws. ~~could~~If ~~result~~its inpast ~~operating~~or ~~and~~present ~~financing~~activities are ~~covenants~~found ~~that~~to ~~would~~violate ~~restrict~~such ~~our operations and liquidity~~laws, ~~and~~the ~~ability to~~Company ~~pay~~could ~~dividends.~~face Inenforcement ~~addition~~actions, ~~our~~including ~~ability~~civil toor ~~obtain~~criminal ~~additional~~penalties, ~~capital~~fines, ondamages, ~~acceptable terms is subject to a variety of uncertainties.~~operational Werestrictions ~~cannot assure you that financing will be available in amounts~~ or onrestructuring, ~~terms~~asset ~~acceptable to us~~seizures, ifand atthe ~~all.~~denial ~~Any~~of ~~failure~~regulatory ~~to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition~~approvals.

WeThird ~~face~~parties ~~risks~~with ~~associated~~whom we do business may perceive themselves as being exposed to reputational, and even legal, risk because of their relationship with ~~strategic~~us due to our hemp- ~~acquisitions~~and limited cannabis-related licensing activities and may, as a result, refuse to do business with us.

~~Since~~The ~~our~~third ~~inception,~~parties wewith ~~have~~whom ~~strategically~~we ~~acquired~~do ~~several~~business ~~businesses,~~may ~~and~~perceive ~~plan~~that tothey ~~continue~~are exposed to ~~make~~reputational, ~~strategic~~or ~~acquisitions~~possibly even legal, ~~some~~risk because of ~~which~~our ~~may~~hemp- beor ~~material~~limited cannabis-related business activities. ~~These~~Any ~~acquisitions~~third-party service provider or customer could suspend or withdraw its business if it perceives that the potential ~~may~~risks ~~involve~~exceed athe ~~number~~potential benefits of ~~financial,~~doing ~~accounting,~~business ~~managerial,~~with ~~operational,~~us. ~~legal~~Specifically, ~~compliance,~~while we have banking relationships and believe that the services we rely on can be procured from other ~~risks~~institutions, ~~and~~we ~~challenges~~may, ~~including~~in the ~~following~~ future, ~~any~~have ofdifficulty ~~which~~maintaining existing or securing new bank accounts or clearing services. Our failure to establish or maintain business relationships could ~~adversely~~have ~~affect~~a material adverse effect on our business, financial condition, and results of operations:.

●We ~~any~~face ~~acquired~~competition ~~business~~from ~~could under-perform relative to our expectations and~~ the ~~price~~illicit ~~that~~market weas ~~paid~~well ~~for~~as ~~it,~~larger competitors orand ~~not~~licensed ~~perform~~medical inand ~~accordance~~adult-use ~~with~~cannabis ~~its anticipated timetable;~~dispensaries.

●The weU.S. cannabis and hemp industries are, and are expected to continue to be, competitive. A number of other companies engage in, and may ~~incur~~in the future engage in, cannabis or ~~assume~~hemp-related ~~significant~~businesses, ~~debt~~operate businesses in ~~connection~~competition with ~~our~~us, ~~acquisitions;~~and purchase businesses and assets or make investments that we will also seek to purchase or make. We face and expect to continue to face competition from state-licensed medical and adult-use dispensaries as well as the illicit market. Additionally, if the Attorney General reschedules cannabis to Schedule III, competition from state-licensed cannabis companies could intensify as the industry becomes more normalized.

●Large ~~acquisitions~~chain ~~could~~stores, ~~cause~~manufacturers, retailers, ~~our~~and ~~results~~beverage ofand ~~operations~~other toconsumer ~~differ~~products ~~from~~companies ~~our~~that ~~own~~also orrecognize the potential for financial success through acquisitions and investment ~~community’s~~in ~~expectations~~the hemp-derived THC industry could strategically acquire competitors or invest in ~~any~~creating ~~given~~their ~~period~~own brands. In doing so, orthese ~~over~~larger competitors could produce and sell competing products at a lower price and establish a larger brand presence than we have. We may lack the ~~long~~personnel, ~~term;~~products, marketing, and distribution capabilities, and/or financial resources to compete effectively against such larger competitors.

●We ~~acquisitions~~also ~~could~~face ~~create~~competition from ~~demands~~the onillicit ~~our~~market ~~management~~and illegal dispensaries and cultivation operations that ~~they~~are ~~may~~unlicensed, benot ~~unable~~regulated and that are selling cannabis or hemp-derived products. Any inability or unwillingness of law enforcement authorities to ~~effectively~~enforce ~~address,~~existing laws prohibiting the unlicensed production and sale of cannabis or hemp-derived products could result in increased competition for ~~which~~us. weAdditionally, illicit products may ~~incur~~be ~~additional~~unsafe, ~~costs~~and negative press caused by such products could impact the reputation of our products with consumers who may not distinguish between responsible suppliers like the Company and illicit operators. Any or all these events could have a material adverse effect on our business, financial condition, and results of operations.

~~Additionally, following any business acquisition, we could experience difficulty in integrating personnel, operations, financial and other systems, and in retaining key employees and customers.~~8

WeInconsistent ~~may~~public ~~record~~opinion ~~goodwill~~ and ~~other~~ ~~intangible~~perception ~~assets~~of onthe ~~our~~cannabis ~~consolidated~~and hemp ~~balance~~industries ~~sheet~~may inhinder ~~connection~~market ~~with~~growth ~~our~~and ~~acquisitions.~~state Ifregulation, wewhich ~~are~~would ~~not~~adversely ~~able~~impact toour ~~realize~~growth ~~the~~plans ~~value of~~and ~~these~~current ~~assets,~~operations weand result ~~may~~in bean ~~required~~adverse toeffect ~~incur~~on ~~charges~~our ~~relating~~business, tofinancial ~~the impairment of these assets~~condition, ~~which~~and ~~could materially impact our~~ results of operations.

~~There~~Public ~~can~~opinion beand nosupport ~~assurance~~for ~~that~~cannabis ~~our~~and ~~current~~hemp-derived THC products has traditionally been inconsistent and ~~future~~varies ~~strategic~~from ~~alliances~~state orto ~~expansions~~state. While public opinion and support has historically been increasing in the U.S. for legalizing cannabis and for continued access to hemp-derived THC products, opposition to legalization remains, and the support could diminish. Inconsistent public opinion and perception of ~~scope~~cannabis and hemp hinder growth of ~~existing~~the ~~relationships~~hemp ~~will~~industry, which could have a ~~beneficial~~material ~~impact~~adverse effect on our business plans, financial condition, and results of operations.

WeConsumer ~~currently~~perception ~~have,~~of ~~and~~our products may in ~~the~~be ~~future~~significantly ~~enter~~influenced ~~into~~by scientific research or findings, ~~additional~~regulatory ~~strategic~~investigations, ~~alliances~~litigation, ~~with~~media ~~third~~attention, and ~~parties~~other ~~that~~publicity weregarding ~~believe~~the ~~will~~consumption ~~complement~~of orcannabis ~~augment~~and ~~our~~hemp-derived ~~existing~~THC ~~business~~products. In ~~particular,~~There wecan ~~currently~~be ~~rely~~no onassurance ~~Green~~that ~~Thumb~~future ~~for~~scientific research ~~significant~~and ~~legal~~findings, ~~accounting~~regulatory ~~and~~proceedings, ~~operational~~litigation, ~~support~~media ~~through~~attention, aor ~~shared~~other ~~services~~research ~~agreement. Our~~findings ~~ability~~or topublicity ~~complete~~will ~~strategic~~be ~~alliances~~favorable to isthe ~~dependent~~cannabis ~~upon,~~or ~~and~~hemp ~~may~~markets beor ~~limited~~any byparticular product, ~~the~~or ~~availability~~consistent ofwith ~~suitable~~earlier ~~candidates~~publicity. ~~and~~Future ~~capital. In~~research ~~addition~~reports, ~~strategic~~findings, ~~alliances~~regulatory proceedings, ~~could~~litigation, ~~present~~media ~~unforeseen~~attention, ~~integration~~or ~~obstacles~~other orpublicity ~~costs,~~that ~~may~~is ~~not~~perceived ~~enhance~~as ~~our~~less ~~business~~favorable ~~and~~than, ~~may~~or ~~involve risks~~questions ~~that~~earlier ~~could~~research reports, ~~adversely~~findings, ~~affect~~or uspublicity, ~~including~~could ~~significant~~have ~~amounts~~a ofmaterial ~~management~~adverse ~~time~~effect ~~that~~on ~~may~~the bedemand ~~diverted~~for ~~from~~our ~~operations~~products. inOur ~~order~~dependence ~~to pursue~~upon ~~and~~consumer ~~complete~~perceptions means that such ~~transactions~~adverse orreports, ~~maintain~~whether ~~such~~or ~~strategic~~not ~~alliances.~~accurate ~~Future~~or ~~strategic~~with ~~alliances~~merit, could ~~result~~ultimately inhave ~~the~~a ~~incurrence of~~material ~~additional~~adverse ~~debt~~effect on our business, results ~~costs~~of ~~and~~operations, ~~contingent~~financial ~~liabilities~~condition, and ~~there~~cash ~~can~~flows. beFurther, noadverse ~~assurance~~publicity ~~that~~reports ~~future~~or ~~strategic~~other ~~alliances~~media ~~will~~attention ~~achieve~~regarding the safety, orefficacy, ~~that our~~and ~~existing~~quality ~~strategic~~of ~~alliances~~hemp-derived ~~will~~THC ~~continue~~products toin ~~achieve~~general, ~~the~~or ~~expected~~our ~~benefits~~products tospecifically, ~~our~~or ~~business~~associating orthe ~~that~~consumption weof cannabis ~~will~~or behemp-derived ~~able~~THC toproducts ~~consummate future~~with ~~strategic~~illness ~~alliances~~or onother ~~satisfactory~~negative ~~terms~~effects or events, ifcould athave ~~all.~~a ~~Termination~~material ofadverse ~~any~~effect. ~~strategic~~A ~~alliances,~~failure or ~~including~~alleged ~~our~~failure ~~shared~~of ~~services~~quality ~~agreement with~~control ~~Green~~processes ~~Thumb,~~and procedures could ~~significantly~~result ~~disrupt~~in negative consumer perception of our ~~business~~products or legal claims against us. ~~Any~~Adverse ofpublicity ~~the~~reports ~~foregoing~~or other media attention could ~~have~~arise aeven ~~material~~if the adverse ~~effect~~effects onassociated ~~our~~with ~~business,~~such products ~~financial~~resulted ~~condition~~from ~~and~~consumers’ ~~results~~failure ofto ~~operations~~consume such products appropriately or as directed.

7Hemp-derived THC products may be shown to have negative health and/or safety impacts upon consumers.

~~Past~~The health and ~~potential~~safety ~~future~~impacts of ~~divestitures~~hemp-derived THC products have not yet been established via traditional scientific and/or clinical studies. The FDA appears to believe ~~other~~that ~~transactions~~certain ~~could~~CBD ~~adversely~~products ~~affect~~may ~~our~~have ~~costs~~significant adverse health impacts upon human beings, ~~revenues~~especially in regard to potential liver toxicity or liver damage. If the FDA, ~~profitability~~scientific research and/or ~~financial~~clinical ~~position~~studies ultimately demonstrate negative health and/or safety impacts of cannabis or hemp-derived THC products on consumers, our business and the trading price of our Common Stock could be materially adversely affected.

InWe ~~order~~face torisks ~~position~~due ~~our business~~ to ~~take~~industry ~~advantage of particular future growth opportunities and/or consolidate our more capable businesses, we have in the past and may~~immaturity ~~in the future pursue a strategy of focusing on one~~ or ~~more~~limited ~~specialized facets of our products and services. These actions may require that we abandon or divest certain assets or businesses that no longer fit within our evolving strategic direction~~comparable, ~~as we did with the sale of our cultivation business. Abandoning or divesting certain assets or businesses may entail engaging in discussions~~competitive, evaluating opportunities and entering into agreements, potentially resulting in transactions involving significant risks and uncertainties that could adversely affect our business, results of operations and financial condition. We may not be able to find potential buyers on favorable terms, we may experience disruption to our business and/or weestablished ~~may~~industry ~~divert~~best ~~management attention from other business concerns, lose key employees and possibly retain certain liabilities related to these potential transactions~~practices.

WeBecause ~~have~~the ~~substantial~~hemp-derived THC ~~debt~~industry ~~and~~is ~~other financial obligations~~new, ~~and~~there weare ~~may~~relatively ~~incur~~few ~~even~~operators ~~more~~in ~~debt.~~the ~~Any~~industry ~~failure~~whose tobusiness ~~meet~~models ~~our~~we ~~debt~~can ~~and~~follow ~~other~~or ~~financial~~build ~~obligations~~upon. Similarly, there is no or ~~maintain~~limited ~~compliance~~information ~~with related~~about ~~covenants~~comparable ~~could~~companies ~~harm~~available ~~our~~for ~~business,~~potential ~~financial~~investors ~~condition,~~to ~~and~~review ~~results~~in ofmaking ~~operations~~a decision about whether to invest in us.

OnShareholders ~~November~~and 5investors should consider, ~~2024~~among other factors, weour ~~issued~~prospects ~~the~~for ~~Note~~success toin light of the ~~Investor,~~risks aand ~~subsidiary~~uncertainties encountered by companies, like ofus, ~~Green~~that ~~Thumb~~are ~~for~~in uptheir toearly ~~$20~~stages.0 ~~million~~For inexample, ~~original~~unanticipated ~~principal~~expenses ~~amount,~~and ofproblems ~~which~~or ~~$10.0~~technical ~~million~~difficulties ~~has~~may ~~been~~occur, ~~loaned~~which bymay result in material delays in the ~~Investor~~operation toof ~~date~~our business. ~~The Note~~We ismay afail ~~secured~~to ~~obligation~~successfully ~~and~~address ~~ranks~~these ~~senior~~risks toand ~~all~~uncertainties ofor successfully implement our ~~current~~operating ~~indebtedness~~strategies. ~~The~~If ~~Note~~we ~~will~~fail ~~mature~~to ondo ~~November 5~~so, ~~2025~~it ~~and~~could ~~accrues~~materially harm our business to the point of having to cease operations ~~interest~~and atcould aimpair ~~rate~~the value of ~~10%~~our ~~per~~Common ~~annum~~Stock to the extent that investors may lose their entire investment.

The ~~Note~~cannabis ~~imposes certain customary affirmative~~ and ~~negative~~hemp ~~covenants~~industries ~~upon~~could face ~~us,~~strong asopposition ~~well as covenants that restrict us and our subsidiaries~~ from ~~incurring any additional indebtedness or suffering any liens, subject to specified exceptions, and restrict the declaration of any dividends or~~ other ~~distributions, subject to specified exceptions~~industries.

IfWe webelieve ~~are~~that ~~not~~established businesses in ~~compliance~~other ~~with~~industries ~~certain~~may ofperceive ~~these~~strong ~~covenants,~~economic interests in ~~addition~~opposing tothe ~~other~~development ~~actions~~ of the ~~Investor~~cannabis and hemp industries. Cannabis and hemp may ~~require,~~be ~~the~~seen ~~amounts~~by ~~outstanding~~companies ~~under~~in ~~the~~other ~~Note~~industries ~~may~~as ~~become~~an ~~immediately~~attractive ~~due~~alternative ~~and~~to ~~payable.~~their ~~This~~products, ~~immediate~~such ~~payment~~as ~~may~~alcohol, ~~negatively~~and as ~~impact~~an ~~our~~alternative ~~financial~~to ~~condition.~~various Incommercial ~~addition,~~pharmaceuticals. ~~any~~Many ~~failure~~industries tothat ~~make~~could ~~scheduled~~view ~~payments~~the ofemerging ~~interest~~cannabis and ~~principal~~hemp onindustries ~~our~~as ~~outstanding indebtedness~~economic ~~would~~threats ~~likely~~are ~~harm~~well ~~our~~established, ~~ability~~with tovast ~~incur~~economic ~~additional~~and ~~indebtedness~~federal onand ~~acceptable~~state ~~terms~~lobbying resources. ~~Our~~It ~~cash~~is ~~flow~~reported ~~and~~that ~~capital~~companies ~~resources~~within these industries may behave ~~insufficient to~~played ~~pay~~a ~~interest~~role ~~and~~in ~~principal~~the onrecent ~~our~~federal ~~debt~~legislation into reverse the ~~future.~~2018 IfFarm ~~that~~Bill’s ~~should~~legalization ~~occur~~of certain hemp products, ~~our~~and ~~capital~~it ~~raising~~is orpossible ~~debt~~these ~~restructuring~~industries ~~measures~~play ~~may be~~similar ~~unsuccessful~~roles in anti-cannabis efforts. Any inroads these companies make in halting or ~~inadequate~~impeding tolegislative ~~meet~~initiatives ~~our~~that ~~scheduled~~would ~~debt~~be ~~service~~beneficial ~~obligations,~~to ~~which~~the cannabis and hemp industries could ~~cause~~have usa todetrimental ~~default~~impact on some of our ~~obligations~~customers and, ~~further impair~~in turn, on our ~~liquidity~~operations.

Our ability to make scheduled payments on our debt and other financial obligations depends on our financial and operating performance. Our financial and operating performance will continue to be subject to prevailing economic conditions and to financial, business, and other factors, some of which are beyond our control. Failure within any applicable grace or cure periods to make such payments, or comply with any covenant, would create a default under the Notes. Our cash flow and existing capital resources may be insufficient to repay our debt at maturity, in which case we would have to extend such maturity date, or otherwise repay, refinance, and/or restructure the obligations under the Note, including with proceeds from the sale of assets, and additional equity or debt capital. If we are unsuccessful in obtaining such extension, or entering into such repayment, refinance, or restructure prior to maturity, or any other default existed under the Note, the Investor could accelerate the indebtedness under the Note, foreclose against its collateral, or seek other remedies, which would jeopardize our ability to continue our current operations.9

8Our business depends in part on our customers obtaining and/or maintaining appropriate licensing.

WeOur ~~are~~business ~~dependent~~is partly dependent on ~~key~~certain ~~inputs~~of our customers obtaining various licenses from various municipalities and ~~suppliers;~~state licensing agencies. There can be no assurance ~~and~~that ~~fluctuations~~any inor ~~the~~all ~~cost~~licenses necessary for our customers to operate their businesses will be obtained, retained, or ~~availability~~renewed. ofIf ~~materials~~a welicensing body ~~use~~were into ~~our~~determine ~~products~~that a customer of ours had violated applicable rules and ~~supply~~regulations, ~~chain~~there is a risk the license granted to that customer could ~~negatively~~be revoked, which could adversely affect our ~~results~~revenue streams from such clients. There can be no assurance that our existing customers will be able to retain their licenses going forward, or that the Company would be able to acquire new customers to sell its products in those markets.

~~Our~~We ~~business~~face isrisks ~~dependent on a number of key inputs and their~~ related costs, including raw materials, parts and supplies. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs could materially impact our business, financial condition, results of operations or prospects. Some of these inputs may only be available from a single supplier or a limited group of suppliers, or be sourced abroad. If a sole source supplier was to go out of business, we might be unable to find a replacement for such source in a timely manner, or at all. If a sole source supplier were to be acquired by a competitor, that competitor may elect not to sell to us in the future. Manufacturing delays or unexpected transportation delays, particularly from materials we source abroad, can also cause us to incur significantly increased costs. Any of these fluctuations may increase our ~~cost of products and have an adverse effect on our~~insurance ~~profit~~coverage ~~margins, results of operations~~ and ~~financial~~uninsurable ~~condition~~risks. Any inability to secure required supplies and services, or to do so on appropriate terms, could have a materially adverse impact on our business, prospects, revenue, results of operations and financial condition.

Our ~~sales~~business ~~are~~is ~~difficult~~subject to a number of risks and hazards generally, including adverse environmental conditions, accidents, labor disputes, and changes in the regulatory environment. Such occurrences could result in damage to ~~forecast~~assets, personal injury or death, environmental damage, delays in operations, monetary losses, and possible legal liability.

~~Market~~Although ~~data~~we ~~for~~intend ~~the~~to ~~industries~~continue to maintain insurance to protect against certain risks in ~~which~~such amounts as we ~~operate~~consider isto ~~limited~~be ~~and~~reasonable, ~~unreliable.~~our Weinsurance ~~must~~will ~~rely~~not cover ~~largely~~all onthe ~~our~~potential ~~own~~risks ~~market~~associated ~~research~~with toour ~~forecast~~operations. ~~sales,~~We asmay ~~detailed~~also ~~forecasts~~be ~~are~~unable ~~not~~to ~~generally~~maintain ~~obtainable~~insurance ~~from~~to ~~other~~cover ~~sources.~~these ~~Additionally, any~~risks ~~market~~at ~~research~~economically feasible ~~and~~premiums, ~~our~~particularly ~~projections~~given ofchanges ~~estimated~~to ~~total~~federal ~~retail~~law ~~sales,~~under ~~demographics,~~the ~~demand~~2026 ~~and~~Appropriations ~~similar~~Act. ~~consumer~~Insurance ~~research,~~coverage ~~are~~may ~~based on~~cease ~~assumptions~~to ~~from~~be ~~limited~~available or ~~and~~may ~~unreliable~~not ~~market~~be ~~data~~adequate ~~and~~to acover ~~rapidly~~any ~~evolving~~resulting ~~market~~liability. AMoreover, ~~failure~~insurance inagainst ~~the~~certain ~~demand~~hazards ~~for~~encountered in our ~~products~~operations ~~to materialize~~may asnot abe ~~result~~generally ofavailable ~~competition,~~on ~~technological~~acceptable ~~change,~~terms. ~~failure~~We ofmight ~~states~~also become subject to ~~enforce~~liability ~~regulations,~~for ~~state~~pollution or ~~federal~~other ~~adoption~~hazards ofwhich ~~new~~we ~~regulations~~may not be insured against or ~~enforcement~~which ofwe ~~regulations~~may ~~previously~~elect not ~~enforced,~~to insure against because of premium costs or other ~~factors~~reasons. Losses from these events may cause us to incur significant costs that could have a material adverse effect onupon our ~~business,~~financial ~~results of~~performance ~~operations~~ and ~~financial~~results ~~condition~~of operations.

We ~~may~~participate bein ~~subject~~an toevolving ~~growth-related~~and ~~risks~~volatile industry.

WeThe ~~may~~hemp industry is still new, and many aspects of the industry’s development and evolution cannot be ~~subject~~accurately predicted. While we have attempted to ~~growth-related~~identify many risks, ~~including~~specific ~~capacity~~to ~~constraints~~the ~~and~~hemp ~~pressure~~industry, onyou ~~our~~should ~~internal~~carefully ~~systems~~consider ~~and~~that ~~controls.~~there ~~Our~~are ~~ability~~other torisks ~~manage~~that ~~growth~~cannot ~~effectively~~be ~~will~~foreseen or are not ~~require~~described usin tothis ~~continue~~report, towhich ~~implement~~could materially and ~~improve~~adversely affect our ~~operational~~business and financial ~~systems~~performance. ~~and~~We toexpect ~~expand,~~that ~~train~~the hemp and ~~manage~~cannabis markets and our ~~employees~~business ~~and contractors.~~will ~~Our~~continue ~~inability~~to evolve in ways that are difficult to ~~deal~~predict. ~~with~~Our ~~this~~long-term ~~growth~~success may ~~have~~depend on aour ~~material~~ability ~~adverse~~to ~~effect~~successfully onadjust our ~~business,~~strategy ~~prospects,~~to ~~revenue,~~meet ~~results~~the ofchanging market dynamics. If we are unable to successfully adapt to changes ~~operation~~in the hemp and ~~financial~~cannabis ~~condition~~industries, our operations could be adversely affected.

WeBanking ~~rely~~regulations oncould ~~third~~limit ~~parties for certain products~~access ~~sold~~ to ~~our~~banking ~~customers, which could limit our control over the quality of the products~~services.

~~The~~Since ~~products~~the ~~sold~~use byof ~~our~~cannabis ~~Señorita~~is ~~business~~illegal ~~are~~under cofederal law, and hemp-~~manufactured~~derived byTHC ~~third~~may ~~parties.~~become Weillegal dounder ~~not~~the ~~typically~~2026 ~~have~~Appropriations ~~any~~Act, ~~direct~~there ~~control~~may ~~over~~be ~~these~~a ~~third-party~~compelling ~~co-manufacturers.~~argument ~~These~~that ~~third-party~~banks ~~co-manufacturers~~cannot ~~could~~lawfully ~~experience~~accept ~~quality~~or ~~control~~deposit ~~issues~~funds from businesses involved with cannabis, ~~equipment~~or, ~~problems~~after November 12, ~~data~~2026, ~~loss~~hemp-derived THC. Consequently, ~~and~~businesses ~~other~~involved ~~events~~in ~~relating~~the to cannabis industry often have, and the ~~products~~hemp ~~they~~industry ~~produce~~may ~~that~~have, ~~could~~trouble ~~impact~~finding ~~the~~a ~~quality~~bank ofwilling to ~~those~~accept ~~products~~their business. ~~Should~~The ~~the~~inability ~~third-party~~to ~~co-manufacturers~~open webank ~~rely~~accounts ~~upon~~may ~~not~~make ~~deliver at~~it ~~standards~~difficult wefor ~~expect~~some of our customers or licensees to operate and ~~desire,~~their ~~acceptance~~reliance ofon ~~our~~cash ~~products~~can ~~could~~result ~~suffer~~in a heightened risk of theft, which ~~would~~could ~~have~~harm antheir ~~adverse~~businesses ~~effect~~and, onin turn, harm our business. Although the proposal of the Secure and ~~financial~~Fair Enforcement Regulation Banking Act, also referred to as the SAFER Banking Act, would allow ~~performance.~~banks ~~Further~~to work with cannabis businesses and prevent federal banking regulators from intervening or punishing those banks, wethe ~~cannot~~legislation still berequires ~~assured~~the approval of ~~entering~~the ~~into~~U.S. ~~agreements~~House ~~with~~and ~~such~~Senate. ~~third-party~~There ~~co-manufacturers~~can onbe ~~economically~~no ~~favorable~~assurance that the SAFER Banking Act or any similar legislation ~~terms~~will become law in the U.S.

~~We face an inherent risk of product liability and similar claims.~~10

AsRisks aRelated ~~producer and distributor of products designed~~ to beOur ingested by humans, we face an inherent risk of exposure to product liability claims, regulatory action and litigation if our products are alleged to have failed to meet expected standards or to have caused significant loss or injury. In addition, the sale of our products involves the risk of injury to consumers due to tampering by unauthorized third parties or product contamination. Previously unknown adverse reactions resulting from human consumption of our products alone or in combination with other medications or substances could occur. We may be subject to various product liability claims, including, among others, that our products caused injury, illness or death, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with other substances. As an agricultural product, the quality of hemp is inherently variable, and consumers may raise claims that our quality control or labeling processes have not sufficiently ensured that our grown and manufactured processes are sufficient to meet expected standards. A product liability claim or regulatory action against us could result in increased costs, could adversely affect our reputation with our clients and consumers generally and could have a material adverse effect on our business, results of operations and financial condition. There can be no assurances that we will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the future on acceptable terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our potential products.Business

9We have a relatively short operating history, which makes it difficult to evaluate our business and future prospects.

~~Our~~We ~~products~~have a relatively limited operating history, which may bemake ~~subject~~it difficult to ~~product~~evaluate ~~recalls~~our business and future prospects. Although we were formed in June 2016, we have since discontinued our cultivation and extraction operations and have recently entered new lines of business, including the development and commercialization of hemp-derived THC products and the licensing of consumer packaged goods brands. These newer business lines have a limited operating history, which increases the uncertainty associated with assessing our performance and future results. We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly changing industries, including those related to:

~~Manufacturers,~~● ~~distributors and~~market ~~retailers~~acceptance of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labeling disclosure. If any of our ~~products~~current ~~or products sold at our retail stores are recalled due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall~~ and ~~any~~future legal proceedings that might arise in connection with the recall. We may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin, if at all. In addition, a product recall may require significant management attention. There can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. Additionally, if any of our brands were subject to recall, our image and the image of that brand could be harmed. A recall for any of the foregoing reasons could lead to decreased demand for our products and could have a material adverse effect on the results of our operations and financial condition. Additionally, product recalls may lead to increased scrutiny of our operations by the FDA, or other regulatory agencies, requiring further management attention and potential legal fees and other expenses.services;

~~The~~● ~~growth~~changing ~~and~~regulatory ~~success~~environments ofand ~~our~~costs ~~business~~associated ~~depends on~~with ~~the continued contributions of personnel employed by Green Thumb~~compliance, particularly as ~~well~~related asto our ~~ability~~operations toin ~~attract~~the cannabis- and ~~retain~~hemp-related ~~qualified personnel.~~sectors;

~~Our~~● ~~growth and success are dependent upon the continued contributions made by~~ our ~~Chairman~~ability ofto ~~the~~compete ~~Board~~with ~~and Interim Chief Executive Officer, Benjamin Kovler, and by~~ other ~~individuals~~companies ~~who~~offering ~~are~~similar employees of Green Thumb and who provide services to us under a shared services agreement. We rely on Mr. Kovler’s expertise in business operations and the cannabis and hemp industries when we are developing or acquiring new products ~~and~~ services. If Mr. Kovler cannot serve us or is no longer willing to do so, or if Green Thumb no longer provides personnel support to us under the shared services agreement, we may not be able to find alternatives in a timely manner or at all. This may have a material adverse effect on our business. In addition, our growth and success will depend to a significant extent on our ability to identify, attract, hire, train and retain qualified professional, creative, technical and managerial personnel. Competition for experience and qualified talent can be intense. We may not be successful in identifying, attracting, hiring, training and retaining such personnel in the future. If we are unable to hire, assimilate and retain qualified personnel in the future, such inability could adversely affect our operations.services;

We● ~~rely on third parties, including~~ our ~~largest~~ ~~shareholder,~~ability to ~~provide~~effectively ~~numerous~~market ~~capabilities~~our ~~that~~products weand ~~depend~~services ~~upon on to operate,~~ and aattract ~~disruption~~new ~~of these systems could adversely affect our business.~~customers;

We● ~~are~~the ~~dependent~~amount ~~on vendors~~ and ~~third-party~~timing ~~providers, including the services~~ of ~~the~~operating ~~employees of~~expenses, ~~Green~~particularly ~~Thumb,~~sales ~~our~~and ~~largest~~marketing ~~shareholder~~expenses, ~~under~~related ~~shared services agreements. A serious disruption~~ to ~~any of these could significantly limit our ability to serve our customers. The failure of one or more such providers to provide~~ the ~~expected~~maintenance ~~services, provide them on a timely basis or provide them at the prices we expect, or otherwise meet our performance standards~~ and ~~expectations~~expansion ~~(including~~of ~~with respect to data security, compliance and data privacy and protection laws) may adversely affect~~ our business~~. Further~~, ~~if we found it necessary to replace any such service provider~~operations, disruptions arising from the transition of functions to an alternative provider, or the costs developing our own functions if we were unable to find an alternate provider, may have a material adverse effect on our results of operations or financial condition. Any disruption could cause adversely impact our results of operations and ~~the trading price of our Common Stock.~~infrastructure;

10● our ability to control costs, including operating expenses;

~~Protecting~~● ~~and~~our ~~defending~~ability ~~against~~to ~~intellectual property~~manage ~~claims~~organic ~~may~~growth ~~have~~and agrowth ~~material~~fueled ~~adverse~~by ~~effect on our business.~~acquisitions;

~~Our~~● ~~ability~~public toperception ~~compete~~and ~~depends, in~~acceptance ~~part, upon the successful protection~~ of ~~our~~cannabis- ~~intellectual property relating to our Señorita product line~~ and ~~our~~hemp-related ~~extraction~~ products~~. We~~ ~~seek to protect our proprietary~~ and ~~intellectual~~services ~~property~~generally; ~~rights through patent applications, common law copyright~~ and trademark laws, nondisclosure agreements, and non-disclosure provisions within our licensing and distribution arrangements with reputable companies in our target markets. Enforcement of our intellectual property rights would be costly, and there can be no assurance that we will have the resources to undertake all necessary action to protect our intellectual property rights or that we will be successful. Any infringement of our material intellectual property rights could require us to redirect resources to actions necessary to protect same and could distract management from our underlying business operations. An infringement of our material intellectual property rights and resulting actions could adversely affect our operations.

It● isgeneral ~~possible~~economic ~~that,~~conditions for any of our patents that may issue in the future, our competitors may design their products around our patented technologies. Further, we cannot assure shareholders that other parties will not challenge any patents granted to us, or that courts or regulatory agencies will hold our patents to be valid, enforceable, and~~/or~~ ~~infringed~~events. We cannot guarantee shareholders that we will be successful in defending challenges made against our patents and patent applications. Any successful third-party challenge or challenges to our patents could result in the unenforceability or invalidity of such patents, or such patents being interpreted narrowly and/or in a manner adverse to our interests. Our ability to establish or maintain a technological or competitive advantage over our competitors and/or market entrants may be diminished because of these uncertainties. For these and other reasons, our intellectual property may not provide us with any competitive advantage.

ToIf ~~the extent our intellectual property offers inadequate protection, or is found to be invalid or unenforceable,~~ we ~~would~~do benot ~~exposed~~manage tothese arisks ~~greater risk of direct or~~successfully, ~~indirect competition. If~~ our ~~intellectual~~business ~~property~~and ~~does~~financial ~~not~~performance ~~provide~~will ~~adequate coverage over our competitors’ products, our competitive position could~~ be adversely affected~~, as could our business~~.

~~Our~~We ~~success~~may ~~depends~~require inadditional financing ~~part~~to ~~upon~~achieve our ~~ability~~goals, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, may force us to ~~protect~~delay, limit, reduce, or terminate our ~~core~~product ~~technology~~manufacturing and ~~intellectual~~development, ~~property~~and other operations.

~~Our~~As ~~success~~of ~~depends~~December in31, ~~part upon~~2025, ~~our~~we ~~ability~~had toapproximately ~~protect~~$32.2 ~~our~~million ~~core~~of ~~technology~~ cash and ~~intellectual~~cash ~~property~~equivalents. ToOur ~~establish~~operating ~~and~~plan ~~protect~~may ~~our~~change ~~proprietary~~because ~~rights,~~of wefactors ~~rely~~currently ~~on a~~unknown ~~combination~~to ~~of trademark~~us, ~~copyright,~~and ~~patent,~~we ~~trade~~may ~~secret~~need ~~and~~to ~~unfair~~seek ~~competition~~additional ~~laws~~funds sooner ofthan ~~the U~~planned.S. ~~and~~Even ~~other~~if ~~countries,~~we asare ~~well~~able asto ~~contract provisions,~~substantially ~~license~~increase ~~agreements,~~revenue ~~confidentiality~~and ~~procedures~~reduce operational expenditures, ~~non-disclosure~~we ~~agreements~~may ~~with~~need ~~third~~to ~~parties~~raise additional capital, ~~employee~~either ~~disclosure~~through ~~and~~borrowings, ~~invention assignment~~private ~~agreements~~offerings, ~~and~~public ~~other~~offerings, ~~contractual~~or ~~rights,~~some astype ~~well~~of asbusiness ~~procedures~~combination, ~~governing~~such ~~internet/domain~~as ~~name~~a ~~registrations.~~merger ~~However~~or buyout, and there can be no assurance that ~~these~~we ~~measures~~ will be successful in ~~any~~such ~~given case~~pursuits. WeAccordingly, ~~may~~if bewe are unable to ~~prevent~~generate ~~the~~adequate ~~misappropriation,~~cash ~~infringement~~from oroperations, ~~violation~~and ofif ~~our~~we ~~intellectual~~are ~~property~~unable ~~rights,~~to ~~breach~~find sources of ~~any~~funding, ~~contractual~~it ~~obligations~~may tobe necessary for us, to sell one or ~~independent~~more ~~development~~lines of ~~intellectual property~~business ~~that~~or isall ~~similar~~or a toportion ~~ours~~of our assets, ~~any~~enter ofinto ~~which~~a ~~could~~business combination, or reduce or eliminate ~~any~~operations. ~~competitive~~These ~~advantage~~possibilities, weto ~~have~~the ~~developed~~extent available, may ~~adversely~~be ~~affecting~~ on terms that result in significant dilution to our ~~revenues~~shareholders or ~~otherwise~~that ~~harming~~result in our ~~business~~investors losing all of their investment in our company.

WeIf ~~generally~~we ~~control~~are ~~access~~ able to ~~and~~raise additional ~~use~~capital, we do not know what the terms of any such capital raising would be. In addition, any future sale of our ~~proprietary~~equity ~~technology~~securities would dilute the ownership and ~~other~~control ~~confidential~~of ~~information~~investors’ ~~through~~shares and could be at prices substantially below prices at which our shares currently trade. Our inability to raise capital could require us to significantly curtail or terminate our operations. We may seek to increase our cash reserves through the ~~use~~sale of ~~internal~~additional equity or debt securities. The sale of convertible debt securities or additional equity securities could result in additional and ~~external~~potentially ~~controls,~~substantial ~~including~~dilution to our shareholders. The incurrence of indebtedness would result in increased debt ~~contractual~~service ~~protections~~obligations ~~with~~and ~~employees,~~could ~~contractors,~~result ~~customers,~~in operating and ~~partners~~financing covenants that would restrict our operations and liquidity, and ability to pay dividends. In addition, our ~~software~~ability to obtain additional capital on acceptable terms is ~~protected~~subject byto Ua variety of uncertainties.S We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all. ~~copyright~~Any ~~laws~~failure to raise additional funds on favorable terms could have a material adverse effect on our liquidity and financial condition.

Despite efforts to protect our proprietary rights through intellectual property laws, licenses, and confidentiality agreements, unauthorized parties may still copy or otherwise obtain and use our technology. Companies frequently enter into litigation based on allegations of infringement, misappropriation, or violations of intellectual property rights or other laws. From time to time, we may face allegations that we have infringed the trademarks, copyrights, patents, trade secrets and other intellectual property rights of third parties, including competitors. If it became necessary for us to resort to litigation to protect these rights, any proceedings could be burdensome, costly and divert the attention of our personnel, and we may not prevail. In addition, any repeal or weakening of laws or enforcement in the U.S. or internationally intended to protect intellectual property rights could make it more difficult for us to adequately protect our intellectual property rights, negatively impacting their value and increasing the cost of enforcing our rights.11

We ~~have~~face ~~obtained~~exposure ~~and applied for U.S. trademark and service mark registrations and will continue~~ to ~~evaluate~~fraudulent ~~the~~or ~~registration~~illegal ofactivity, ~~additional trademarks~~ and ~~service~~our ~~marks~~reputation ~~or,~~may asbe ~~appropriate.~~negatively Weimpacted ~~cannot~~by ~~guarantee~~improper ~~that~~conduct ~~any~~by of our ~~pending~~business ~~trademark applications will be approved by the applicable governmental authorities. Moreover~~partners, ~~even~~employees ~~if the trademark applications are approved, third parties may seek to oppose~~ or ~~otherwise challenge these registrations~~agents. ~~A failure to obtain registrations for our trademarks could limit and impede our marketing efforts.~~

11We face exposure to the risk that employees, independent contractors, or consultants may engage in fraudulent or other illegal activities. Misconduct by these parties could be intentional, reckless and/or negligent conduct. There may be disclosure of unauthorized activities that violate government regulations, manufacturing standards, health care laws, abuse laws, and other financial reporting laws. Further, it may not always be possible for us to identify and deter misconduct by our employees and other third parties, and the precautions taken by us to detect and prevent these activities may not always be effective. As a result, we could face potential penalties and litigation.

WeFurthermore, ~~may~~we ~~need~~cannot toprovide ~~enter~~assurance ~~into~~that our ~~intellectual~~internal ~~property license~~controls ~~agreements~~and incompliance ~~the~~systems ~~future~~will protect us from acts committed by our employees, ~~and~~agents, ifor wecontracted ~~are~~third ~~unable~~parties in violation of U.S. federal or state or local laws. Any misconduct or even allegations could damage our reputation and subject us to civil ~~obtain~~or ~~these~~criminal ~~licenses~~investigations and shareholder lawsuits, ~~our~~could ~~business~~lead to substantial civil and criminal monetary and non-monetary penalties or damages, and could because ~~harmed~~us to incur significant legal and investigatory fees.

We ~~may~~face ~~need~~risks orassociated ~~may choose to obtain licenses and/or acquire intellectual property rights from third parties in connection~~ with ~~our current or future products and~~strategic ~~brands~~acquisitions. We may fail to obtain any of these licenses or intellectual property rights on commercially reasonable terms. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources to develop or license replacement technology. If we are unable to do so, we may be unable to develop or commercialize the affected products, which could materially harm our business and the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation.

~~Our~~Since ~~ability~~our toinception, ~~use~~we ~~our~~have ~~net~~strategically ~~operating losses~~acquired several businesses, and we may continue to ~~offset~~make ~~future~~strategic ~~taxable~~acquisitions, ~~income~~some of which may be ~~subject~~material. toThese ~~certain~~acquisitions ~~limitations.~~may involve a number of financial, accounting, managerial, operational, legal, compliance, and other risks and challenges, including the following, any of which could adversely affect our results of operations:

As● ofany ~~December~~acquired ~~31,~~business ~~2024,~~could weunder-perform ~~had~~relative ~~net operating loss (“NOL”) carryforwards for federal and state income tax purposes which may be available~~ to offset taxable income in future years. Approximately $0.7 million of federal NOLs will expire if not utilized by 2036 and approximately $193.0 million of federal NOLs carryforward indefinitely. State net operating loss carryforwards in the amount of $115.8 million begin expiring in 2039 and approximately $12.8 million have an indefinite life. A lack of future taxable income would adversely affect our ~~ability~~expectations ~~to utilize these NOLs before they expire. The utilization of our NOLs could be subject to annual limitations under Section 382~~ and ~~383 of~~ the ~~Internal~~price ~~Revenue~~that ~~Code~~we ~~(“IRC”~~paid orfor ~~the “Code”) of 1986~~it, ~~and similar state tax provisions due to ownership change limitations that may have occurred previously~~ or ~~that~~not ~~could~~perform ~~occur~~ in ~~the~~ ~~future.~~accordance Inwith ~~general, under Section 382, a corporation that undergoes an “ownership change” (as defined under Section 382 of the Code and applicable Treasury Regulations) is subject to limitations on~~ its ~~ability~~anticipated to utilize its pre-change NOLs to offset its future taxable income. As of December 31, 2024, we have not conducted an analysis of an ownership change under Section 382. To the extent that a study is completed, and an ownership change is deemed to occur, in the past or future, our NOLs and any NOLs of companies that we have acquired could be limited to offset any future taxable income.timetable;

~~There~~● is also a risk that due to regulatory changes, such as suspensions on the use of NOLs or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities for federal and state income tax purposes. For these reasons, we may ~~not~~incur beor ~~able to~~assume ~~utilize~~significant adebt ~~material portion of our NOLs, even if we attain profitability, which could result~~ in ~~increased~~connection ~~future~~with ~~tax liability to us and could adversely affect the results of~~ our ~~operations and overall financial condition.~~acquisitions;

~~Failure~~● byacquisitions ~~our~~could ~~co-manufacturers~~cause toour ~~comply with~~results ~~food~~of ~~safety,~~operations ~~environmental~~to ordiffer ~~other~~from ~~laws~~our ~~and~~own ~~regulations,~~ or ~~with~~ the ~~specifications~~investment ~~and~~community’s ~~requirements~~expectations ofin ~~our~~any ~~products~~given period, ~~may~~or ~~disrupt our~~over ~~supply~~the oflong ~~products~~term; and ~~adversely affect our business.~~

If● ~~any~~acquisitions of our suppliers or co-manufacturers fail to comply with food safety, environmental, health and safety or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted and our reputation could becreate ~~harmed.~~demands ~~Additionally,~~on our ~~suppliers~~management ~~and~~that ~~co-manufacturers are~~they required to maintain the quality of our products and to comply with our standards and specifications. In the event of actual or alleged non-compliance, we might be forced to find alternative suppliers or co-manufacturers and we may be ~~subject~~unable to ~~lawsuits~~effectively ~~and/or regulatory enforcement actions related to such non-compliance by the suppliers and co-manufacturers. As a result~~address, ~~our supply of raw materials~~ or ~~finished~~ ~~inventory~~for ~~could be disrupted or our costs could increase,~~ which would adversely affect our business, results of operations and financial condition. The failure of any co-manufacturer to produce products that conform to our standards could adversely affect our reputation in the marketplace and result in product recalls, product liability claims, government or third-party actions and economic loss. Additionally, actions we may ~~take~~incur toadditional mitigate the impact of any disruption or potential disruption in our supply of raw materials or finished inventory, including increasing inventory in anticipation of a potential supply or production interruption, may adversely affect our business, financial condition and results of operations.costs

12Additionally, following any business acquisition, we could experience difficulty in integrating personnel, operations, financial and other systems, and in retaining key employees and customers.

We may record goodwill, intangible assets or other assets on our consolidated balance sheet in connection with our acquisitions. If we are not able to realize the value of these assets, we may be ~~able~~required to ~~obtain~~incur orcharges ~~maintain~~relating to the impairment of these assets, which ~~necessary~~could ~~permits~~materially ~~and~~impact ~~authorizations~~our results of operations.

WeThere ~~may~~can ~~not~~ be ~~able~~no toassurance ~~obtain or~~that ~~maintain the necessary licenses, permits, certificates, authorizations or accreditations to operate~~ our ~~business, or may only be able~~current ~~to do so at great cost. In addition, we may not be able to comply fully with the wide variety of laws~~ and ~~regulations~~future ~~applicable~~strategic toalliances ~~the hemp-derived products industry. Failure to comply with~~ or toexpansions ~~obtain~~of ~~the~~scope ~~necessary~~of ~~licenses,~~existing ~~permits,~~relationships ~~certificates,~~will ~~authorizations or accreditations could result in restrictions on our ability to operate in the hemp-derived products industry, which could~~ have a ~~material~~beneficial ~~adverse~~impact ~~effect~~ on our business, financial condition orand results of operations.

We ~~are~~currently have, and may in the future enter into, additional strategic alliances with third parties that we believe will complement or augment our existing business. In particular, we currently have shared services agreements with Green Thumb for significant legal, accounting and operational support, including sales and marketing support. Our ability to complete strategic alliances is dependent onupon, and may be limited by, the ~~popularity~~availability of ~~consumer~~suitable ~~acceptance~~candidates and capital. In addition, strategic alliances could present unforeseen integration obstacles or costs, may not enhance our business and may involve risks that could adversely affect us, including significant amounts of management time that may be diverted from operations in order to pursue and complete such transactions or maintain such strategic alliances. Future strategic alliances could result in the incurrence of additional debt, costs and contingent liabilities, and there can be no assurance that future strategic alliances will achieve, or that our ~~brand~~existing ~~portfolio~~strategic alliances will continue to achieve, the expected benefits to our business or that we will be able to consummate future strategic alliances on satisfactory terms, if at all. Termination of any strategic alliances, including our shared services agreement with Green Thumb, could significantly disrupt our business. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

Our ability to generate revenue and be successful in the implementation of our business plan is dependent on consumer acceptance of and demand for our products. Acceptance of our products depends on several factors, including availability, cost, ease of use, familiarity of use, convenience, effectiveness, safety and reliability. If customers do not accept our products, or if such products fail to adequately meet customers’ needs and expectations, our ability to continue generating revenues could be reduced. Additional competition and increased product availability may result in competitors undercutting our prices. From time to time, we may need to reduce our prices in response to competitive and customer pressures and to maintain our market share, which could materially reduce our revenues.12

WePast ~~are~~ and ~~may~~potential ~~continue~~future todivestitures or beother ~~subject~~transactions ~~to constraints~~could onadversely ~~marketing~~affect our ~~products~~costs, revenues, profitability and financial position.

~~States~~In ~~have~~order ~~enacted~~to ~~strict~~position our ~~regulations~~business ~~regarding~~to ~~marketing~~take ~~and~~advantage ~~sales~~of ~~activities~~particular onfuture ~~hemp-derived~~growth ~~products.~~opportunities ~~There~~and/or ~~may~~consolidate beour ~~restrictions~~more oncapable ~~sales~~businesses, ~~and~~we ~~marketing~~have ~~activities~~in the past ~~imposed~~and bymay ~~government~~in ~~regulatory~~the ~~bodies~~future ~~that~~pursue ~~can~~a ~~hinder~~strategy ~~the~~of ~~development~~focusing on one or more specialized facets of our ~~business~~products and ~~operating results~~services. ~~Restrictions~~These ~~may~~actions ~~include~~may ~~regulations~~require that ~~specify~~we ~~what,~~abandon ~~where~~or ~~and~~divest tocertain ~~whom~~assets ~~product~~or ~~information~~businesses ~~and~~that ~~descriptions~~no ~~may~~longer ~~appear~~fit ~~and/or~~within beour ~~advertised.~~evolving ~~Marketing,~~strategic ~~advertising~~direction, ~~packaging~~ ~~and~~as ~~labeling~~we ~~regulations~~did with ~~also~~the ~~vary~~sale ~~from~~of ~~state~~our tocultivation ~~state,~~business ~~potentially~~and ~~limiting~~exit ~~the~~of ~~consistency~~our ~~and~~extraction ~~scale~~business. ofAbandoning ~~consumer~~or ~~branding communication~~divesting ~~and~~certain ~~product~~assets ~~education~~or ~~efforts.~~businesses ~~The~~may entail ~~regulatory~~engaging ~~environment~~ in ~~the~~discussions, ~~U.S.~~evaluating ~~limits~~opportunities ~~our~~and ~~ability~~entering tointo ~~compete~~agreements, ~~for~~potentially ~~market~~resulting ~~share~~ in a ~~manner~~transactions ~~similar~~involving significant torisks ~~other~~and ~~industries.~~uncertainties Ifthat wecould ~~are~~adversely ~~unable~~affect toour ~~effectively~~business, ~~market~~results ~~our~~of ~~products~~operations and ~~compete~~financial ~~for~~condition. ~~market~~We ~~share,~~may ornot be ifable ~~the~~to ~~costs of~~find ~~compliance~~potential ~~with~~buyers ~~government~~on ~~legislation~~favorable ~~and~~terms, ~~regulation~~we ~~cannot~~may beexperience ~~absorbed~~disruption ~~through~~to ~~increased~~our ~~selling~~business ~~prices~~and/or ~~for~~we ~~our~~may ~~products,~~divert ~~our~~management ~~sales~~attention from other business concerns, lose key employees and ~~operating~~possibly ~~results~~retain ~~could~~certain beliabilities ~~adversely~~related ~~affected~~to these potential transactions.

~~Our~~We ~~business~~have ~~and~~substantial ~~asset~~debt ~~portfolio~~and ~~are~~other ~~not~~financial ~~highly~~obligations, ~~diversified~~and bywe ~~either~~may ~~industry~~incur oreven ~~geographically~~more debt. IfAny failure to meet our ~~business~~debt and ~~assets~~other ~~underperform,~~financial obligations or maintain compliance with related covenants could harm our business, financial condition, and results of operations ~~would be negatively impacted~~.

~~Our~~From ~~current~~November ~~business~~2024 ~~is focused on extraction solutions and hemp-derived THC beverages.~~through ~~While~~August ~~we may purchase other assets and make investments not limited to the cannabis and hemp industries~~2025, we ~~intend~~issued tomultiple ~~maintain~~Notes ~~and~~of ~~continue to~~which ~~acquire businesses, licenses and assets~~$80.0 ~~Thus,~~million wein ~~have,~~principal ~~and~~is ~~are~~outstanding ~~expected to have, limited industry diversity~~ as toof ~~asset~~December ~~type~~31, ~~and revenue generation~~2025. ~~Additionally~~The Notes, ~~our hemp-derived beverage business is geographically concentrated in the states in~~ which ~~such products are permitted,~~rank ~~and~~on ~~new federal~~parity, ~~state~~are orsenior ~~local~~secured ~~regulations, interpretations, or enforcement actions could limit our ability to manufacture and sell hemp-derived beverages~~obligations. ~~This~~The ~~lack~~Notes ofimpose ~~industry~~certain ~~and~~customary ~~geographic~~affirmative ~~diversification increases the risk associated with the revenue stream we expect to receive from our businesses~~ and ~~assets~~negative ~~and,~~covenants asupon ~~a result~~us, ~~could~~including ~~have~~relating to aranking ~~material adverse effect on our business, financial condition~~ and ~~results~~ reservation of ~~operations~~shares.

WeIf ~~face~~an ~~risks~~event ~~related~~of default under the Notes occurs and is not waived, the holder can elect to accelerate all or a portion of the then-outstanding principal amount of the applicable Notes, plus accrued and unpaid interest, including default interest, which accrues at a rate per annum equal to 14% from the date of a default or event of default. This immediate payment may negatively impact our ~~products~~financial condition. In addition, any failure to make scheduled payments of interest and principal on our outstanding indebtedness would likely harm our ability to incur additional indebtedness on acceptable terms. Our cash flow and capital resources may be insufficient to pay interest and principal on our debt in the future. If that should occur, our capital raising or debt restructuring measures may be unsuccessful or inadequate to meet our scheduled debt service obligations, which could cause us to default on our obligations and further impair our liquidity.

WeOur ~~have~~ability ~~committed~~to ~~and~~make ~~expect to~~scheduled ~~continue~~payments ~~committing~~on ~~significant~~our ~~resources~~debt and ~~capital~~other tofinancial obligations ~~develop~~depends on our financial and ~~market~~operating ~~existing~~performance. ~~products~~Our financial and ~~new~~operating ~~products~~performance ~~and~~will ~~services.~~continue ~~These~~to be subject to ~~products~~prevailing ~~are~~economic ~~relatively~~conditions ~~untested~~and into ~~the~~financial, ~~marketplace~~business, and weother ~~cannot~~factors, ~~assure~~some ~~shareholders~~of ~~and~~which ~~investors~~are ~~that~~beyond weour ~~will~~control. ~~achieve~~Failure ~~market~~within ~~acceptance~~any ~~for~~applicable ~~these~~grace ~~products~~or cure periods to make such payments, or ~~other~~comply ~~new~~with ~~products~~any covenant, would create a default under the Notes. Our cash flow and ~~services~~existing ~~that~~capital weresources may ~~offer~~be ininsufficient ~~the~~to ~~future,~~repay orour ~~that~~debt ~~our~~at ~~products~~maturity, ~~that~~in ~~achieve~~which ~~market~~case ~~acceptance will~~we bewould ~~able~~have to ~~maintain~~extend ~~that~~such ~~acceptance~~maturity date, ~~over~~or ~~time.~~otherwise ~~Moreover~~repay, ~~these~~refinance, and/or ~~other~~restructure ~~new~~the ~~products~~obligations ~~and~~under ~~services~~the ~~may~~Notes, beincluding ~~subject~~with toproceeds ~~significant competition~~from ~~with~~the ~~offerings~~sale byof ~~new~~ assets, and ~~existing~~additional ~~competitors~~equity inor ~~the~~debt ~~business~~capital. InIf ~~addition,~~we ~~new~~are ~~products~~unsuccessful ~~and~~in ~~services~~obtaining ~~may~~such ~~pose~~extension, aor ~~variety of~~entering ~~challenges.~~into ~~The~~such ~~failure~~repayment, refinance, or restructure prior to ~~successfully~~maturity, ~~develop~~or ~~and~~any ~~market~~other ~~these~~default ~~new~~existed ~~products~~under ~~and~~the ~~services~~Notes, the holder could ~~seriously~~accelerate ~~harm~~the ~~our~~indebtedness ~~business~~under the Notes, ~~prospects~~foreclose against its collateral, ~~revenue~~ or seek other remedies, ~~results~~which ofwould ~~operation~~jeopardize our ability to continue our current operations and ~~financial~~raise ~~condition~~substantial doubt about the Company’s ability to continue as a going concern.

Hemp-derived products that exceed the limits in the Farm Bill are federally illegal. Any products we may produce or license that are intended to be Farm Bill compliant but exceed the limits of psychoactive material allowable under the Farm Bill could subject us to action by regulatory authorities and/or to lawsuits by consumers, which may have a material adverse effect on us and the trading price of our Common Stock.13

13We are dependent on key inputs and suppliers; and fluctuations in the cost or availability of materials we use in our products and supply chain could negatively affect our results.

~~Risks~~Our ~~Relating~~business is dependent on a number of key inputs and their related costs, including raw materials, parts and supplies. Any significant interruption or negative change in the availability or economics of the supply chain for key inputs could materially impact our business, financial condition, results of operations or prospects. Some of these inputs may only be available from a single supplier or a limited group of suppliers, or be sourced abroad. If a limited source supplier was to go out of business, we might be unable to find a replacement for such source in a timely manner, or at all. If a limited source supplier were to be acquired by a competitor, that competitor may elect not to sell to us in the future. Manufacturing delays or unexpected transportation delays, particularly from materials we source abroad, can also cause us to incur significantly increased costs. Any of these fluctuations may increase our ~~Industry~~cost of products and have an adverse effect on our profit margins, results of operations and financial condition. Any inability to secure required supplies and services, or to do so on appropriate terms, could have a materially adverse impact on our business, prospects, revenue, results of operations and financial condition.

~~The~~Our ~~2018~~sales ~~Farm~~are ~~Bill,~~difficult ~~which federally legalized hemp and hemp products, could be amended~~ to ~~severely restrict or prohibit the Company’s hemp-derived THC products~~forecast.

~~The~~Market ~~2018~~data ~~Farm~~for ~~Bill,~~the ~~which~~industries ~~has~~in ~~been~~which ~~extended~~we ~~through~~operate ~~September~~is ~~30,~~limited ~~2025~~and ~~without modification, legally defined hemp as Cannabis Sativa L~~unreliable. ~~containing~~We ~~less~~must ~~than~~rely ~~0.3% delta-9~~largely ~~THC~~ on aour ~~dry~~own ~~weight basis, effectively legalizing hemp in the United States. The 2018 Farm Bill is the legal basis for the Company’s entry into the hemp-derived THC product~~ market. ~~Legislators~~research ~~have proposed various amendments~~ to ~~the~~forecast ~~2018 Farm Bill in the past that would restrict the production and sale these products~~sales, ~~none~~as ofdetailed ~~which have passed. The provisions of the 2018 Farm Bill governing hemp must be~~forecasts ~~renewed by Congress and~~ are ~~subject~~not togenerally ~~amendment~~obtainable ~~during~~from ~~this~~other ~~reauthorization process~~sources. ~~On November 16~~Additionally, ~~2023,~~any ~~former~~market ~~President~~research ~~Biden signed into law H.R. 6363 (the Further Continuing Appropriations~~ and ~~Other~~our ~~Extensions~~projections ~~Act,~~of ~~2024)~~estimated ~~which~~total ~~extended~~retail ~~the 2018 Farm Bill through September~~sales, 30demographics, ~~2024.~~demand ~~While~~and ~~the~~similar ~~2018~~consumer ~~Farm Bill expired on September 30~~research, ~~2024,~~are ~~Congress~~based ~~passed H.R. 9747~~ on ~~September~~assumptions ~~25,~~from ~~2024,~~limited ~~which~~and ~~extended~~unreliable ~~federal spending~~market ~~for~~data ~~some~~and ofa ~~these~~rapidly ~~programs through December 30, 2024~~evolving market. OnA ~~December~~failure ~~21,~~in ~~2024, former President Biden signed H.R. 10545 (~~the ~~American Relief~~demand ~~Act),~~for ~~which~~our ~~further~~products ~~extends~~to ~~the~~materialize ~~2018~~as ~~Farm~~a ~~Bill~~result ~~through~~of ~~September 30~~competition, ~~2025~~technological change, ~~after~~failure ~~which~~of itstates ~~is set~~ to ~~expire. Proposed amendments~~ toenforce ~~the~~regulations, ~~2018~~state ~~Farm~~or ~~Bill~~federal ~~prior~~adoption toof ~~its~~new ~~expiration~~regulations ~~could restrict~~ or ~~prohibit~~enforcement ~~altogether~~of ~~the~~regulations ~~manufacturing~~previously ~~and~~not ~~sale~~enforced, ofor ~~hemp-derived~~other ~~products~~factors ~~sold~~could ~~by the Company which would be likely to~~ have a material adverse effect on usour ~~and~~business, ~~the~~results ~~trading price~~ of ~~our~~operations ~~Common~~and ~~Stock~~financial condition.

~~States~~We ~~are~~may ~~passing~~be ~~their~~subject ~~own~~to ~~laws regulating, restricting or prohibiting hemp~~growth-~~derived~~related ~~products, creating a difficult regulatory patchwork within which to operate~~risks.

~~State~~We and local authorities have been active over the last few years implementing their own laws regulating the cultivation, manufacturing, testing, marketing, and sale of both intoxicating and non-intoxicating hemp products. Some states ban these products altogether. Other state laws permit hemp-derived products but impose new regulatory frameworks containing licensing and labeling requirements, age gates, amount and potency restrictions, allowable types of products, and restricting where the products may be ~~sold.~~subject ~~The~~to ~~varied state regulatory framework for hemp products poses~~growth-related risks ~~to manufacturing~~, ~~marketing,~~including ~~selling,~~capacity constraints and ~~shipping~~pressure ~~hemp-derived~~on ~~products~~our ~~around~~internal ~~the~~systems ~~country, whether wholesale or direct to consumers via online or brick~~ and ~~mortar retail locations~~controls. ~~Additionally,~~Our ~~hemp~~ability ~~legislation is pending at the state level around the country, creating additional risk~~ to ~~the~~manage ~~sale~~growth ~~and~~effectively ~~transport of products already produced under existing laws. Unforeseen regulatory obstacles or compliance~~will ~~costs~~require ~~related~~us to ~~state~~continue ~~laws may hinder the Company’s ability~~ to ~~successfully~~implement ~~compete~~and inimprove ~~some~~our ~~markets~~operational ~~for~~and ~~such~~financial ~~products.~~systems ~~Further, states~~and ~~in which the Company currently sells its hemp-derived products could decide in the future~~ to ~~ban these products altogether. If these regulatory changes occurred~~expand, ~~the~~train ~~revenue~~and ~~streams~~manage ~~we expect to receive from~~ our ~~businesses~~employees and contractors. ~~assets~~Our ~~would~~inability beto atdeal ~~risk~~with ~~and,~~this asgrowth ~~a result,~~may ~~could~~ have a material adverse effect on our business, ~~financial~~prospects, ~~condition~~revenue, ~~and~~ results of operation ~~operations~~and financial condition.

~~Hemp-derived~~We ~~THC~~rely on third parties for certain products sold ~~are~~to ~~not~~our ~~permitted~~customers, ~~under~~which could limit our control over the ~~FDCA~~quality of the products.

The ~~Food and Drug Administration (“FDA”) has taken the position that ingestible~~ products ~~over~~sold ~~which~~by ~~it has jurisdiction, including foods, beverages, and dietary supplements, that~~our ~~contain cannabinoids such as THC, including~~ hemp-derived ~~delta-9~~beverage ~~THC,~~business are ~~not~~co-manufactured ~~permitted~~by ~~under~~third ~~the Federal Food, Drug, and Cosmetic Act (“FDCA”)~~parties. ~~The~~We ~~FDA~~do ~~has~~ not ~~evaluated~~typically ~~THC,~~have ~~and~~any ~~therefore~~direct ~~does~~control ~~not~~over ~~consider~~these ~~it to be GRAS (Generally Recognized as Safe) for~~third-party ~~use in foods, including beverages~~co-manufacturers. ~~The~~These ~~FDA~~third-party ~~has~~co-manufacturers ~~also~~could ~~found~~experience ~~that~~quality ~~because~~control ~~THC~~issues, isequipment inproblems, ~~certain~~data ~~drugs approved by FDA~~loss, itand ~~cannot be used in foods/beverages~~other orevents ~~dietary~~relating ~~supplements.~~to ~~Accordingly, per~~ the ~~FDA,~~products ~~foods/beverages~~they ~~and~~produce ~~dietary~~that ~~supplements~~could ~~containing~~impact ~~hemp-derived THC do not comply with~~ the ~~FDCA.~~quality ~~FDA enforcement~~ of ~~its~~those ~~position~~products. ~~has~~Should ~~thus~~the ~~far~~third-party ~~been minimal and limited to sending warning letters to a relatively small number~~co-manufacturers ofwe ~~companies,~~rely ~~primarily~~upon ~~those~~not ~~claiming~~deliver toat ~~prevent,~~standards ~~diagnose,~~we ~~mitigate,~~expect ~~treat,~~and ~~or cure diseases~~desire, oracceptance ~~who~~of ~~target~~our ~~toward children. The FDA has issued warnings about~~ products ~~that~~could ~~resemble candy or other items appealing to children~~suffer, ~~emphasizing~~which ~~that~~would ~~such~~have ~~products~~an ~~could~~adverse ~~pose~~effect aon ~~risk~~our ofbusiness ~~unintentional ingestion~~ and ~~potential~~financial ~~harm due to the presence of cannabinoids~~performance. ~~The~~Further, ~~FDA~~we ~~may~~cannot ~~decide~~be inassured ~~the future to increase enforcement activities, regardless~~ of ~~whether~~entering ainto ~~company~~agreements ~~has~~with ~~made~~such ~~health~~third-party ~~claims related to its products or markets to children, which could~~co-manufacturers ~~impact~~on ~~the~~economically ~~Company’s~~favorable ~~offering of hemp-derived THC beverages and materially impact operations and revenue~~terms.

~~The~~We ~~FDA~~face ~~could~~an ~~issue~~inherent ~~new~~risk ~~regulations~~of ~~that~~product ~~prohibit or strictly~~liability ~~limit~~and ~~the~~similar ~~sale of hemp-derived products~~claims.

~~The~~As ~~FDA~~a ~~has~~producer ~~previously~~and ~~declined~~distributor of products designed to ~~issue~~be ~~regulations for~~ingested ~~the~~by ~~manufacture~~humans, ~~and~~we ~~sale~~face an inherent risk of ~~hemp-derived~~exposure to product liability claims, regulatory action and litigation if our products are alleged to have failed to meet expected standards or to have caused significant loss or injury. ~~For~~In ~~example~~addition, the insale ~~2023,~~of ~~the~~our ~~FDA~~products ~~denied~~involves ~~three~~the ~~citizen~~risk ~~petitions~~of ~~asking~~injury ~~the~~to ~~FDA~~consumers due to tampering by unauthorized third parties or product contamination. ~~conduct~~Previously ~~rulemaking~~unknown toadverse ~~allow~~reactions ~~the~~resulting ~~marketing~~from human consumption of ~~CBD~~our products alone or in combination with other medications or substances could occur. We may be subject to various product liability claims, ~~another~~including, ~~hemp-derived~~among ~~cannabinoid~~others, asthat ~~dietary~~our ~~supplements.~~products Incaused ~~conjunction~~injury, illness ~~with~~or ~~these~~death, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions ~~denials~~with other substances. As an agricultural product, the ~~FDA~~quality ~~has~~of ~~publicly~~hemp ~~stated~~is inherently variable, and consumers may raise claims that aour quality ~~new~~control ~~regulatory~~or ~~pathway~~labeling ~~should~~processes behave ~~created~~not bysufficiently ~~Congress~~ensured tothat ~~regulate~~our ~~CBD~~grown and ~~other~~manufactured ~~cannabinoid~~processes are sufficient to meet ~~products~~expected standards. ~~The~~A ~~FDA~~product ~~could~~liability ~~nevertheless~~claim ~~decide~~or toregulatory ~~regulate~~action ~~hemp~~against ~~products~~us could result in ~~the~~increased ~~future.~~costs, ~~New~~could ~~FDA~~adversely ~~regulations~~affect our ~~could~~reputation ~~materially~~with our clients and ~~negatively impact~~consumers ~~operations~~generally and ~~revenue.~~could ~~New~~have ~~FDA~~a ~~regulations~~material ~~could~~adverse ~~also~~effect ~~require~~on our business, results of operations and financial ~~investment~~condition. inThere ~~additional~~can ~~compliance~~be ~~mechanisms~~no ~~which~~assurances ~~could~~that we will be able to obtain or maintain product liability insurance on acceptable ~~impact~~terms ~~our~~or ~~profitability~~with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the ~~market~~future ~~price~~on acceptable ~~for~~terms, or at all. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our ~~Common~~potential ~~Stock~~products.

~~Other federal agencies may take enforcement actions against companies selling hemp-derived products.~~ 14

~~The~~Our Federal Trade Commission (“FTC”) and FDA frequently collaborate on enforcement where their jurisdictions overlap, particularly in regulating the advertising, labeling, and promotion of food, cosmetics, medical devices, and OTC drugs. In the CBD market, the FTC has joined the FDA in issuing warning letters to companies whose advertisements lacked competent and reliable scientific evidence, thereby violating the FTC Act, 15 U.S.C. § 41 et seq. The FTC has also independently issued warning letters to CBD companies for making exaggerated or misleading claims without sufficient scientific backing. While FTC enforcement actions related to CBD were historically limited to warnings, in December 2020, the agency initiated its first formal enforcement action against six CBD companies for allegedly making unsupported health claims, leading to settlement agreements that required them to cease such claims and pay monetary judgments. In 2023 and 2024, the FTC sent cease and desist letters to companies marketing hemp-derived THC products ~~that~~may ~~appealed~~be tosubject ~~children. The regulatory landscape and potential for future FTC enforcement actions could pose an ongoing risk~~ to ~~the~~product ~~Company’s offering of hemp-derived THC products~~recalls.

14Manufacturers, distributors and retailers of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labeling disclosure. If any of our products are recalled due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. We may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin, if at all. In addition, a product recall may require significant management attention. There can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. Additionally, if any of our brands were subject to recall, our image and the image of that brand could be harmed. A recall for any of the foregoing reasons could lead to decreased demand for our products and could have a material adverse effect on the results of our operations and financial condition. Additionally, product recalls may lead to increased scrutiny of our operations by the FDA, or other regulatory agencies, requiring further management attention and potential legal fees and other expenses.

InThe ~~addition,~~growth ~~while~~and ~~the~~success ~~Drug~~of ~~Enforcement~~our ~~Agency~~business ~~(“DEA”)~~are ~~has~~significantly ~~opined~~affected ~~that~~by ~~delta-9~~the ~~THC~~continued ~~complies~~contributions ~~with~~of ~~the~~personnel ~~Farm~~employed ~~Bill,~~by ~~there~~Green isThumb, noas ~~guarantee~~well ~~that~~as itour ~~will~~ability ~~maintain~~to ~~this~~attract ~~position~~and inretain ~~the~~qualified ~~future~~personnel.

~~Hemp-derived~~Our growth and success are significantly affected by the continued contributions made by our Chairman of the Board and Interim Chief Executive Officer, Benjamin Kovler, by our Chief Financial Officer, Brad Asher and by other individuals who are employees of Green Thumb and who provide services to us under a shared services agreement. We rely on Mr. Kovler’s expertise in business operations and the cannabis and hemp industries when we are developing or acquiring new products and services and on Mr. Asher’s financial and reporting expertise. If Mr. Kovler or Mr. Asher cannot serve us or are ~~federally~~no ~~illegal~~longer willing to do so, or if ~~they~~Green ~~exceed~~Thumb ~~0.3%~~no longer provides personnel support to us under the ~~delta-9-THC~~shared services agreements, we may not be able to find alternatives in a timely manner or at all. This may have a material adverse effect on our business. In addition, our growth and success will depend to a ~~dry~~significant ~~weight~~extent ~~basis~~on our ability to identify, attract, hire, train and retain qualified professional, creative, technical and managerial personnel. Competition for experience and qualified talent can be intense. We may not be successful in identifying, attracting, hiring, training and retaining such personnel in the future. If we are unable to hire, assimilate and retain qualified personnel in the future, such inability could adversely affect our operations.

~~Hemp-derived~~We ~~products~~rely ~~which exceed a delta-9 THC concentration of 0.3%~~ on athird ~~dry~~parties, ~~weight~~including ~~basis are federally illegal under the Controlled Substances Act (the “CSA”). The CSA~~our ~~classifies~~largest ~~cannabis~~shareholder, asto anprovide ~~illegal~~numerous ~~Schedule~~capabilities Ithat ~~drug,~~we ~~meaning~~depend itupon ~~is considered~~ to ~~have~~operate, and a ~~high~~disruption ~~potential~~of ~~for~~these ~~abuse~~systems ~~and~~could noadversely affect ~~accepted~~our ~~medical use~~business.

~~Any~~We ~~failure~~are todependent ~~keep~~on vendors ~~the~~and ~~delta~~third-~~9-THC~~party inproviders, ~~hemp-derived products~~including ~~below~~the ~~0.3%~~services onof athe ~~dry~~employees ~~weight~~of ~~basis~~Green ~~could~~Thumb, ~~subject~~our uslargest toshareholder, ~~action~~under byshared services ~~regulatory~~agreements. ~~authorities~~A ~~and/or~~serious disruption to ~~lawsuits~~any byof ~~consumers.~~these Incould ~~addition, the~~significantly ~~approval~~limit ofour ~~medical~~ability ~~and~~to ~~recreational~~serve ~~marijuana~~our bycustomers. ~~many~~The ~~states~~failure of ~~has~~one ~~created~~or amore ~~situation~~such inproviders ~~which~~to itprovide ~~may~~the beexpected ~~difficult~~services, orprovide ~~impossible~~them ~~for regulators~~on ~~and~~a ~~courts~~timely tobasis ~~determine~~or ~~whether~~provide them at the ~~delta-9-THC~~prices ~~levels~~we expect, ~~reflected~~or inotherwise ~~consumers’~~meet ~~blood~~our ~~tests~~performance ~~are~~standards ~~the~~and ~~result~~expectations of(including ~~hemp-derived products~~with orrespect ~~marijuana~~to ~~products.~~data ~~This~~security, ~~may~~compliance ~~result~~and indata privacy ~~regulatory~~and ~~actions~~protection orlaws) ~~lawsuits.~~may ~~Certain~~adversely ~~hemp-derived~~affect ~~products~~our ~~may~~business. Further, ~~over~~if ~~time,~~we ~~gradually increase~~found ~~their~~it ~~delta-9-THC~~necessary orto ~~total~~replace ~~THC~~any ~~concentration~~such service provider, ~~and~~disruptions ~~this~~arising ~~may~~from ~~ultimately~~the ~~cause~~transition ~~such~~of ~~products~~functions to ~~exceed~~an alternative provider, or the ~~applicable~~costs ~~concentration~~of developing our own ~~level,~~functions ~~making~~if ~~such~~we ~~products~~were ~~illegal~~unable into ~~certain~~find ~~jurisdictions.~~an Ifalternate ~~any~~provider, ofmay ~~these~~have ~~situations~~a ~~occur,~~material ~~the~~adverse ~~Company~~effect ~~may~~on beour ~~subject~~results toof ~~regulatory action~~operations or financial ~~lawsuits~~condition. ~~that~~Any disruption could adversely ~~have~~impact aour ~~material~~results ~~adverse~~of ~~effect~~operations onand the ~~Company~~trading price of our common stock.

~~The~~Our ~~Company~~success isdepends ~~subject~~in part upon our ability to ~~regulations~~protect ~~that~~our ~~could~~intellectual ~~impact~~property ~~its~~and ~~ability to~~protecting ~~sell~~and ~~its~~defending ~~product~~against ~~internationally.~~intellectual property claims may have a material adverse effect on our business

~~The~~Our ~~Company~~ability ~~currently~~to ~~sells~~compete ~~its products~~ depends, in ~~Canada and~~part, ~~may~~upon ~~conduct~~the ~~sales~~successful inprotection ~~other~~of ~~international~~our ~~markets~~intellectual inproperty, including the ~~future.~~core ~~Doing~~brands sowe ~~would~~own ~~subject~~and ~~the~~license ~~Company~~ to ~~the~~related ~~laws~~parties: Señorita, ~~regulations~~RYTHM, incredibles, Beboe, Dogwalkers, Doctor Solomon’s, &Shine, and ~~international~~Good Green. We seek to protect our intellectual ~~treaties~~property ofrights ~~the~~through ~~countries~~a ~~where~~combination itof ~~operates~~copyright orand ~~engages~~trademark inlaws, common law rights, trade. ~~Failure~~secret toand ~~adhere~~unfair tocompetition ~~existing~~laws, ornon-disclosure agreements, ~~evolving~~confidentiality ~~regulations~~procedures, inand ~~any~~other ~~jurisdiction could~~contractual ~~materially~~rights, ~~impact~~as ~~the~~well ~~Company’s~~as ~~business~~procedures governing internet and domain name registrations. However, ~~There~~there iscan ~~also~~be ano ~~risk~~assurance that ~~authorities~~these measures will be successful in ~~these~~any ~~jurisdictions~~given ~~may~~case. ~~determine~~We ~~that the~~may ~~Company~~be ~~was~~unable orto isprevent ~~not~~the inmisappropriation, infringement ~~compliance~~or ~~with~~violation ~~local~~of ~~laws.~~our Ifintellectual ~~its~~property ~~past~~rights, orbreach ~~present~~of ~~activities~~any ~~are~~contractual ~~found~~obligations to ~~violate~~us, ~~such~~or ~~regulations,~~independent ~~the~~development ~~Company~~of ~~could~~intellectual ~~face~~property ~~enforcement~~that ~~actions~~is similar to ours, ~~including~~any ~~civil~~of orwhich ~~criminal~~could ~~penalties,~~reduce ~~fines,~~or ~~damages,~~eliminate ~~operational~~any ~~restrictions~~competitive oradvantage ~~restructuring~~we have developed, ~~asset~~adversely ~~seizures,~~affecting ~~and~~our ~~the~~revenues ~~denial~~or ofotherwise ~~regulatory~~harming ~~approvals~~our business.

Third parties with whom we do business may perceive themselves as being exposed to reputational risk because of their relationship with us due to our cannabis and hemp-related business activities and may as a result, refuse to do business with us.15

~~The~~We ~~third~~generally ~~parties~~control ~~with whom we do business may perceive that they are exposed~~ access to ~~reputational risk~~and ~~because~~use of our ~~cannabis~~intellectual property and~~/or~~ ~~hemp-related~~other ~~business~~confidential ~~activities.~~information ~~Any~~through ~~third-party service provider could suspend or withdraw its services if it perceives that~~ the ~~potential~~use ~~risks exceed the potential benefits~~ of ~~providing~~internal ~~such~~and ~~services~~external ~~to us. Specifically~~controls, ~~while we have banking~~including ~~relationships~~contractual ~~and~~protections ~~believe~~with ~~that~~employees, ~~the services can be procured from other institutions~~contractors, ~~we may~~customers, inand ~~the future~~partners, ~~have~~and ~~difficulty~~our ~~maintaining existing~~software oris ~~securing~~protected ~~new~~by ~~bank accounts or clearing services~~U.S. ~~Our~~copyright ~~failure to establish or maintain business relationships could have a material adverse effect on our business, financial condition and results of operations~~laws.

WeDespite ~~face~~our ~~competition~~efforts ~~from~~to protect our proprietary rights through intellectual property laws, licenses and confidentiality arrangements, unauthorized parties may still copy or otherwise obtain and use our trademarks, recipes or other intellectual property. Companies frequently enter into litigation based on allegations of infringement, misappropriation, or violations of intellectual property rights or other laws. Enforcement of our intellectual property rights would be costly, and there can be no assurance that we will have the ~~illicit~~resources ~~market~~to undertake all necessary action to protect asour ~~well~~intellectual asproperty ~~larger~~rights ~~competitors~~or that we will be successful. Any infringement of our material intellectual property rights could require us to redirect resources to actions necessary to protect same and ~~licensed~~could ~~medical~~distract management from our underlying business operations. An infringement of our material intellectual property rights and ~~adult~~resulting ~~use~~actions ~~cannabis~~could ~~dispensaries~~adversely affect our operations.

~~The~~Further, ~~U.S.~~from ~~cannabis~~time ~~industry is~~to time, we ~~and~~may isface ~~expected~~allegations tothat ~~continue~~we tohave beinfringed the trademarks, ~~competitive.~~copyrights, Apatents, ~~number~~trade ofsecrets and other ~~companies~~intellectual ~~engage~~property inrights of third parties, ~~and~~including ~~may~~competitors inor ~~the~~that ~~future~~we ~~engage~~have infailed to protect our licensees from such infringement claims, ~~cannabis-related~~resulting in indemnification. ~~businesses~~If it became necessary for us to resort to litigation to protect these rights, ~~operate~~any ~~businesses~~proceedings incould ~~competition~~be ~~with~~burdensome, uscostly and ~~purchase~~divert the ~~businesses~~attention of our personnel, and ~~assets~~we may not prevail. In addition, any repeal or ~~make~~weakening ~~investments~~of ~~that~~laws weor ~~will~~enforcement ~~also~~in ~~seek~~the ~~to purchase~~U.S. or internationally intended to protect intellectual property rights could make. Weit ~~face~~more ~~and~~difficult ~~expect~~for us to ~~continue~~adequately toprotect ~~face~~our ~~competition~~intellectual ~~from~~property rights, ~~state-licensed~~negatively ~~medical~~impacting their value and ~~adult-use~~increasing ~~dispensaries~~the cost of enforcing our rights.

~~Large~~We ~~chain~~have ~~stores,~~obtained ~~manufacturers,~~and applied ~~retailers,~~for ~~beverage~~certain U.S. and ~~other~~state ~~consumer~~trademark ~~products~~and ~~companies~~service ~~that~~mark ~~also~~registrations ~~recognize~~and ~~the~~will ~~potential~~continue ~~for~~to ~~financial~~evaluate ~~success~~the ~~through~~registration ~~acquisitions~~of additional trademarks and ~~investment~~service inmarks ~~the~~or, ~~hemp-derived~~as ~~beverage~~appropriate. ~~industry~~We ~~could~~cannot ~~strategically~~guarantee ~~acquire~~that ~~competitors~~any orof ~~invest~~our inpending ~~creating~~trademark ~~their~~applications ~~own~~will ~~brands.~~be Inapproved by the applicable ~~doing~~governmental soauthorities. Specifically, ~~these~~the ~~larger~~federal ~~competitors~~registrability ~~could~~of ~~produce~~ingestible ~~and~~hemp-derived ~~sell~~products ~~competing~~is ~~products~~difficult atto apredict ~~lower~~given the ~~price~~evolving regulatory landscape for hemp and ~~establish~~the aUSPTO’s ~~larger~~reaction ~~brand~~to ~~presence~~the same. ~~We may~~Moreover, ~~not~~even ~~have~~if the ~~personnel,~~trademark ~~products~~applications are approved, ~~marketing~~third ~~and~~parties ~~distribution~~may ~~capabilities,~~seek ~~and/~~to oppose or ~~financial~~otherwise ~~resources~~challenge these registrations. A failure to ~~compete~~obtain ~~effectively~~registrations ~~against~~for our trademarks ~~such~~could ~~larger~~dilute ~~competitors~~the value of our brands or limit and impede our marketing efforts.

We ~~also~~have ~~face~~licensed ~~competition from~~ the ~~illicit~~intellectual ~~market~~property for ~~and~~certain ~~illegal~~of ~~dispensaries~~our ~~and~~brands ~~cultivation~~for ~~operations~~use ~~that~~by ~~are~~state-licensed ~~unlicensed,~~cannabis ~~not~~operators. ~~regulated~~While ~~and~~we ~~that~~do ~~are~~not ~~selling~~engage in any cannabis -(or ~~hemp~~“marijuana-”) related ~~products.~~activity ~~Any~~under ~~inability~~the orControlled ~~unwillingness~~Substances ofAct, ~~law~~changes ~~enforcement~~in ~~authorities~~state toregulations ~~enforce~~of ~~existing~~cannabis, ~~laws~~changes ~~prohibiting~~in ~~the unlicensed production~~U.S. ~~and~~federal ~~sale~~cannabis ofenforcement ~~cannabis~~policy, or ~~hemp~~a ~~products~~failure ~~could~~of ~~result~~any inlicensee ~~increased~~to ~~competition~~comply ~~for~~with ~~us.~~the ~~Any~~terms of its license agreement or ~~all~~applicable ~~these~~state and ~~events~~local laws and regulations could ~~have~~impair aour ~~material~~Licensing ~~adverse effect~~Revenue onwe ~~our~~generate ~~business,~~from ~~financial~~any ~~condition~~licensee and ~~results~~could also impair the value of ~~operations~~our brands.

15We do not cultivate, distribute or dispense marijuana as that term is defined by the CSA. We have licensed the use of the intellectual property for certain of our brands to be used in the cannabis industry under state law programs legalizing such activities through state-regulated licenses, although such activities remain illegal under U.S. federal law. While state regulation in certain U.S. states may take a permissive approach to medical and/or adult-use of cannabis, the CSA may still be enforced by U.S. federal law enforcement officials against individuals and companies operating in those states for activity that is legal under state law. In exchange for Licensing Revenue, we license our brands to be used by a state licensed licensee whose operations, while compliant with state laws, are not permitted under federal law. A change in U.S. federal policy on cannabis enforcement and strict enforcement of federal cannabis laws against any licensee could materially impair the Licensing Revenue we receive, if the licensees’ ability to sell their products is materially impaired by such change. It may also impair the value of the brands licensed to such licensees and our operating results and/or financial condition.

~~Inconsistent~~While ~~public~~our ~~opinion~~intellectual property license agreements require that our licensees conduct their business activities in a manner compliant with the applicable state and ~~perception~~local oflaws, regulations and other requirements, we cannot guarantee that the ~~cannabis~~licensees ~~and~~will ~~hemp~~do ~~industries~~so. As a result, federal, state or local government authorities may ~~hinder~~seek ~~market~~to ~~growth~~bring ~~and~~criminal, ~~state~~administrative ~~regulation~~or regulatory enforcement actions against licensee(s), which ~~would~~could ~~adversely~~have ~~impact~~a ~~our~~material adverse ~~growth~~effect ~~plans~~on ~~and~~our ~~current operations~~Licensing ~~and~~Revenue, ~~result~~which in turn could have an adverse effect on our ~~business,~~operating ~~financial condition and~~ results ofor ~~operations~~financial condition.

~~Public~~Licensees ~~opinion~~in ~~and~~the ~~support~~cannabis ~~for~~industry ~~cannabis~~face ~~and~~challenges ~~hemp-derived~~unique ~~products~~to ~~has~~that ~~traditionally~~industry ~~been~~that ~~inconsistent~~can ~~and~~impact ~~varies~~their ~~from~~financial ~~state~~health ~~to state. While public opinion~~ and ~~support appears~~long-term ~~to be rising generally in the U~~viability.S. ~~for~~If ~~legalizing~~licensees ~~cannabis~~struggle financially ~~and~~or ~~loosening~~do ~~limitations~~not ofremain ~~hemp-derived products~~viable, itthat ~~remains~~can anegatively ~~controversial issue~~impact ~~subject~~our ability to ~~differing~~generate ~~opinions~~Licensing ~~surrounding the level of legalization~~Revenue. ~~Inconsistent~~As ~~public~~a ~~opinion~~licensor ~~and perception~~ of ~~cannabis~~brands ~~and~~to ~~hemp hinders growth of the~~ cannabis ~~and hemp industries~~operators, ~~which~~we ~~could~~are ~~have~~not aresponsible ~~material~~for ~~adverse~~licensees’ ~~effect~~compliance onwith ~~our~~applicable ~~business~~laws ~~plans,~~or ~~financial condition and results of operations~~regulations.

Consumer perception of our products may be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention and other publicity regarding the consumption of cannabis and hemp-derived products. There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the cannabis or hemp markets or any particular product, or consistent with earlier publicity. Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity that is perceived as less favorable than, or questions earlier research reports, findings or publicity could have a material adverse effect on the demand for our products. Our dependence upon consumer perceptions means that such adverse reports, whether or not accurate or with merit, could ultimately have a material adverse effect on our business, results of operations, financial condition and cash flows. Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis or hemp-derived products in general, or our products specifically, or associating the consumption of cannabis or hemp-derived products with illness or other negative effects or events, could have such a material adverse effect. A failure or alleged failure of quality control processes and procedures could result in negative consumer perception of our products or legal claims against us. Adverse publicity reports or other media attention could arise even if the adverse effects associated with such products resulted from consumers’ failure to consume such products appropriately or as directed.16

~~Hemp-derived~~Our ~~products~~intellectual ~~may~~property beis ~~shown~~subject to ~~have~~ ~~negative~~repurchase ~~health~~rights, ~~and/or~~which, ~~safety~~if ~~impacts~~exercised, ~~upon~~could ~~consumers~~materially adversely affect our business.

~~The~~Under ~~health~~the MC Brands and VCP ~~safety~~purchase ~~impacts~~agreements, ofGreen ~~hemp-derived~~Thumb ~~products~~or ~~have~~its ~~not~~affiliates ~~yet been~~may ~~established~~repurchase ~~via~~some ~~traditional~~or ~~scientific~~all of the assets we acquired from MC Brands and/or VCP ~~clinical~~within ~~studies~~five years of the respective transaction dates upon the occurrence of specified eligibility conditions, all of which are outside the control of both the Company and Green Thumb. The ~~FDA~~2026 ~~appears~~Appropriations Act includes an amendment to ~~believe~~the definition of hemp under the 2018 Farm Bill that, if implemented as enacted, could materially restrict the commercialization of certain hemp-derived THC products ~~may have~~beginning ~~significant~~365 ~~adverse~~days ~~health~~after ~~impacts~~enactment. ~~upon~~If ~~human~~the ~~beings,~~amendment ~~especially~~becomes effective in ~~regard~~its tocurrent ~~potential~~form ~~liver~~and ~~toxicity~~is not repealed, replaced, or ~~liver~~otherwise ~~damage.~~modified Ifprior to its effective date, one of the ~~FDA~~eligibility conditions under the MC Brands and VCP purchase agreements that could permit the repurchase right to become exercisable would be satisfied. However, the exercise of ~~scientific~~the ~~research~~repurchase ~~and/or~~option ~~clinical~~remains ~~studies~~solely ~~ultimately~~within ~~demonstrate~~the ~~negative~~discretion ~~health~~of Green Thumb and~~/or~~ ~~safety~~its ~~impacts~~affiliates. ofThe ~~hemp-derived~~full ~~products~~eligibility ~~upon~~conditions ~~consumers,~~are ~~then~~set ~~our~~forth ~~business~~in the MC Brands and ~~the~~VCP ~~trading~~purchase ~~price~~agreements offiled ~~our~~on ~~Common~~May ~~Stock~~22, ~~may~~2025 beand ~~materially~~August ~~adversely~~27, ~~affected~~2025, respectively.

WeLicensing ~~face~~Revenue ~~exposure~~represents, and is expected to ~~fraudulent~~continue orto ~~illegal activity~~represent, ~~and~~a significant portion of our ~~reputation~~total ~~may~~revenue. beIf ~~negatively~~a ~~impacted~~repurchase byoption ~~improper~~were ~~conduct~~exercised, bywe could lose a material source of revenue, which could have a material adverse effect on our business, ~~partners~~financial condition, ~~employees~~results of operations, and cash flows. In such event, the market price of our common stock could decline. The purchase agreements also grant Green Thumb or ~~agents~~its affiliates certain rights of first refusal and rights of first offer with respect to specified transactions.

WeBecause ~~face~~we ~~exposure~~do tonot ~~the~~control ~~risk~~licensees’ ~~that~~actions ~~employees, independent contractors or consultants may engage in fraudulent or other illegal activities. Misconduct by these parties could be intentional, reckless~~ and~~/or~~ ~~negligent~~we ~~conduct.~~depend ~~There~~on ~~may~~licensees be disclosure of unauthorized activities that violate government regulations, manufacturing standards, healthcare laws, abuse laws and other financial reporting laws. Further, it may not always be possible for ~~us to~~a ~~identify~~substantial ~~and~~portion ~~deter~~of ~~misconduct by~~ our ~~employees~~earnings ~~and~~from ~~other third parties~~operations, ~~and~~their ~~the~~conduct ~~precautions taken by us to detect and prevent these activities may not always be effective. As a result, we~~ could ~~face~~harm ~~potential~~our ~~penalties and litigation~~business.

~~Furthermore,~~We welicense ~~cannot~~to ~~provide~~licensees in the cannabis industry ~~assurance~~the ~~that~~rights ~~our~~to ~~internal~~produce ~~controls~~and market certain products sold with our trademarks, and ~~compliance~~we ~~systems~~do ~~will~~not ~~protect~~exercise usany ~~from~~operational ~~acts~~or ~~committed~~financial bycontrol over ~~our~~the ~~employees~~licensees’ businesses. If the quality, ~~agents~~focus, image or ~~business~~distribution ~~partners, including~~of ~~Green~~our ~~Thumb~~licensed brands diminish, inconsumer ~~violation~~acceptance of Uand demand for our brands could decline.S. ~~federal~~This orcould ~~state~~materially orand ~~local~~adversely ~~laws~~affect our business and results of operations. ~~Any~~Our ~~improper~~Licensing Revenue ~~acts~~constitutes ora ~~allegations~~substantial ~~could~~portion ~~damage~~of our ~~reputation and~~revenue. ~~subject~~A usdecrease toin ~~civil~~customer ordemand ~~criminal~~for ~~investigations~~any ~~and~~of ~~related~~our ~~shareholder~~licensed ~~lawsuits,~~brands could ~~lead~~have toa ~~substantial~~material adverse ~~civic~~effect ~~and~~on ~~criminal~~our ~~monetary and~~operating ~~non-monetary~~results ~~penalties~~or ~~and~~financial ~~could~~condition. ~~cause~~In usaddition, our inability to ~~incur~~replace ~~significant~~any ~~legal~~existing licensee, if necessary, could adversely affect our revenues and ~~investigatory~~results ~~fees~~of operations.

16Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

WeThe ~~face~~utilization ~~risks~~of ~~due~~our net operating loss (“NOL”) carryforwards is subject to ~~industry~~limitations ~~immaturity~~under Section 382 of the Internal Revenue Code (“IRC” or ~~limited~~the ~~comparable~~“Code”) of 1986, ~~competitive~~and similar state tax provisions due to ownership change limitations that may have occurred previously or ~~established~~that ~~industry~~could ~~best~~occur ~~practices~~in the future. In general, under Section 382, a corporation that undergoes an “ownership change” (as defined under Section 382 of the Code and applicable Treasury Regulations) is subject to limitations on its ability to utilize its pre-change NOLs to offset its future taxable income.

AsDuring athe ~~relatively~~quarter ~~new~~ended June ~~industry~~30, 2025, the Company completed an analysis of ownership changes. The analysis identified multiple historical ownership changes ~~there~~that ~~are~~significantly ~~relatively~~limit ~~few~~the ~~operators~~utilization of federal NOLs through the date of the most recent change on November 5, 2024, subjecting them to a minimal annual limitation. The Company is in the ~~hemp-derived~~process ~~beverage~~of ~~industry~~conducting ~~whose~~a ~~business~~similar ~~models~~analysis wefor ~~can~~state ~~follow~~income ortax ~~build~~purposes. ~~upon~~NOLs generated after November 5, 2024 are not currently subject to this limitation and may be available to offset future taxable income, although any future ownership changes could impose additional limitations. ~~Similarly~~The Company continues to maintain a full valuation allowance against its deferred tax assets, including NOLs, due to the Section 382 limitations resulting from historical ownership changes and the uncertainty ~~there~~surrounding isthe noCompany’s orability ~~limited~~to ~~information~~generate ~~about~~sufficient ~~comparable~~taxable ~~companies~~income ~~available~~to ~~for~~utilize ~~potential~~the ~~investors~~remaining NOLs before they expire. Any NOLs that cannot be utilized due to ~~review~~limitations inresulting ~~making~~from future ownership changes or a ~~decision~~lack ~~about~~of ~~whether~~future taxable income would adversely affect our ability to ~~invest~~reduce infuture ustax liabilities using past losses.

~~Shareholders~~Failure ~~and~~by ~~investors should consider, among other factors,~~ our ~~prospects~~co-manufacturers ~~for~~to ~~success~~comply inwith ~~light~~food ~~of the risks and uncertainties encountered by companies~~safety, ~~like~~environmental ~~us,~~or ~~that~~other ~~are~~laws inand ~~their early stages. For example~~regulations, ~~unanticipated expenses and problems~~ or ~~technical~~with ~~difficulties may occur, which may result in material delays in~~ the ~~operation~~specifications ~~of our business. We may fail to successfully address these risks~~ and ~~uncertainties~~requirements orof ~~successfully implement~~ our ~~operating strategies. If we fail to do so~~products, ~~it could~~may ~~materially harm~~ disrupt our ~~business~~supply ~~to the point~~ of ~~having~~products ~~to cease operations~~ and ~~could~~adversely ~~impair~~affect ~~the value of~~ our ~~Common Stock to the extent that investors may lose their entire investment~~business.

~~The~~If ~~cannabis~~any of our suppliers or co-manufacturers fail to comply with food safety, environmental, health and ~~hemp~~safety ~~industries~~or ~~could~~other laws and regulations, or face allegations ~~strong~~of ~~opposition~~non-compliance, ~~from~~their ~~other~~operations ~~industries~~may be disrupted, and our reputation could be harmed. Additionally, our suppliers and co-manufacturers are required to maintain the quality of our products and to comply with our standards and specifications. In the event of actual or alleged non-compliance, we might be forced to find alternative suppliers or co-manufacturers, and we may be subject to lawsuits and/or regulatory enforcement actions related to such non-compliance by the suppliers and co-manufacturers. As a result, our supply of raw materials or finished inventory could be disrupted or our costs could increase, which would adversely affect our business, results of operations and financial condition. The failure of any co-manufacturer to produce products that conform to our standards could adversely affect our reputation in the marketplace and result in product recalls, product liability claims, government or third-party actions and economic loss. Additionally, actions we may take to mitigate the impact of any disruption or potential disruption in our supply of raw materials or finished inventory, including increasing inventory in anticipation of a potential supply or production interruption, may adversely affect our business, financial condition and results of operations.

We ~~believe that established businesses in other industries~~ may ~~have~~not ~~a strong economic interest in opposing the development of the cannabis and hemp industries. Cannabis and hemp may~~ be ~~seen~~able ~~by companies in other industries as an attractive alternative~~ to ~~their~~obtain products, including alcohol, and as an alternative to various commercial pharmaceuticals. Many industries that could view the emerging cannabis and hemp industries as economic threats are well established, with vast economic and federal and state lobbying resources. It is possible that companies within these industries could use their resources to attempt to slow or ~~reverse legislation legalizing cannabis and hemp, and to create negative public perception of~~maintain ~~legalization~~necessary ofpermits ~~cannabis~~ and ~~hemp~~authorizations. Any inroads these companies make in halting or impeding legislative initiatives that would be beneficial to the cannabis and hemp industries could have a detrimental impact on some of our customers and, in turn, on our operations.

~~Our~~We may not be able to obtain or maintain the necessary licenses, permits, certificates, authorizations or accreditations to operate our business, ~~depends~~or may only be able to do so at great cost. In addition, we may not be able to comply fully with the wide variety of laws and regulations applicable to the hemp-derived products industry. Failure to comply with or to obtain the necessary licenses, permits, certificates, authorizations or accreditations could result in ~~part~~restrictions on ~~client~~our ~~licensing~~ability to operate in the hemp-derived products industry, which could have a material adverse effect on our business, financial condition or results of operations.

Our business is partly dependent on certain of our customers obtaining various licenses from various municipalities and state licensing agencies. There can be no assurance that any or all licenses necessary for our customers to operate their businesses will be obtained, retained, or renewed. If a licensing body were to determine that a customer of ours had violated applicable rules and regulations, there is a risk the license granted to that customer could be revoked, which could adversely affect our operations. There can be no assurance that our existing customers will be able to retain their licenses going forward, or that new licenses will be granted to existing and new market entrants.17

~~Banking~~We ~~regulations~~are ~~could~~dependent ~~limit~~on ~~access~~the topopularity of consumer ~~banking~~acceptance ~~services~~of our brand portfolio.

~~Since~~Our ~~the~~ability ~~use~~to ~~of cannabis~~generate isrevenue ~~illegal~~and ~~under~~be ~~federal~~successful ~~law, there is a compelling argument that banks cannot lawfully accept or deposit funds from businesses involved with cannabis. Consequently, businesses involved~~ in the ~~cannabis~~implementation ~~industry~~of ~~often~~our ~~have trouble finding a bank willing to accept their~~ business~~. The~~ ~~inability~~plan tois ~~open~~dependent ~~bank~~on ~~accounts~~consumer ~~may~~acceptance ~~make~~of itand ~~difficult~~demand for ~~some~~our products. Acceptance of our ~~customers~~products todepends ~~operate and their reliance~~ on ~~cash~~several ~~can~~factors, ~~result~~including ~~in a~~availability, ~~heightened~~cost, ~~risk~~ease of ~~theft~~use, ~~which~~familiarity ~~could~~of ~~harm~~use, ~~their businesses and~~convenience, ~~in turn~~effectiveness, safety ~~harm~~and ~~our business~~reliability. ~~Although~~If ~~the~~customers ~~proposal~~do ofnot ~~the~~accept ~~Secure~~our ~~and Fair~~products, ~~Enforcement~~or ~~Regulation~~if ~~Banking~~such ~~Act,~~products ~~also~~fail ~~referred~~ to asadequately ~~the~~meet ~~SAFER~~customers’ ~~Banking~~needs ~~Act~~and expectations, ~~would~~our ~~allow~~ability ~~banks~~ to ~~work~~continue ~~with~~generating ~~cannabis~~revenues ~~businesses and~~could ~~prevent~~be ~~federal~~reduced. ~~banking~~Additional ~~regulators~~competition ~~from~~and ~~intervening~~increased orproduct ~~punishing~~availability may ~~those~~result ~~banks,~~in ~~the~~competitors ~~legislation~~undercutting ~~still~~our ~~requires the approval of the U~~prices.~~S. House~~ ~~and~~From ~~Senate.~~time ~~There~~to ~~can~~time, bewe nomay ~~assurance~~need ~~that~~to ~~the~~reduce ~~SAFER~~our ~~Banking~~prices ~~Act or any similar legislation will become law~~ in ~~the~~response ~~U.S.~~to ~~Additionally,~~competitive and ~~most~~customer ~~courts~~pressures ~~have~~and ~~denied~~to ~~cannabis-related~~maintain ~~businesses~~our ~~bankruptcy~~market ~~protection~~share, ~~thus making it very difficult for lenders to recoup their investments,~~ which ~~may~~could ~~limit~~materially ~~the~~reduce ~~willingness of banks to lend to~~ our ~~customers and to us~~revenues.

17We are and may continue to be subject to constraints on marketing our products.

WeStates ~~face~~have ~~risks~~enacted ~~related~~strict regulations regarding marketing and sales activities on hemp-derived products. There may be restrictions on sales and marketing activities imposed by government regulatory bodies that can hinder the development of our business and operating results. Restrictions may include regulations that specify what, where and to whom product information and descriptions may appear and/or be advertised. Marketing, advertising, packaging and labeling regulations also vary from state to state, potentially limiting the consistency and scale of consumer branding communication and product education efforts. The regulatory environment in the U.S. limits our ~~insurance~~ability ~~coverage~~to compete for market share in a manner similar to other industries. If we are unable to effectively market our products and ~~uninsurable~~compete ~~risks~~for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices for our products, our sales and operating results could be adversely affected.

Our business isand ~~subject to~~asset aportfolio ~~number~~are ofnot ~~risks~~highly ~~and~~diversified ~~hazards~~by ~~generally,~~either ~~including~~industry ~~adverse~~or ~~environmental~~geographically. ~~conditions,~~If ~~accidents,~~our ~~labor~~business ~~disputes,~~ and ~~changes in the regulatory environment. Such occurrences could result in damage to~~ assets underperform, ~~personal~~our ~~injury or death~~business, ~~environmental~~financial condition ~~damage,~~and ~~delays~~results inof operations~~, monetary~~ ~~losses~~would ~~and~~be ~~possible~~negatively ~~legal liability~~impacted.

~~Although~~Our wecurrent ~~intend~~business ~~to continue~~is tofocused ~~maintain~~on ~~insurance~~hemp-derived toTHC ~~protect~~products ~~against~~and ~~certain~~licensing ~~risks~~our inintellectual ~~such~~property ~~amounts~~consumer aspackaged wegoods ~~consider~~brands. toThus, bewe ~~reasonable~~have, ~~our~~and ~~insurance~~are ~~will not cover all~~expected ~~the~~to ~~potential~~have, ~~risks~~limited ~~associated~~industry ~~with~~diversity ~~our~~as ~~operations.~~to Weasset ~~may~~type ~~also~~and berevenue ~~unable~~generation. toAdditionally, ~~maintain~~our ~~insurance~~hemp-derived toTHC ~~cover~~business ~~these~~is ~~risks at economically feasible~~geographically ~~premiums.~~concentrated ~~Insurance~~in ~~coverage~~the ~~may~~states ~~not~~in ~~continue~~which tosuch beproducts ~~available~~are orpermitted, ~~may~~and ~~not~~new befederal, ~~adequate~~state toor ~~cover~~local ~~any~~regulations, ~~resulting liability. Moreover~~interpretations, ~~insurance~~or enforcement ~~against~~actions ~~certain~~could ~~hazards~~limit ~~encountered~~our inability ~~our~~to ~~operations~~manufacture ~~may~~and ~~not~~sell behemp-derived ~~generally~~THC ~~available~~products. onOur ~~acceptable~~Licensing ~~terms.~~Revenue Weis ~~might~~currently ~~also~~limited ~~become~~to ~~subject~~Green toThumb ~~liability~~ for ~~pollution~~use orin ~~other~~their ~~hazards~~state-licensed ~~which~~cannabis weoperations. ~~may~~This ~~not~~lack beof ~~insured~~industry ~~against~~and orgeographic ~~which~~diversification weincreases ~~may~~the ~~elect~~risk ~~not~~associated with tothe ~~insure~~revenue ~~against~~stream ~~because~~we ~~of premium~~expect ~~costs~~to orreceive ~~other reasons. Losses~~ from ~~these~~our ~~events~~businesses ~~may~~and ~~cause~~assets usand, toas ~~incur~~a ~~significant~~result, ~~costs that~~ could have a material adverse effect ~~upon~~ on our business, financial ~~performance~~condition and results of operations.

We ~~participate~~face inrisks anrelated ~~evolving~~to ~~industry~~our products.

~~The~~We ~~cannabis~~have committed and ~~hemp industries~~expect ~~are~~to ~~not~~continue ~~yet~~committing ~~well-developed,~~significant resources and ~~many~~capital ~~aspects~~to ofdevelop ~~these~~and ~~industries’~~market ~~development~~existing products and ~~evolution~~new ~~cannot~~products beand ~~accurately predicted~~services. ~~While~~These weproducts ~~have~~are ~~attempted~~relatively tountested ~~identify~~in ~~many~~the ~~risks~~marketplace, ~~specific~~and towe ~~the~~cannot ~~cannabis~~assure shareholders and ~~hemp~~investors ~~industries,~~that ~~you~~we ~~should~~will ~~carefully~~achieve ~~consider~~market ~~that~~acceptance for ~~there~~these ~~are~~products, or other ~~risks~~ ~~that~~new ~~cannot~~products beand ~~foreseen~~services orthat ~~are~~we ~~not~~may ~~described~~offer in ~~this~~the ~~report~~future, ~~which~~or ~~could~~that ~~materially~~our ~~and~~products ~~adversely~~that ~~affect~~achieve ~~our~~market ~~business~~acceptance will ~~and~~be ~~financial performance.~~able Weto ~~expect~~maintain that ~~the~~acceptance ~~cannabis~~over ~~and~~time. ~~hemp~~Moreover, ~~markets~~these and ~~our~~other ~~business~~new ~~will~~products ~~evolve~~and inservices ~~ways~~may ~~that~~be ~~are~~subject ~~difficult~~ to ~~predict.~~significant competition ~~Our~~with ~~long-term success~~offerings ~~may~~by ~~depend~~new onand ~~our~~existing ~~ability~~competitors toin ~~successfully~~the ~~adjust~~business. ~~our~~In ~~strategy~~addition, tonew ~~meet~~products ~~the~~and ~~changing~~services ~~market~~may ~~dynamics.~~pose Ifa wevariety of ~~are~~challenges. ~~unable~~The failure to successfully ~~adapt~~ todevelop ~~changes~~and inmarket ~~the~~these ~~cannabis~~new products and ~~hemp~~services ~~industries,~~could seriously harm our ~~operations~~business, ~~could~~prospects, revenue, beresults ~~adversely~~of ~~affected~~operation and financial condition.

~~Risks Related to Ownership of our Common Stock~~18

~~Concentration~~Risks ofRelated ~~ownership~~to ~~may~~Ownership ~~prevent~~of ~~new investors~~our ~~from~~Common ~~influencing significant corporate decisions.~~Stock

~~Our~~Concentration ~~executive officers, directors and their affiliates beneficially own, in the aggregate, approximately 36%~~ of ~~our~~ownership ~~outstanding~~may ~~shares of Common Stock.~~prevent Innew ~~particular,~~investors ~~Green~~from ~~Thumb~~influencing ~~beneficially owns approximately 34% of our outstanding shares of Common Stock. As a result, Green Thumb exercises a~~ significant ~~level of control over all matters requiring stockholder approval, including the election of directors, amendment of our articles of incorporation and approval of significant~~ corporate ~~transactions~~decisions. Moreover, our bylaws permit stockholders to act by written consent. This control could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders. Conversely, this concentrated control could allow Green Thumb to consummate such transactions that many other shareholders do not support.

AGreen ~~large~~Thumb ~~number~~beneficially owns approximately 33% of our outstanding shares ~~eligible~~of ~~for~~common ~~public~~stock and has the right to acquire more through the exercise of warrants and ~~sale~~conversion ~~could~~of ~~depress~~notes. As a result, Green Thumb may have the ~~market~~ability ~~price~~to significantly influence matters requiring stockholder approval, including the election of directors, amendment of our ~~Common~~articles ~~Stock~~of incorporation and approval of significant corporate transactions. In addition, our bylaws permit stockholders to act by written consent. Accordingly, this concentration of ownership may have the effect of delaying or preventing or influencing a change of control of our company or changes in management and may make it more difficult to approve certain transactions without the support of Green Thumb. Conversely, this ownership concentration may allow Green Thumb to influence the outcome of transactions that other shareholders do not support.

WeA ~~have~~large ~~filed~~number ~~a registration statement to register the shares~~ of ~~Common Stock underlying outstanding options and~~ shares ~~reserved~~eligible for ~~future issuance under our equity compensation plans. Upon effectiveness of~~public ~~that~~sale ~~registration~~could ~~statement,~~depress ~~subject to~~ the ~~satisfaction~~market price of ~~applicable exercise periods and subject to~~ our ~~insider~~common ~~trading policy, the shares of Common Stock issued upon exercise of outstanding options will be available for immediate resale in the U~~stock.~~S. in the open market.~~

18We have filed registration statements to register the shares of common stock underlying outstanding options and shares reserved for future issuance under our equity compensation plans. Upon effectiveness of those registration statement, subject to the satisfaction of applicable exercise periods and subject to our insider trading policy, the shares of common stock issued upon exercise of outstanding options will be available for immediate resale in the U.S. in the open market.

Sales of our ~~Common~~common ~~Stock~~ stock as restrictions end or pursuant to registration rights may make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. These sales also could cause our stock price to fall and make it more difficult for you to sell shares of our ~~Common~~common ~~Stock~~stock.

Our failure to meet the continued listing requirements of Nasdaq could result in a de-listing of our common stock.

If we fail to satisfy the rules and continued listing requirements of Nasdaq, such as the ~~requires~~ requirements relating to corporate governance, shareholder approval, shareholders’ equity or our minimum closing bid price, Nasdaq will take steps to delist our common stock. Such a de-listing would likely have a negative effect on the price of our common stock and would impair stockholders’ ability to sell or purchase our common stock when they wish to do so, as well as adversely affect our ability to issue additional securities and obtain additional financing in the future. In the past, we have received deficiency letters relating to our minimum bid price, committee composition, and shareholders’ equity. While we have regained compliance with those requirements, there can be no assurance that we will remain in compliance or that Nasdaq will interpret shareholder approval requirements consistent with our interpretations.

The exercise of all or any number of outstanding warrants or the issuance of stock-based awards may dilute your holding of shares of our Common Stock.

We have issued several securities providing for the right to purchase our common stock. Investors could be subject to increased dilution upon the exercise of our warrants. A total of 7approximately 10.69 million warrants were issued and outstanding as of March 173, ~~2025~~2026.

Investors may experience dilution in the value of their investment upon the exercise of the warrants and any equity awards that may be granted or issued pursuant to the 2022 Omnibus Equity Incentive Plan.

Provisions in our articles of incorporation, our by-laws and Nevada law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our Common Stock.

Provisions of our articles of incorporation, our by-laws and Nevada law may have the effect of deterring unsolicited takeovers or delaying or preventing a change in control of our company or changes in our management, including transactions in which our stockholders might otherwise receive a premium for their shares over then current market prices. In addition, these provisions may limit the ability of stockholders to approve transactions that they may deem to be in their best interests. These provisions include:

●

the inability of stockholders to call special meetings; and

●

the ability of our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could include the right to approve an acquisition or other change in our control or could be used to institute a rights plan, also known as a poison pill, that would work to dilute the stock ownership of a potential hostile acquirer, likely preventing acquisitions that have not been approved by our board of directors.

The existence of the forgoing provisions and anti-takeover measures could limit the price that investors might be willing to pay in the future for shares of our Common Stock. They could also deter potential acquirers of our company, thereby reducing the likelihood that you could receive a premium for your Common Stock in an acquisition.

We are an “emerging growth company,” as defined in the JOBS Act, and a “smaller reporting company” within the meaning of the Securities Act, and we cannot be ~~certain~~ certain if the reduced disclosure requirements applicable to emerging growth companies or smaller reporting companies will make our Common ~~Stock~~ Stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (2) reduced disclosure obligations regarding executive compensation in this report and our periodic reports and proxy statements and (3) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In addition, as an emerging growth company, we are only required to provide two years of audited consolidated financial statements and two years of selected financial data in this report. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Common Stock held by non-affiliates exceeds $700 million as of any March 31 before that time or if we have total annual gross revenue of $1.0 billion or more during any fiscal year before that time, after which, in each case, we would no longer be an emerging growth company as of the following December 31 or, if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease to be an emerging growth company immediately.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited consolidated financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our shares of Common Stock ~~held~~ held by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our consolidated financial statements with other public companies difficult or impossible.

After we are no longer ana “smaller reporting company,” or “emerging growth company,” we expect to incur additional management time and cost to comply with the more stringent reporting requirements applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

We have not and do not expect to declare any dividends to our shareholders in the foreseeable future.

We have not and do not anticipate declaring any cash dividends to holders of our Common Stock in the foreseeable future. Consequently, investors may need to rely on sales of their Common Stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our Common Stock.

As a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting. These internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our Common Stock.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to annually furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. If we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which would have a material adverse effect on the price of our Common Stock.

WeGeneral ~~may~~Risk not be able to remediate the material weaknesses that we have identified to date or any future material weaknesses, or to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which would have a material adverse effect on the price of our Common Stock.Factors

WeIncreases ~~have identified material weaknesses~~ in ~~our internal control over financial reporting. If we are unable to remediate these material weaknesses~~costs, ordisruption ifof ~~we experience~~supply ~~additional material weaknesses in the future~~ or ~~otherwise~~shortage ~~fail to maintain an effective system~~ of ~~internal controls, we may~~raw ~~not~~materials becould ~~able~~harm ~~to accurately or timely requirements applicable to public companies, which may adversely affect investor confidence in us, and, as a result, the market price of~~ our ~~Common Stock~~business.

~~Our~~We ~~management~~may isexperience ~~responsible~~increases ~~for~~in ~~establishing~~the ~~and~~cost ~~maintaining~~or ~~adequate~~a ~~internal~~sustained ~~control~~interruption ~~over~~in ~~financial~~the ~~reporting~~supply ~~designed~~or toshortage ~~provide~~of ~~reasonable~~raw ~~assurance~~materials. ~~regarding the~~Any ~~reliability~~such ofincrease ~~financial~~or ~~reporting~~supply ~~and~~interruption ~~the~~could ~~preparation~~materially negatively ofimpact ~~consolidated~~our business, prospects, financial ~~statements~~condition ~~for~~and ~~external~~operating ~~purposes~~results. inWe ~~accordance~~use ~~with GAAP.~~various ~~Our~~raw ~~management~~materials isin ~~likewise~~our ~~required,~~business onincluding agricultural aproducts ~~quarterly~~that ~~basis,~~are subject to ~~evaluate~~supply ~~the~~shortages ~~effectiveness~~resulting offrom, ~~our~~among ~~internal~~other ~~controls~~factors, weather conditions and totariffs. ~~disclose~~The prices ~~any~~for ~~changes~~these ~~and~~raw ~~material~~materials ~~weaknesses~~fluctuate ~~identified~~depending ~~through~~on ~~such~~market ~~evaluation~~conditions inand ~~those~~global ~~internal~~demand ~~controls.~~for Athese ~~material~~materials ~~weakness~~and iscould aadversely ~~deficiency,~~affect our orbusiness ~~combination~~and ofoperating ~~deficiencies~~results. inSubstantial ~~internal~~increases ~~control~~in ~~over~~the ~~financial~~prices ~~reporting~~for ~~such~~our ~~that~~raw ~~there~~materials isincrease aour ~~reasonable~~operating ~~possibility~~costs ~~that~~and acould ~~material~~reduce ~~misstatement~~our ofmargins ~~our~~if ~~consolidated~~we ~~financial~~cannot ~~statements~~recoup ~~will~~the ~~not~~increased becosts ~~prevented~~through orincreased ~~detected~~prices onfor aour ~~timely~~products ~~basis~~and services.

AsLitigation ~~described~~may ~~elsewhere~~adversely ~~in this~~affect ~~Report~~our business, wefinancial condition ~~have~~and ~~identified~~results ~~the~~of ~~following material weaknesses:~~operations.

●From ~~lack~~time to time in the normal course of ~~technical~~our ~~expertise~~business operations, we may become subject to litigation involving intellectual property, data privacy and security, consumer protection, commercial disputes and other matters that may negatively affect our operating results if changes to our business operation are required. Moreover, parties may attempt to file claims against us in connection with lines of business that we have divested, and our ability to recover such amounts through indemnification may be limited. Due to our manufacturing and sale of our products, we may also be subject to a variety of claims including product warranty, product liability, and consumer protection claims related to product defects, among other litigation. We may also be subject to claims involving health and safety, hazardous materials usage, other environmental impacts, or service disruptions or failures. The cost to defend such litigation may be significant and may require a diversion of our resources. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition and results of operations. In addition, insurance may not cover existing or future claims, be sufficient to fully compensate us for one or more of such claims or continue to be available on terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby adversely affecting our results of operations and resulting in a reduction in the trading price of our stock.

●An ~~segregation~~active, liquid, and orderly trading market for our Common Stock may not develop, the price of ~~duties~~our stock may be volatile, and you could lose all or part of your investment.

●The ~~accounting~~trading ~~for~~price ~~complex~~of ~~financial~~our Common ~~transactions~~Stock may be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. Our stock price could be subject to wide fluctuations in response to a variety of factors, which include:

As● awhether ~~result~~we ofachieve ~~these material weaknesses,~~ our ~~management~~anticipated ~~concluded~~corporate ~~that our internal control over financial reporting was not effective as of December 31, 2024.~~objectives;

To● ~~respond~~actual toor ~~these~~anticipated ~~material weaknesses,~~fluctuations wein ~~have devoted, and plan to continue to devote, significant effort and resources to the remediation and improvement of~~ our ~~internal~~ ~~control~~quarterly ~~over~~or ~~financial~~annual ~~reporting.~~operating Our plans currently include rebuilding the internal finance function and engagement of external financial consultants. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.results;

~~Any~~● ~~failure~~changes to maintain internal control could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis. If our consolidated financial statements are not accurate, investors may not have a complete understanding of our operations and financial position. In either case, there could result a material adverse effect on our business. Ineffective internal controls could also cause investors to lose confidence in our ~~reported~~ financial ~~information~~or ~~which~~operational ~~could~~estimates ~~have~~or ~~a negative effect on the trading price of our stock.~~projections;

We● ~~can~~our ~~give~~ability ~~no assurance that the measures we have taken and plan~~ to ~~take in the future will remediate the material weaknesses identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to~~ implement ~~and maintain adequate internal control over financial reporting or circumvention of these controls. In addition, even if we are successful in strengthening~~ our ~~controls~~operational and procedures, in the future those controls, and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our consolidated financial statements.plans;

21● changes in the economic performance or market valuations of companies similar to ours; and

~~General~~● ~~Risk~~general ~~Factors~~economic or political conditions in the U.S. or elsewhere.

~~Increases~~In addition, the stock market in ~~costs~~general, ~~disruption~~and ofthe ~~supply~~market for cannabis and hemp-related companies, has experienced extreme price and volume fluctuations that have often been unrelated or ~~shortage~~disproportionate to the operating performance of ~~raw~~those ~~materials~~companies. Broad market and industry factors may seriously affect the market price of companies’ stock, including ours, regardless of actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could ~~harm~~result in substantial costs and a diversion of our ~~business~~management’s attention and resources.

We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. Any such an increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials in our business including agricultural products that are subject to supply shortages resulting from, among other factors, weather conditions and tariffs. The prices for these raw materials fluctuate depending on market conditions and global demand for these materials and could adversely affect our business and operating results. Substantial increases in the prices for our raw materials increase our operating costs and could reduce our margins if we cannot recoup the increased costs through increased prices for our products and services.21

~~Litigation~~We ~~may~~incur ~~adversely~~increased ~~affect~~costs ~~our~~and demands upon ~~business,~~management ~~financial~~as ~~condition~~a result of complying with the laws and ~~results~~regulations ofaffecting ~~operations~~public companies, which could adversely affect our operating results.

~~From~~As ~~time~~a topublic ~~time in the normal course of our business operations~~company, we incur ~~may~~significant ~~become subject to litigation involving intellectual property~~legal, ~~data privacy and security~~accounting, ~~consumer~~ ~~protection, commercial disputes~~ and other ~~matters~~expenses, ~~that~~including ~~may~~costs ~~negatively~~associated ~~affect~~with ~~our~~public ~~operating~~company ~~results~~reporting ifand ~~changes~~corporate ~~to our business~~governance ~~operation are required~~requirements. ~~Moreover,~~These ~~parties~~requirements ~~may~~include ~~attempt~~compliance towith ~~file~~Section ~~claims~~404 ~~against~~and usother inprovisions ~~connection with lines~~ of ~~business~~the ~~that~~Sarbanes-Oxley ~~we have divested~~Act, ~~and~~ ~~our~~as ~~ability~~well toas ~~recover~~rules implemented ~~such~~by ~~amounts~~the ~~through~~Securities ~~indemnification may be limited. Due to our manufacturing~~ and ~~sale~~Exchange ~~of our products~~Commission, ~~may also~~or ~~be subject to a variety of claims including product warranty~~(“SEC”), ~~product liability,~~ and ~~consumer protection claims related to product defects, among other litigation~~Nasdaq. We ~~may~~expect ~~also~~complying bewith ~~subject~~these torules ~~claims involving health~~ and ~~safety, hazardous materials usage, other environmental~~regulations ~~impacts,~~will orsubstantially ~~service~~increase ~~disruptions~~our orlegal ~~failures.~~and ~~The~~financial ~~cost~~compliance tocosts, ~~defend~~make ~~such~~some ~~litigation~~activities ~~may~~more bedifficult, ~~significant~~time-consuming ~~and~~or ~~may~~costly ~~require a diversion of our~~and ~~resources. There also~~ may beplace ~~adverse~~undue ~~publicity~~strain ~~associated~~on ~~with litigation that could negatively affect customer perception of~~ our ~~business~~personnel, ~~regardless~~ ofsystems ~~whether~~and ~~the allegations are valid or whether we are ultimately found liable. As a result~~resources, ~~litigation~~which ~~may~~could adversely affect our business, financial condition and results ~~of operations. In addition, insurance may not cover existing or future claims, be sufficient~~ ~~to fully compensate us for one or more~~ of such claims or continue to be available on terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby adversely affecting our results of operations ~~and resulting in a reduction in the trading price of our stock~~.

AnAs ~~active,~~a ~~liquid~~public company, we also expect that it may be more difficult and ~~orderly~~more ~~trading~~expensive ~~market~~ for ~~our~~us ~~Common~~to ~~Stock~~obtain ~~may~~director ~~not~~and ~~develop~~officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the ~~price~~same ofor ~~our~~similar ~~stock~~coverage. As a result, it may be ~~volatile,~~more difficult for us to attract and ~~you~~retain ~~could~~qualified ~~lose~~individuals ~~all~~to orserve ~~part~~on our board of ~~your~~directors ~~investment~~or as our executive officers.

~~The~~Data ~~trading~~privacy ~~price~~and ofsecurity ~~our~~concerns relating ~~Common~~to ~~Stock~~our ~~may~~technology beand ~~highly~~our ~~volatile~~practices ~~and~~ could bedamage ~~subject~~our toreputation, ~~wide~~cause ~~fluctuations~~us ~~in response~~ to ~~various~~incur ~~factors~~significant liability, ~~some~~and ofdeter ~~which~~current ~~are~~and ~~beyond~~potential users or customers from using our ~~control~~products and services. ~~Our~~Software ~~stock~~bugs ~~price~~or ~~could~~defects, besecurity ~~subject~~breaches, toand ~~wide~~attacks ~~fluctuations~~on our systems could result in ~~response~~the toimproper adisclosure ~~variety~~and use of ~~factors~~user data and interference with our users and customers’ ability to use our products and services, ~~which~~harming ~~include:~~our business operations and reputation.

●Concerns ~~whether~~about weour ~~achieve~~practices with regard to the collection, use, disclosure, or security of personal information or other data-privacy-related matters, even if unfounded, could harm our ~~anticipated~~reputation, ~~corporate~~financial ~~objectives;~~condition, and operating results. Our policies and practices may change over time as expectations regarding privacy and data change. Our products and services involve the storage and transmission of proprietary information, and bugs, theft, misuse, defects, vulnerabilities in our products and services, and security breaches expose us to a risk of loss of this information, improper use and disclosure of such information, litigation, and other potential liability. Systems and control failures, security breaches and/or inadvertent disclosure of user data could result in government and legal exposure, seriously harm our reputation and brand and, therefore, our business, and impair our ability to attract and retain customers.

●We ~~actual~~may experience cyber-attacks and other attempts to gain unauthorized access to our systems. We may experience future security issues, whether due to employee error or ~~anticipated~~malfeasance ~~fluctuations~~or system errors or vulnerabilities in our ~~quarterly~~or other parties’ systems, which could result in significant legal and financial exposure. We may be unable to anticipate or ~~annual~~detect ~~operating~~attacks or vulnerabilities or implement adequate preventative measures. Attacks and security issues could also compromise trade secrets and other sensitive information, harming our business. As a result, we may suffer significant legal, reputational, or financial exposure, which could harm our business, financial condition, and operating results;.

●If ~~changes~~our inshares ~~our~~of ~~financial~~Common orStock ~~operational~~become ~~estimates~~subject orto ~~projections;~~the penny stock rules, it would become more difficult to trade our shares.

●The ~~our~~SEC ~~ability~~has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to ~~implement~~transactions in such securities is provided by the exchange or system. If we do not retain a listing on Nasdaq and if the price of our ~~operational~~Common ~~plans~~Stock is less than $5.00, our Common Stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling their shares.

~~● changes in the economic performance or market valuations of companies similar to ours; and~~22

●The ~~general~~financial ~~economic~~and oroperational ~~political~~projections ~~conditions~~that inwe ~~the~~may ~~U.S.~~make orfrom time ~~elsewhere~~to time are subject to inherent risks.

22The projections that our management may provide from time to time (including, but not limited to, those relating to potential peak sales amounts, production, and supply dates, and other financial or operational matters) reflect numerous assumptions made by management, including assumptions with respect to our specific as well as general business, economic, market and financial conditions and other matters, all of which are difficult to predict and many of which are beyond our control. Accordingly, there is a risk that the assumptions made in preparing the projections, or the projections themselves, will prove inaccurate. There will be differences between actual and projected results, and actual results may be materially different from those contained in the projections. The inclusion of the projections in this report should not be regarded as an indication that we or our management or representatives considered or consider the projections to be a reliable prediction of future events, and the projections should not be relied upon as such.

InIf ~~addition,~~securities ~~the stock market in general, and the market for cannabis and hemp-related companies, has experienced extreme price and volume fluctuations that have often been unrelated~~ or ~~disproportionate to the operating performance of those companies. Broad market and~~ industry ~~factors~~analysts ~~may~~do ~~seriously affect~~not ~~the~~publish ~~market~~research ~~price~~or ofreports ~~companies’~~about ~~stock~~us, ~~including~~our ~~ours~~business, ~~regardless~~or ofour ~~actual operating performance. In addition~~market, inor ~~the~~if ~~past,~~they ~~following periods~~change oftheir ~~volatility~~recommendations inregarding ~~the~~our ~~overall~~stock ~~market and the market price of a particular company’s securities~~adversely, ~~securities class action~~ ~~litigation~~our ~~has~~stock ~~often~~price ~~been~~and ~~instituted~~trading ~~against~~volume ~~these companies. This litigation, if instituted against us,~~ could ~~result in substantial costs and a diversion of our management’s attention and resources~~decline.

WeThe ~~incur~~trading ~~increased~~market ~~costs~~for our Common Stock will be influenced by the research and ~~demands~~reports ~~upon~~that industry or securities analysts may publish about us, our business, ~~management~~our asmarket aor ~~result~~our ofcompetitors. ~~complying~~If ~~with~~any of the ~~laws~~analysts ~~and~~who ~~regulations~~may ~~affecting~~cover ~~public~~us ~~companies,~~change ~~which~~their ~~could~~recommendation regarding our stock adversely, ~~affect~~or provide more favorable relative recommendations about our ~~operating~~competitors, our stock price would likely decline. If any analyst who may cover ~~results~~us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

As a public company, we incur significant legal, accounting, and other expenses that we did not incur as a private company, including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act, as well as rules implemented by the Securities and Exchange Commission, or (“SEC”), and Nasdaq. We expect complying with these rules and regulations will substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly.

The increased costs associated with operating as a public company will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products or services. Additionally, if these requirements divert our management’s attention from other business concerns, they could have a material adverse effect on our business, financial condition, and operating results.

As a public company, we also expect that it may be more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers.

Data privacy and security concerns relating to our technology and our practices could damage our reputation, cause us to incur significant liability, and deter current and potential users or customers from using our products and services. Software bugs or defects, security breaches, and attacks on our systems could result in the improper disclosure and use of user data and interference with our users and customers’ ability to use our products and services, harming our business operations and reputation.

Concerns about our practices with regard to the collection, use, disclosure, or security of personal information or other data-privacy-related matters, even if unfounded, could harm our reputation, financial condition, and operating results. Our policies and practices may change over time as expectations regarding privacy and data change. Our products and services involve the storage and transmission of proprietary information, and bugs, theft, misuse, defects, vulnerabilities in our products and services, and security breaches expose us to a risk of loss of this information, improper use and disclosure of such information, litigation, and other potential liability. Systems and control failures, security breaches and/or inadvertent disclosure of user data could result in government and legal exposure, seriously harm our reputation and brand and, therefore, our business, and impair our ability to attract and retain customers.

We may experience cyber-attacks and other attempts to gain unauthorized access to our systems. We may experience future security issues, whether due to employee error or malfeasance or system errors or vulnerabilities in our or other parties’ systems, which could result in significant legal and financial exposure. We may be unable to anticipate or detect attacks or vulnerabilities or implement adequate preventative measures. Attacks and security issues could also compromise trade secrets and other sensitive information, harming our business. As a result, we may suffer significant legal, reputational, or financial exposure, which could harm our business, financial condition, and operating results.

If our shares of Common Stock become subject to the penny stock rules, it would become more difficult to trade our shares.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on Nasdaq and if the price of our Common Stock is less than $5.00, our Common Stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling their shares.

The financial and operational projections that we may make from time to time are subject to inherent risks.

The projections that our management may provide from time to time (including, but not limited to, those relating to potential peak sales amounts, production, and supply dates, and other financial or operational matters) reflect numerous assumptions made by management, including assumptions with respect to our specific as well as general business, economic, market and financial conditions and other matters, all of which are difficult to predict and many of which are beyond our control. Accordingly, there is a risk that the assumptions made in preparing the projections, or the projections themselves, will prove inaccurate. There will be differences between actual and projected results, and actual results may be materially different from those contained in the projections. The inclusion of the projections in this report should not be regarded as an indication that we or our management or representatives considered or consider the projections to be a reliable prediction of future events, and the projections should not be relied upon as such.

If securities or industry analysts do not publish research or reports about us, our business, or our market, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline.

The trading market for our Common Stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, our stock price would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

Item 1B. Unresolved Staff Comments.

None

Item 1C. Cybersecurity

Risk Management

We have implemented practices to assess risks from cybersecurity threats; monitor our information systems for potential vulnerabilities; and test those systems pursuant to our cybersecurity policies, processes, and practices, which are integrated into our overall risk management program. To protect our information systems from cybersecurity threats, we rely on various security tools that are designed to help identify, escalate, investigate, resolve, and recover from security incidents in a timely manner. We have chosen Microsoft Corporation as our main provider for Cybersecurity and Governance services. Our technology management team ~~assesses~~and Audit Committee assess risks based on probability and potential impact to key business systems and processes. Risks that are considered high are addressed promptly and documented to be incorporated into our overall risk management program. A mitigation plan is developed for each identified high risk, with progress reported to the technology management team and tracked as part of our overall risk management program overseen by Board and its Audit Committee.

To date, cybersecurity threats, including those resulting from any previous cybersecurity incidents, have not materially affected our Company, including our business strategy, results of operations, or financial condition. We do not believe that cybersecurity threats resulting from any previous cybersecurity incidents of which we are aware are reasonably likely to materially affect our Company.

Governance

Our Board oversees our risk management process, including as it pertains to cybersecurity risks, directly and through its committees. The Audit Committee of the board oversees our risk management program, which focuses on the most significant risks we face in the short-, intermediate-, and long-term timeframe. The Audit Committee reviews our cybersecurity risk profile with management on a periodic basis using key performance and/or risk indicators. These key performance indicators are metrics and measurements designed to assess the effectiveness of our cybersecurity program in the prevention, detection, mitigation, and remediation of cybersecurity incidents.

We take a risk-based approach to cybersecurity and have implemented cybersecurity policies throughout our operations that are designed to address cybersecurity threats and incidents.

Item 2. Properties.

Our corporate headquarters is in ~~Troy~~Rolling Meadows, ~~Michigan~~Illinois where we occupy ~~approximately~~corporate ~~15,825~~office ~~square~~space. ~~feet~~We ofoperate ~~office,~~an ~~warehousing, and~~ asset-light ~~industrial~~business ~~space~~model ~~under~~and ado ~~lease that~~not ~~expires~~own inany ~~2026~~real property. We ~~lease~~do ~~properties~~not ~~located~~have ~~within~~any ~~various~~material ~~geographic~~property ~~regions~~leases, inand ~~which~~ we ~~conduct~~rely ~~business.~~on ~~All~~third-party ofmanufacturers, ~~our~~distributors, ~~facilities~~and service providers ~~are~~to ~~leased~~support our operations.

WeAs ~~believe~~previously ~~our facilities~~disclosed, ~~are~~the ~~adequate~~Company’s lease for ~~our~~office ~~needs~~space ~~and~~in ~~believe~~Troy, ~~that~~Michigan wewas ~~should~~scheduled beto ~~able~~expire toin ~~renew~~2026. ~~any~~In ofMarch ~~our~~2025, ~~existing~~the ~~leases~~Company orterminated ~~secure~~the lease ~~similar~~prior ~~property~~to ~~without an~~its ~~adverse~~scheduled expiration. The termination did not have a material impact on ~~our~~the ~~operations~~Company’s consolidated financial statements.

Item 3. Legal Proceedings.

From time to time, we are a party to various legal proceedings or claims arising in the ordinary course of business. For information related to significant legal proceedings in which we are involved, see the discussion under the caption Legal Matters in Note 1823 - Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form ~~10K~~10-K, which information is incorporated by reference into this Item 3.

Item 4. Mine Safety Disclosures.

Not applicable.

2524

PART II

Market Information

Our Common Stock is traded on the Nasdaq Capital Market under the symbol “~~AGFY~~RYM.”

Holders of Record

As of March 153, ~~2025~~2026, ~~there~~ there were 5553 holders of record of our Common Stock. Such numbers do not include beneficial owners holding shares of our Common Stock in nominee or “street” name through various brokerage firms.

Dividends

We have never paid cash dividends on any of our capital stock and currently intend to retain our future earnings, if any, to fund the development and growth of our business.

Equity Repurchases

None.

Recent Sales of Unregistered Securities

There were no sales of unregistered securities during the year ended December 31, ~~2024~~2025 that were not previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q.

Item 6. [Reserved].

2625

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of our operations together with our consolidated financial statements and the notes thereto appearing elsewhere in this report. This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors,” “Cautionary Statement regarding Forward-Looking Statements” and elsewhere in this report.

Overview

~~Agrify~~RYTHM is a developer of branded innovative solutions for the cannabis and hemp industries. The Company’s portfolio of consumer-packaged goods brands includes RYTHM, incredibles, Dogwalkers, Beboe, &Shine, Doctor Solomon’s, Good Green and Señorita. Our Señorita brand offers consumers hemp-derived tetrahydrocannabinol (“THC”) beverages ~~that~~and ~~mirror~~are sold at top retailers, online and through direct-to-retail partnerships. The Señorita brand mirrors well-known cocktails like a margarita – in ~~three~~four flavors – classic Lime Jalapeño Margarita, Mango Margarita, Paloma and ~~Paloma~~Ranch Water. Known for its clean, fresh taste and commitment to high-quality, natural ingredients, Señorita offers a low-sugar, low-calorie alternative to alcoholic beverages and is available in fifteen U.S. states and Canada including at top retailers ~~including~~such as Total Wine, ABC Fine Wine & Spirits, and Binny’s. The RYTHM branded beverage comes in ~~nine~~two Ufruit-driven flavors with effect-based ingredients.S. ~~states~~Other hemp-derived products including incredibles and ~~Canada,~~Beboe ~~with~~edible ~~plans~~products ~~for~~are ~~expansion~~primarily sold online and ~~future~~through ~~availability~~direct-to-retail inpartnerships. ~~premier~~In onaddition to the sale of hemp-~~premises~~derived ~~destinations~~products (“Non-licensing Revenue”), the Company licenses its brands to be manufactured and distributed in exchange for a licensing fee (“Licensing Revenue”).

InRYTHM ~~addition to beverages, Agrify~~ has also historically been a leading provider of innovative cultivation and extraction solutions for the cannabis industry. ~~Our~~Prior to the exit of the extraction business on March 30, 2025, the Company’s comprehensive extraction product line (“the Extraction Business”), which included ~~includes~~ hydrocarbon, alcohol, solventless, post-processing, and lab equipment, ~~empowers~~ empowered cannabis producers to maximize the quantity and quality of extract required for premium concentrates. Additionally, prior to its sale on December 31, 2024, ~~our~~the ~~proprietary~~Company’s proprietary micro-environment-controlled Agrify Vertical Farming Units (“VFUs”) enabled cultivators to produce high quality products for the cannabis industry (“the Cultivation Business”). As the discontinuation of the Extraction Business and the sale of the Cultivation Business represented strategic shifts that had a major effect on our operations and financial results, they have been presented in discontinued operations separate from continuing operations for the years ended December 31, 2025 and 2024 in the Company’s consolidated statements of operations and applicable footnotes in accordance with ASC 205, Presentation of Financial Statements. Please refer to Item 1 and the notes to the consolidated financial statements for details on recent developments and significant transactions during the period.

Agrify was incorporated in the state of Nevada on June 6, 2016, originally incorporated as Agrinamics, Inc. (or “Agrinamics”). On September 16, 2019, Agrinamics amended its articles of incorporation to reflect a name change to Agrify Corporation.

Reverse Stock Splits

On July 5, 2023, we effected a 1-for-20 reverse stock split of our common stock. All share and per share information has been retroactively adjusted to give effect to the reverse stock split for all periods presented unless otherwise indicated.

On October 8, 2024, we effected a 1-for-15 reverse stock split of our common stock. All share and per share information has been retroactively adjusted to give effect to the reverse stock splits for all periods presented unless otherwise indicated.

No fractional shares of common stock were issued as a result of these reverse stock splits. Any fractional shares in connection with these reverse stock splits were rounded up to the nearest whole share and no stockholders received cash in lieu of fractional shares. The reverse stock splits had no impact on the number of shares of common stock that we are authorized to issue pursuant to our articles of incorporation or on the par value per share of the common stock. Proportional adjustments were made to the number of shares of Common Stock issuable upon exercise or conversion of our outstanding stock options and warrants, the exercise price or conversion price (as applicable) of our outstanding stock options and warrants, and the number of shares reserved for issuance under our equity incentive plan. All share and per share information included in this Annual Report on Form 10-K has been retroactively adjusted to reflect the impact of these reverse stock splits.

Recent Developments

February 2025 Changes in Directors

On February 5, 2025 the Company announced that Peter Shapiro and Sanjay Tolia were appointed to our Board of Directors (the “Board”) effective January 31, 2025. The Company also announced Richard Drexler’s departure from the Board effective as of January 31, 2025.

Public Offering

On February 27, 2024, we entered into a placement agency agreement with Alexander Capital, LP as placement agent, pursuant to which we agreed to issue and sell an aggregate of 184,000 shares of Common Stock, and, in lieu of Common Stock to certain investors that so chose, Pre-Funded Warrants (“Pre-Funded Warrants”) to purchase 264,245 shares of Common Stock. The public offering price for each share of Common Stock was $5.70, and the offering price for each Pre-Funded Warrant was $5.69, which equals the public offering price per share of the Common Stock, less the $0.001 per share exercise price of each Pre-Funded Warrant. The Offering was made pursuant to a registration statement on Form S-1 that we filed with the SEC on January 26, 2024 and was declared effective on February 14, 2024. Raymond Chang, our former Chairman and Chief Executive Officer, participated in the offering on the same terms as other investors. The net proceeds from the public offering were approximately $2.2 million, after deducting placement agent fees and commissions and expenses. The public offering closed on February 28, 2024.

Debt Modification; Warrant Amendments

On May 21, 2024, we and CP entered into an amendment to the Convertible Note (the “Consolidated Note Amendment”), pursuant to which CP could elect, in lieu of shares of Common Stock issuable upon conversion of the Convertible Note, to instead receive Pre-Funded Warrants. The conversion price applicable to the Pre-Funded Warrants remained unchanged at $21.90. Immediately following the execution of the Consolidated Note Amendment, CP elected to convert $11.5 million of outstanding principal into a Pre-Funded Warrant exercisable at issuance for up to 525,114 shares of Common Stock having a fair value of approximately $2.9 million (the “CP Warrant Conversion”).

On May 21, 2024, we and GIC Acquisition, LLC (“GIC”), the holder of an unsecured promissory note (the “GIC Note”), amended and restated the GIC Note (the “Restated GIC Note”) to increase the aggregate principal amount to approximately $2.29 million, extend the maturity date to December 31, 2025, and provide that the Restated Junior Note may be converted into Common Stock of the Company or, at GIC’s election, Pre-Funded Warrants, in each case at a conversion price of $4.65. Immediately following the execution of the Restated GIC Note, GIC elected to convert all of the outstanding principal under the Restated GIC Note into a Pre-Funded Warrant exercisable at issuance for up to 492,204 shares of Common Stock having a fair value of approximately $2.7 million (the “GIC Warrant Conversion”, and, collectively with the CP Warrant Conversion, the “Related Party Warrant Conversions”).

On June 30, 2024, we executed an amendment to the Pre-Funded Warrants, pursuant to which we revised certain provisions of the Pre-Funded Warrants to (i) remove the adjustment to the exercise price of the Pre-Funded Warrants when there is a bona fide equity financing with the primary purpose of raising capital (the “Adjustment Provisions”) and (ii) increase the threshold for a change of control from 50% to greater than 50%. On August 12, 2024, our stockholders approved a proposal to amend the Pre-Funded Warrants to add the Adjustment Provisions at a future date. Pursuant to that approval, on August 28, 2024, we entered into amendments to the Pre-Funded Warrants to insert the Adjustment Provisions. As a result of the warrant amendments and the subsequent issuance of 189,645 shares of Common Stock to Ionic Ventures, LLC (“Ionic”) at an effective purchase price of approximately $2.109 per share of Common Stock, the number of shares of Common Stock underlying the Pre-Funded Warrant held by CP was adjusted to 5,452,288 and the number of shares of Common Stock underlying the Pre-Funded Warrant held by GIC was adjusted to 1,085,122. On August 30, 2024, CP partially exercised its Pre-Funded Warrant and entities affiliated with Mr. Chang and Ms. Chan received an aggregate of 383,127 shares of Common Stock upon the exercise. On September 27, 2024, we further amended the Pre-Funded Warrants to remove the Adjustment Provisions from each warrant and (ii) preventing the holders from any additional exercise of either of the Pre-Funded Warrants at any time between September 27, 2024 and October 9, 2024.

Change in Accounting Firm

On June 20, 2024 after an evaluation process, the Audit Committee of our Board (the “Audit Committee”) dismissed Marcum LLP as our independent registered public accounting firm and appointed MATSUURA (“Matsuura”) as our independent registered public accounting firm for the fiscal year ending December 31, 2024, in each case effective as of June 25, 2024. On June 30, 2024, the audit practice of Matsuura was combined in a transaction pursuant to which Matsuura merged its operations with GuzmanGray, a professional corporation (“GuzmanGray”). On July 19, 2024, Matsuura resigned as our auditors and the Audit Committee appointed GuzmanGray as our independent registered public accounting firm effective as of the Effective Date.

Equity Line of Credit Facility

On August 28, 2024, we entered into the Purchase Agreement and a registration rights agreement with Ionic pursuant to which Ionic committed to purchase up to an aggregate of $15.0 million of our Common Stock, subject to certain limitations, from time to time and at our sole discretion over the 36-month term of the Purchase Agreement.

From and after the date the registration statement relating to the resale of the shares sold to Ionic was declared effective, November 5, 2024, we may from time to time on any business day, by written notice delivered by us to Ionic, direct Ionic to purchase between $250,000 and $750,000 of shares of Common Stock on such business day, at a purchase price per share that will be equal to 93% (or 80% if the Common Stock is not then trading on the Nasdaq Capital Market) of the lowest daily VWAP over a specified measurement period beginning after the delivery of the purchase notice, as described further in the Purchase Agreement (each, a “Regular Purchase”). The Purchase Agreement also permitted us to deliver an exemption purchase notice for $400,000 on the date of signing, with the shares so purchased to be delivered following the Commencement Date, and we delivered an exemption purchase notice for $400,000 for the purchase by Ionic of 189,645 shares of Common Stock. On November 5, 2024, we issued 189,645 shares of Common Stock to Ionic. We will control the timing and amount of any sales of Common Stock to Ionic pursuant to the Purchase Agreement. Ionic has no right to require us to sell any shares of Common Stock to Ionic, but Ionic is obligated to make purchases as we direct, subject to certain conditions.

Sale of Cultivation Business

On December 31, 2024, we entered into and closed an Asset Purchase Agreement (the “Cultivation Purchase Agreement”) with CP Acquisitions, LLC (“CP”), an entity affiliated with Raymond Chang, our former Chairman and Chief Executive Officer. Under the Cultivation Purchase Agreement, CP acquired assets from us relating to our VFUs, including the related Agrify total-turnkey (“TTK”) solution assets and Agrify InsightsTM software solutions (collectively the “Cultivation Business”). The aggregate consideration received by us for the sale of the Cultivation Business consisted of the assumption by CP of (i) all of our obligations pursuant to secured indebtedness then due CP with an aggregate amount of principal and accrued interest of approximately $7 million, and (ii) certain other liabilities relating to the Cultivation Business.

Señorita Acquisition

On December 12, 2024, we completed the acquisition of substantially all of the assets of Double or Nothing, LLC (“Double or Nothing”) in connection with its Señorita brand of beverages hemp-derived containing cannabinoids. Under the Purchase Agreement, we acquired the Señorita brand of beverages and related assets from Double or Nothing relating to the portions of its business operating in compliance with Canadian law and under the Agricultural Improvement Act of 2018 (the “2018 Farm Bill”) and applicable state laws.

Private Placement

On November 20, 2024, we raised gross proceeds of approximately $25.9 million in a private placement following the closing of certain securities purchase agreements with institutional investors and other accredited investors. In connection with the private placement, we issued (i) 203,988 shares Common Stock and (ii) pre-funded warrants to purchase up to an aggregate of 949,515 shares of Common Stock at a purchase price per share of Common Stock of $22.30 and a purchase price per pre-funded warrant of $22.2999.

Convertible Note

On November 5, 2024, we issued a Secured Convertible Note (the “Note”) to RSLGH, LLC (the “Investor”), a subsidiary of Green Thumb Industries Inc. (“Green Thumb”). The Note is a secured obligation and ranks senior to all of our indebtedness except for certain indebtedness set forth in the Note. The Note will mature on November 5, 2025 (the “Maturity Date”) and contains a 10.0% annualized interest rate, with interest to be paid on the first calendar day of each September and March while the Note is outstanding, in cash, beginning January 1, 2025. The principal amount of the Note will be payable on the Maturity Date.

2024 Board and Management Changes

Also on November 5, 2024, immediately following the issuance of the Note, Raymond Chang, our prior CEO and Chairman, resigned as a member of the Board and any subsidiaries and as President and Chief Executive Officer of the Company, and I-Tseng Jenny Chan resigned as a member of the Board. Benjamin Kovler, Armon Vakili and Richard Drexler replaced Raymond Chang and I-Tseng Jenny Chan on the Board and Benjamin Kovler assumed the position of Interim CEO.

Effective May 17, 2024, Leonard Sokolow resigned as a member of the Board and its committees. Effective December 3, 2024, Brian Towns resigned from his roles as the Company’s Executive Vice President and General Manager of Extraction Division to pursue other opportunities. On December 31, 2024, in connection with the Cultivation Purchase Agreement, David Kessler ceased serving as the Company’s Chief Science Officer, Executive Vice President and General Manager of Cultivation.

Lines of Business

Hemp-Derived Beverages

The Company acquired the Señorita brand of hemp-derived beverages in November 2024. Señorita was designed and formulated by world-class winemakers Charles Bieler and Joel Gott. Recognizing a growing generational demand for adult beverage alternatives, Bieler and Gott gave the classic margarita a modern twist—replacing alcohol with hemp-derived to create a delightful, hangover-free beverage alternative. Through the use of all-natural, premium ingredients like organic Mexican agave, fresh lime juice and sweet, tangy mango, Señorita quickly gained acclaim, taking home the top spot in The High Times Cannabis Cup just one year after inception. Gott and Bieler continue to collaborate on the brand with Mr. Kovler and the Agrify team.

Señorita currently offers three award-winning flavors – classic Lime Jalapeño Margarita, Paloma, and Mango Margarita. A fourth flavor, low-calorie Ranch Water, is expected to debut in 2025. Señorita’s hemp-derived beverages are currently available at top retailers including Total Wine, ABC Fine Wine & Spirits, and Binny’s in nine U.S. states and Canada. Products are also available for direct-to-consumer purchase where permissible under state law at senoritadrinks.com.

Extraction Solutions

We strategically acquired four of the top brands in the extraction space in late 2021 and early 2022 in Precision Extraction, PurePressure, Lab Society, and Cascade Sciences. These iconic brands encompass everything from hydrocarbon, alcohol, and solventless extraction to distillation and post-processing. Combined, these four acquisitions provide what we believed to be one of the most comprehensive extraction solutions from a single provider. Our extraction brands provide equipment and solutions for extraction, post-processing, and testing for the cannabis and hemp industries. The extraction, post-processing and testing services are complementary and highly attractive areas of the supply chain.

Discontinued Operations

Cultivation Solutions

Prior to its sale on December 31, 2024, we sold proprietary cultivation solutions to independent licensed cultivators. The two primary products we sold were the VFUs and Agrify Insights™ software.

The proprietary VFU technology offered a modular, compartmentalized micro-climate growing system for indoor vertical farming. The VFU system was designed for craft farmers, single-state operators, and multi-state operators who were looking to consistently produce higher-quality crops at scale. The VFUs were designed to line up horizontally in rows, and could be stacked vertically up to three units tall.

The VFUs were designed to work in conjunction with the Agrify Insights™ software. Each VFU sold included a license for Agrify Insights™ and a monthly Software-as-a-Service (“SaaS”) subscription fee was charged per VFU. The VFU could not operate successfully without Agrify Insights™, and we typically charged between $1,500 to $2,400 per VFU sold annually. Agrify Insights™ license agreements were generally for a multi-year term, with an annual auto-renewal.

TTK Solution

The Company’s TTK Solution was the industry’s first-of-its-kind program in which the Company engaged with qualified cannabis operators in the early phases of their business plans and provides critical support, typically over a 10-year period, which includes: access to capital for construction costs, the design and build-out of their cultivation and extraction facilities, state-of-the-art cultivation and extraction equipment, subscription to the Company’s Agrify Insights™, process design, training, implementation, proven grow recipes, product formulations, data analytics, and consumer branding. While we have not entered into any new TTK Solutions since January 1, 2024 and will not in the future, we have previously deployed this program with certain key former customers. The data-driven TTK Solution for cultivation solutions enabled our customers to get to market faster by providing them with seamlessly integrated hardware and software offerings as well as access to capital and a wide range of associated services from experts including consulting, training, design, engineering, and construction.

Note Amendment, Consolidation and Conversion

On January 25, 2024, following stockholder approval at an annual meeting of stockholders on January 8, 2024, we and CP consolidated the outstanding principal and interest due under the junior secured promissory note (the “Junior Secured Note”) to CP and a promissory note with an original principal amount of $35.0 million (the “Exchange Note”) to High Trail Special Situations LLC (the “Original Lender”) into a convertible note (the “Convertible Note”) and amended and restated the Convertible Note (as amended and restated, the “Restated Note”), with an outstanding principal amount of approximately $18.3 million at the time of issuance of the Restated Note. The Restated Note amended the terms of the Convertible Note by, among other things, (i) reducing the conversion price to $1.46 per share of our “Common Stock”), (ii) increasing the beneficial ownership limitation to 49.99% with respect to any individual or group, provided that CP could assign its right to receive shares upon conversion to Raymond Chang, our former Chairman and Chief Executive Officer and/or I-Tseng Jenny Chan, a former member of the Board, or their affiliates, in which case the 49.99% beneficial ownership limitation would have applied to each of them individually, (iii) extending the maturity date to December 31, 2025, (iv) increasing the interest rate from 9% to 10% per annum, (v) increasing the default interest from 15% to 18% per annum, and (vi) providing for the payment of interest every six months, or in lieu of cash interest payments, we could issue shares of our Common Stock as payments-in-kind at a conversion price equal to the higher of (i) $1.46 or (ii) a 20% discount to our trailing seven-day volume weighted average price as of the date of interest payment. Immediately following the execution of the Restated Note, CP immediately elected to convert approximately $3.9 million of outstanding principal into an aggregate of 178,108 shares of Common Stock, and assigned its rights to receive such shares to entities affiliated with Mr. Chang and Ms. Chan. Following the conversion, there was $15.0 million in principal amount outstanding under the Restated Note. In connection with the sale of the Cultivation Business on December 31, 2024, CP assumed all of our obligations under the Restated Note.

Issuance of Junior Note

On August 14, 2024, we issued the 2024 CP Note to CP. Pursuant to the 2024 CP Note, CP would lend up to $1,500,000 to the Company. The 2024 CP Note bore interest at a rate of 10% per annum, would mature in full on July 1, 2025, and could be prepaid without any fee or penalty. The 2024 CP Note was secured by our assets and ranked junior to existing secured indebtedness. The 2024 CP Note could have been converted into Common Stock of the Company or, at CP’s election, Pre-Funded Warrants with an exercise price of $0.001 per share, in each case at a conversion price of $3.9495. In connection with the sale of the Cultivation Business on December 31, 2024, CP assumed all of our obligations under the 2024 CP Note.

Mack Molding Modification Agreement

On October 27, 2023, and effective as of October 18, 2023, we entered into a Modification and Settlement Agreement (the “Modification Agreement”) with Mack Molding Company (“Mack”) with respect to a dispute with Mack under an existing supply agreement. On February 29, 2024, we met our contractual obligations under the terms of the Modification Agreement. In settlement of the dispute, we made cash payments of $500,000 and $250,000 to Mack and issued to Mack a warrant to purchase 750,000 shares of Common Stock.

On August 30, 2024, we entered into an amendment to the Modification Agreement with Mack, which modified the payment terms and VFU purchase requirements under the Modification Agreement. Pursuant to the amendment, we agreed to make payments of $1.0 million prior to October 31, 2024 and an additional $1.0 million prior to December 31, 2024. We also agreed to purchase at least 25 VFUs prior to October 31, 2024 and a further 25 VFUs between November 1, 2024 and December 31, 2024. As a precursor to the sale of the Cultivation Business on December 31, 2024, this agreement was settled on December 16, 2024 and the corresponding warrants issued to Mack were terminated.

Convertible Note Amendment

On October 18, 2024, we entered into an amendment with CP to the 2024 CP Note, pursuant to which the maximum principal sum of the 2024 CP Note was increased from $1,500,000 to $3,000,000. The conversion price applicable to the 2024 CP Note remained unchanged with an exercise price of $0.001 per share, in each case at a conversion price of $3.9495 (as may be adjusted per the 2024 CP Note). In connection with the sale of the Cultivation Business on December 31, 2024, CP assumed all of our obligations under the 2024 CP Note.

Nasdaq Compliance

On January 19, 2023, we received a deficiency letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market, LLC (“Nasdaq”) notifying us that, for the previous 30 consecutive business days, the bid price for our Common Stock had closed below $1.00 per share, which is the minimum closing price required to maintain a continued listing on The Nasdaq Capital Market under the Minimum Bid Requirement. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we had 180 calendar days to regain compliance with the Minimum Bid Requirement. To regain compliance with the Minimum Bid Requirement, the closing bid price of our Common Stock must be at least $1.00 per share for a minimum of 10 consecutive trading days during this 180-day compliance period, unless the Staff exercises its discretion to extend the minimum trading day period pursuant to Nasdaq Listing Rule 5810(c)(3)(G). On July 19, 2023, we received a notice from Nasdaq confirming our compliance with the minimum bid price rule.

As disclosed in the Current Report on Form 8-K filed on April 17, 2023, the audit committee of our Board (the “Audit Committee”) concluded that, as a result of inadvertent errors in the accounting for warrants previously issued by us, it was appropriate to restate our previously issued unaudited consolidated interim financial statements as of and for the quarterly periods ended March 31, 2022, June 30, 2022 and September 30, 2022 included in our Quarterly Reports on Form 10-Q for such periods in amended quarterly reports for the affected periods. As a result of such restatements, we were unable to timely file the Forms 10-K and 10-Q with respect to such periods without unreasonable effort or expense. On April 18, 2023, we received a notice from Nasdaq that we were noncompliant with Nasdaq Listing Rule 5250(c)(1) as a result of our failure to file our Annual Report on Form 10-K with the SEC by the required due date.

On May 17, 2023, we received a second notice from Nasdaq that we remained noncompliant with Nasdaq Listing Rule 5250(c)(1) as a result of our failure to file our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 with the SEC by the required due date.

On August 16, 2023, we received a third notice from Nasdaq that we remained noncompliant with Nasdaq Listing Rule 5250(c)(1) as a result of our failure to file our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 with the SEC by the required filing date. Nasdaq granted us an exception until October 16, 2023, to file the delinquent reports.

On October 17, 2023, we received a Staff Delisting Determination (the “Staff Determination”) from the Listing Qualifications Department of Nasdaq notifying us that we were not in compliance with Nasdaq’s continued listing requirements under Nasdaq Listing Rule 5250(c)(1) as a result of its failure to file the delinquent reports in a timely manner.

On November 16, 2023, we received a notice from Nasdaq that we remained noncompliant with Nasdaq Listing Rule 5250(c)(1) as a result of our failure to file our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023 with the SEC by the required filing date.

On December 1, 2023, we received a notice from Nasdaq stating that because we reported stockholders’ equity of $(17.17) million in our Quarterly Report on Form 10-Q for the quarter ended March 30, 2023, we were no longer in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Primary Equity Listing Rule”), which requires that listed companies maintain a minimum of $2.5 million in stockholders’ equity. In response, we timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”), which stayed any further action by the Listing Qualifications Staff. The hearing was held on January 11, 2024. We arrived at the hearing having previously cured any additional grounds for delisting as a result of delinquent periodic filings during 2023 that were filed prior to the hearing.

On January 30, 2024, we received formal notice that the Panel had granted our request for an exception through April 15, 2024 to evidence compliance with the Primary Equity Listing Rule, which was subsequently extended to May 22, 2024. On May 21, 2024, we regained compliance with the Primary Equity Listing Rule as a result of the amendment and subsequent conversion of certain outstanding indebtedness.

On March 5, 2024, we received a deficiency letter from Nasdaq notifying us that, for the last 30 consecutive business days, the bid price for our Common Stock had closed below $1.00 per share, which is the minimum closing price required to maintain continued listing on the Nasdaq Stock Market under the Minimum Bid Requirement. The compliance period for the Company expired on September 3, 2024.

On September 4, 2024, Nasdaq notified us in writing that we were eligible for an additional 180-day compliance period, or until March 3, 2025, to regain compliance with the Minimum Bid Requirement. On October 8, 2024, we completed a 1-for-15 reverse stock split of our Common Stock, in which each fifteen shares of Common Stock issued and outstanding were combined and converted into one share of Common Stock to regain compliance with the Minimum Bid Requirement. On October 22, 2024, Nasdaq notified us that we had regained compliance with the Minimum Bid Requirement.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions about collection of accounts receivable, the valuation and recognition of stock-based compensation expense, valuation allowance for deferred tax assets, goodwill, impairment of long-lived assets, provision for litigation, inventory reserve, fair value measurements and useful life of fixed assets and intangible assets.

Financial Overview

Critical Accounting Policies and Significant Judgments and Estimates

Our management’s ~~discussion~~ discussion and analysis of our financial position and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, we evaluate estimates, which include estimates related to accruals, stock-based compensation expense, recoverability of goodwill, intangible assets, and other assets, and reported amounts of revenues and expenses during the reported period. We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from those estimates or assumptions. Refer to Note 2 included elsewhere in the notes to the consolidated financial statements, for further information.

Warrants

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging (“ASC 815”). Management’s assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own Common Stock among other conditions for equity classification.

For issued or modified warrants that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that are precluded from equity classification, they are recorded as a liability at their initial fair value on the date of issuance and marked-to-market each reporting period with the changes in fair value of warrant liabilities recorded in other income (expense), net in the accompanying consolidated statements of operations until the warrants are exercised. The fair value of the warrant liabilities are estimated using a Black-Scholes option-pricing model.

The estimated fair value of the warrant liabilities is determined using Level 3 inputs. Inherent in a Black-Scholes option-pricing model are assumptions used in calculating the estimated fair values that represent our best estimate. The volatility rate is determined utilizing our own share price and the share price of competitors over time.

Discontinued Operations

On December 31, 2024, we entered into a Purchase Agreement with CP. Under the Purchase Agreement, CP acquired the Cultivation Business assets from us relating to our VFUs, including the related Agrify TTK solution assets and Agrify InsightsTM software solutions. As the sale of the Cultivation Business represented a strategic shift that will have a major effect on our operations and financial results, they have been presented in discontinued operations separate from continuing operations for the years ended December 31, 2024 and 2023 in the Company’s consolidated statements of operations and applicable footnotes in accordance with ASC 205, Presentation of Financial Statements.

Revenue Recognition

Overview

We generate revenue from equipment sales and hemp-derived beverage sales.

In accordance with ASC 606, Revenue Recognition (“ASC 606”), we recognize revenue from contracts with customers using a five-step model, which is described below:

● identify the customer contract;

● identify performance obligations that are distinct;

● determine the transaction price;

● allocate the transaction price to the distinct performance obligations; and

● recognize revenue as the performance obligations are satisfied.

Revenue is recognized when, or as, performance obligations are satisfied by transferring control of a promised product or service to a customer. The Company satisfies its performance obligation upon transferring goods or services to a customer and transfers control upon the customer taking possession.

We enter into contracts that may include various combinations of equipment and services, which are generally capable of being distinct and accounted for as separate performance obligations. Contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Once we determine the performance obligations, the transaction price is determined, which includes estimating the amount of variable consideration to be included in the transaction price, if any. We then allocate the transaction price to each performance obligation in the contract based on the Standalone Selling Price (“SSP”). The corresponding revenue is recognized as the related performance obligations are satisfied.

Judgment is required to determine the SSP for each distinct performance obligation. We determine SSP based on the price at which the performance obligation is sold separately and the methods of estimating SSP under the guidance of ASC 606. If the SSP is not observable through past transactions, we estimate the SSP, taking into account available information such as market conditions, expected margins, and internally approved pricing guidelines related to the performance obligations. We typically satisfy our performance obligations for equipment sales when equipment is made available for shipment to the customer; for services sales as services are rendered to the customer.

We utilize the cost-plus margin method to determine the SSP for equipment and services. This method is based on the cost of the services from third parties, plus a reasonable markup that we believe is reflective of a market-based reseller margin.

We determine the SSP for services in time and materials contracts by observable prices in standalone services arrangements.

Payment terms with customers typically require payment in advance or payment 30 days from invoice date. Our agreements with customers do not provide for any refunds for services or products and therefore no specific reserve for such is maintained. In the infrequent instances where customers raise a concern over delivered products or services, we have endeavored to remedy the concern and all costs related to such matters have been insignificant in all periods presented.

We have elected to treat shipping and handling activities after the customer obtains control of the goods as a fulfillment cost and not as a promised good or service. Accordingly, we will accrue all fulfillment costs related to the shipping and handling of consumer goods at the time of shipment. We have payment terms with its customers of one year or less and has elected the practical expedient applicable to such contracts not to consider the time value of money. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue.

We receive payment from customers based on specified terms that are generally less than 30 days from the satisfaction of performance obligations. There are no contract assets related to performance under the contract. The difference in the opening and closing balances of our contract liabilities primarily results from the timing difference between our performance and the customer’s payment. We fulfill obligations under a contract with a customer by transferring products and services in exchange for consideration from the customer. Accounts receivables are recorded when the customer has been billed or the right to consideration is unconditional. We recognize contract liabilities when consideration has been received or an amount of consideration is due from the customer, and we have a future obligation to transfer certain proprietary products.

In accordance with ASC 606, we are required to include disclosure on our remaining performance obligations as of the end of the current reporting period. Due to the nature of our contracts, these reporting requirements are not applicable. The majority of our remaining contracts meet certain exemptions as defined in ASC 606, including (i) performance obligation is part of a contract that has an original expected duration of one year or less and (ii) the right to invoice practical expedient.

We generally provide a one-year warranty on our products for materials and workmanship but may provide multiple-year warranties as negotiated, and will pass on the warranties from its vendors, if any, which generally covers this one-year period. In accordance with ASC Topic 450, Accounting for Contingencies (“ASC 450”) we accrue for product warranties when the loss is probable and can be reasonably estimated. The reserve for warranty returns is included in accrued expenses and other current liabilities in our consolidated balance sheets.

Business Combinations

We allocated the purchase price of acquired companies to the tangible and intangible assets acquired according to ASC 805, Business Combinations, including in-process research and development assets, and liabilities assumed, based upon their estimated fair values at the acquisition date. These fair values are typically estimated with assistance from independent valuation specialists. The purchase price allocation process requires us to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets, contractual support obligations assumed, contingent consideration arrangements, and pre-acquisition contingencies.

Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain.

Examples of critical estimates in valuing certain of the intangible assets we have acquired or may acquire in the future include but are not limited to:

● future expected cash flows from software license sales, support agreements, consulting contracts, other customer contracts, and acquired developed technologies;

● expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed;

● the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company’s product portfolio;

● cost of capital and discount rates; and

● estimating the useful lives of acquired assets as well as the pattern or manner in which the assets will amortize.

Goodwill

We recognize the excess of the purchase price over the fair value of identifiable net assets acquired as goodwill. Goodwill is not amortized but is tested for impairment at least annually in the fourth quarter of the year, or more frequently if events or changes in circumstances indicate that the carrying amount of the goodwill may not be recoverable. The Company applies the guidance in ASU 2011-08 Intangibles-Goodwill and Other-Testing Goodwill for Impairment, which provides entities with an option to perform a qualitative assessment (commonly referred to as “Step Zero”) to determine whether further quantitative analysis for impairment of goodwill is necessary. A goodwill impairment charge is recorded if the amount by which our carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Factors that could lead to a future impairment include material uncertainties such as a significant reduction in projected revenues, a deterioration of projected financial performance, future acquisitions and/or mergers, and a decline in our market value as a result of a significant sustained decline in our stock price.

Income Taxes

We account for income taxes pursuant to the provisions of ASC Topic 740, Income Taxes (“ASC 740”) which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

We follow the provisions of ASC 740, “Basic Recognition Threshold.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10-25-6, the benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. We believe our tax positions are all highly certain of being upheld upon examination. As such, we have not recorded a liability for unrecognized tax benefits.

We recognize the benefit of a tax position when it is effectively settled. ASC 740, “Basic Recognition Threshold” provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits. ASC 740 clarifies that a tax position can be effectively settled upon the completion of an examination by a taxing authority. For tax positions considered effectively settled, we recognize the full amount of the tax benefit.

Accounting for Stock-Based Compensation

We follow the provisions of ASC Topic 718, Compensation - Stock Compensation (“ASC 718”) establishes standards surrounding the accounting for transactions in which an entity exchanges its equity instruments for goods or services. ASC 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions, such as options issued under our Stock Option Plans, as defined in Note 12 – Stockholder’s Equity.

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying Common Stock, expected option life, and expected volatility in the market value of the underlying Common Stock.

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because our stock options and warrants have characteristics different from those of our traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of such stock options. The risk-free interest rate is based upon quoted market yields for United States Treasury debt securities with a term similar to the expected term. The expected dividend yield is based upon our history of having never issued a dividend and management’s current expectation of future action surrounding dividends. We calculate the expected volatility of the stock price based on the corresponding volatility of our peer group stock price for a period consistent with the underlying instrument’s expected term. The expected lives for such grants were based on the simplified method for employees and directors.

As permitted under ASC 718, the Company has made an accounting policy choice to account for forfeitures when they occur.

It is important that the discussion of our operating results that follows be read in conjunction with the critical accounting policies disclosed above.

Results of Operations

We have incurred ~~recurring~~ recurring losses to date. Our consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. Refer to information provided under the heading “Liquidity and Capital Resources” below for further details.

3726

Comparison of Years Ended December 31, ~~2024~~ 2025 and ~~2023~~2024

The following table summarizes our results of operations for the years ended December 31, ~~2024~~2025 and ~~2023~~2024:

	Year Ended December 31,
(In thousands)	2024			2023
	2025			2024
Revenue	$	917,~~680~~283		$	~~15,142~~18
Cost of goods sold		97,~~015~~093			~~11,124~~89
Gross profit		665			4,018
Gross profit (loss)		10,190			(71	)
Selling, general and administrative		1234,~~305~~055			167,~~057~~182
Research and development		743			2,295
Impairment of long-lived assets		8,471			—
Change in contingent consideration		~~(2,180~~—	)		(12,~~322~~180	)
Gain on early termination of lease		(39	)		—
Total operating expenses		42,526			5,002
Loss on disposal on property and equipment		51			12
Operating loss from continuing operations		(32,336	)		(5,073	)
Total operating expenses		10,880			17,042
Interest expense, net		(3,203	)		(256	)
Operating loss from continuing operations		(10,215	)		(13,024	)
Change in fair value of warrant liabilities		299			(17,902	)
Interest expense, net		(256	)		(2,145	)
Other income, net		500			—
Change in fair value of warrant liabilities		(17,902	)		4,695
Total other expense, net		(2,404	)		(18,158	)
Loss on extinguishment of long-term debt, net		—			(4,311	)
Loss from continuing operations before income taxes		(34,740	)		(23,231	)
Other income, net		19			1,358
Income tax provision		—			2
Total other expense, net		(18,139	)		(403	)
Loss from continuing operations, net of income taxes		(34,740	)		(23,229	)
Loss from continuing operations before income taxes		(28,354	)		(13,427	)
Loss from discontinued operations		(2,054	)		(6,624	)
Income tax (expense) benefit		2			(2	)
Gain on disposal of Extraction business		3,537			(11,893	)
Loss from continuing operations, net of income taxes		(28,352	)		(13,429	)
Income (loss) from discontinued operations, net of income taxes		1,483			(18,517	)
Loss from discontinued operations		(1,501	)		(5,221	)
Net loss	$	(33,257	)	$	(41,746	)
Loss on disposal of Cultivation business		(11,893	)		—
Net loss per share – basic and diluted	$	(16.68	)	$	(40.92	)
Loss from discontinued operations, net of income taxes		(13,394	)		(5,221	)
Weighted average common shares outstanding - basic and diluted		1,993,947			1,020,185
Net loss		(41,746	)		(18,650	)
Income attributable to non-controlling interest		—			1
Net loss attributable to Agrify Corporation	$	(41,746	)	$	(18,649	)
Net loss per share attributable to Common Stockholders – basic and diluted (1)	$	(40.92	)	$	(187.64	)
Weighted average common shares outstanding - basic and diluted (1)		1,020,185			99,391

Revenues

We generate revenue from sales of hemp-derived ~~extraction~~THC ~~equipment~~products (non-licensing) and ~~solutions~~related ~~and~~party ~~hemp-derived~~Licensing ~~beverages~~Revenue.

The following table provides a breakdown of our revenue from continuing operations for the years ended December 31, ~~2024~~2025 and ~~2023~~2024:

	Year Ended December 31,
(In thousands)	~~2024~~2025			~~2023~~2024			Change			% Change
Ancillary products and services	$	55		$	444		$	(389	)		(88	)%
Non-licensing Revenue		9,504			18			9,486			52700	%
Extraction solutions		11,844			15,669			(3,825	)		(24	)%
Licensing Revenue		7,779			—			7,779			—	%
Hemp-derived beverages		18			—			18			100	%
Total revenue	$	17,283		$	18		$	17,265			95917	%
Sales discounts on extraction solutions		(2,237	)		(971	)		(1,266	)		(130	)%
Total revenue	$	9,680		$	15,142		$	(5,462	)		(142	)%

Revenues ~~decreased~~increased by $517.5 3 million, ~~or 142%,~~ for the year ended December 31, ~~2024~~2025, as compared to the same period in ~~2023~~2024. The comparative ~~decrease~~increase in revenue was primarily driven by ~~increased~~the ~~discounting~~transactions with MC Brands and VCP in May and August 2025, respectively in addition to all revenue for the year ended December 31, 2024 from the Cultivation Business and Extraction Business being presented as part of discontinued operations. Of the revenue recognized for the year ended December 31, 2025, $8.2 million was attributable to related parties.

3827

Cost of Goods Sold

Cost of goods sold represents a combination of the following: internal and outsourced labor and material costs associated with the assembly of extraction equipment, as well as labor and parts costs associated with the sale or provision of other products and services.

The following table provides a breakdown of our cost of goods sold from continuing operations for the years ended December 31, ~~2024~~2025 and ~~2023~~2024:

	Year Ended December 31,
(In thousands)	~~2024~~2025		~~2023~~2024		Change			% Change
Ancillary products and services	$	1,804	$	2,252	$	(448	)		(20	)%
Non-licensing Revenue		7,093		89		7,004			7870	%
Extraction solutions		7,123		8,872		(1,749	)		(20	)%
Total cost of goods sold	$	7,093	$	89	$	7,004			—
Hemp-derived beverages		88		—		88			100	%
Total cost of goods sold	$	9,015	$	11,124	$	(2,109	)		(19	)%

Cost of goods sold represents ~~decreased~~costs byassociated $2with the hemp-derived products sales (non-licensing).1 ~~million,~~Cost orof ~~19%,~~goods sold increased by $7 million for the ~~year~~ year ended December 31, ~~2024,~~2025 as compared to the same period in ~~2023~~2024. The ~~year-over-year~~comparative ~~decrease~~increase in cost of goods sold was primarily ~~driven~~ driven by the ~~decline~~hemp-derived THC edibles operations associated with the MC Brands transaction in ~~sales~~May 2025, in addition to all cost of ~~Extraction~~goods ~~solutions~~sold ~~and~~for ~~internal~~the ~~and~~year ~~outsourced~~ended ~~labor~~December 31, 2024 from the Cultivation Business and ~~materials~~Extraction ~~costs~~Business ~~for~~being ~~the~~presented as ~~extraction~~part ~~solutions~~of ~~sales~~discontinued operations.

Gross Profit

	Year Ended December 31,
(In thousands)	~~2024~~2025		~~2023~~2024			Change			% Change
Gross profit	$	665	$	4,018		$	(3,353	)		(83	)%
Gross profit (loss)		10,190		(71	)		10,261			(14452	)%

Gross profit totaled $~~0.7~~ 10 million, or 759%, of total revenue during the year ended December 31, ~~2024~~2025 compared to a gross ~~profit~~loss of $~~4.0~~71 ~~million,~~thousand ~~or 27%~~ of total revenue during the year ended December 31, ~~2023~~2024. The comparative $310.43 million year-over-year ~~decrease~~increase in gross profit was primarily driven by ~~increased~~the ~~discounting~~changes in ofproduct onlines ~~hand~~of ~~inventory~~the business.

Selling, General and Administrative Expenses

Year Ended December 31,

(In thousands)

~~2024~~2025

~~2023~~2024

Change

% Change

Selling, general and administrative

1234,~~305~~055

167,~~057~~182

(326,~~752~~873

)

~~(23~~374

Selling, General and administrative expenses (“SG&A”) consist principally of ~~salaries~~marketing costs and ~~related~~support ~~costs~~services ~~for~~performed ~~personnel~~by Green Thumb, ~~including~~as well as stock-based ~~compensation~~ compensation and travel expenses, associated with executive and other administrative functions. Other SG&A expenses include, but are not limited to, professional fees for legal, ~~consulting, depreciation~~ and ~~amortization and~~ accounting services, asand ~~well~~depreciation asand ~~facility-related~~amortization costs.

SG&A expenses ~~decreased~~ increased by $~~3.8~~27 million, or 23374%, for the year ended December 31, ~~2024~~2025, compared to the same period in ~~2023~~2024. The ~~primary~~comparative ~~drivers~~change ~~of the~~is ~~year-over-year~~primarily ~~decrease~~attributable ofto ~~SG&A~~marketing ~~expenses~~and ~~were~~consulting ~~largely attributable~~ costs to ~~reductions~~support inthe ~~salaries~~growth ~~and~~of ~~related~~the ~~costs~~hemp-derived ~~of approximately~~THC ~~$2.1~~products ~~million,~~sales a(non-licensing) ~~decrease~~ in ~~stock-based~~addition ~~compensation,~~to the presentation of ~~approximately~~SG&A ~~$1.7~~expense ~~million,~~from the aCultivation ~~decrease~~Business inand ~~insurance~~Extraction ~~expenses, of~~Business ~~approximately~~for ~~$1.5~~the ~~million,~~year ~~and~~ended aDecember ~~decrease~~31, in2024 ~~consulting~~as ~~expenses~~part of ~~approximately~~discontinued $0operations.6 ~~million.~~Of ~~These~~the ~~decreases~~SG&A expense ~~were~~incurred ~~partially offset~~for bythe ayear ended December 31, 2025, $110.76 million ~~increase~~was inattributable ~~bad~~to ~~debt~~related ~~expense~~parties.

~~Research and Development~~28

	Year Ended December 31,
(In thousands)	2024		2023		Change			% Change
Research and development	$	743	$	2,295	$	(1,552	)		248	%

Research and development expenses decreased by $1.6 million, or 248%, for the year ended December 31, 2024, compared to the same period in 2023. The decrease is attributable to the reductions in personnel, consulting services and materials purchased.

Other Expense, Net

	Year Ended December 31,
(In thousands)	~~2024~~2025			~~2023~~2024			Change			% Change
Interest expense, net	$	(~~256~~3,203	)	$	(~~2,145~~256	)	$	1(2,~~889~~947	)		~~(88~~1151	)%
Other income, net		19			1,358			(1,339	)		(99	)%
Change in fair value of warrant liabilities		299			(17,902	)		18,201			(102	)%
Change in fair value of warrant liabilities		(17,902	)		4,695			(22,597	)		(481	)%
Other income, net		500			—			500			—	%
Loss on extinguishment of notes payable		—			(4,311	)		4,311			(100	)%
Total other expense, net	$	(2,404	)	$	(18,158	)	$	15,754			(87	)%
Total other expense, net	$	(18,139	)	$	(403	)	$	(17,736	)		4401	%

Interest expense, net

Interest expense, net was approximately $0.3.2 million for the year ended December 31, ~~2024~~2025 compared to interest expense, net of approximately $20.13 million for the same period in ~~2023~~2024. The ~~significant~~change ~~decrease~~is inattributable mainly ~~our~~to the increase of $72.0 million principal under the Convertible Notes. Included interest expense, ~~was~~net ~~primarily~~for ~~driven~~the byyear ~~the~~ended ~~reduction~~December 31, 2025 is $4.1 million incurred from a related party. The year ended December 31, 2025 includes $1.2 million of interest income earned on cash deposits with no comparable amount earned in ~~notes~~the ~~payable~~year ~~due~~ended toDecember ~~conversion~~31, 2024.

Other income, net

Other income, net decreased by $1.3 million, or (99)%, for the year ended December 31, 2024, compared to the same period in 2023.

Change in fair value of warrant liability

Change in fair value of the warrant liability ~~increased~~decreased by $2218.62 million, or ~~481~~102%, for the year ended December 31, ~~2024~~2025, compared to the same period in ~~2023~~2024. The increase is related to the ~~measurement~~fair ofvalue ~~certain~~remeasurement ~~warrants~~of ~~upon reclassification to equity~~warrants.

~~Loss~~Other onincome, ~~extinguishment of notes payable~~net

~~Change~~Other inincome, ~~loss~~net onincreased ~~extinguishment of notes payable decreased~~ by $40.35 million, ~~or 100%,~~ for the year ended December 31, ~~2024~~2025, compared to the same period in ~~2023~~2024. WeThe ~~had no~~comparative ~~loss~~change onis ~~extinguishment~~primarily ofattributable ~~notes~~to ~~payable~~the employee retention credit refunds received for the year ended December 31, ~~2024, compared to a loss of $4~~2025.~~3 million for the same period in 2023.~~

Income Tax ~~(Expense) Benefit~~Provision

	Year Ended December 31,
(In thousands)	~~2024~~2025			~~2023~~2024			Change			% Change
Income tax (expense) benefit	$	2		$	(2	)	$	—			—	%
Income tax provision	$	—		$	2		$	(2	)		(100	)%
Effective tax rate		—0.00	%		—(0.01	)%

Change in loss on provision for income taxes decreased by $2 thousand for the year ended December 31, 2025, compared to the same period in 2024.

Liquidity and Capital Resources

As of December 31, ~~2024~~2025, our principal sources of liquidity are cash and cash equivalents totaling $3132.2 million. Our current working capital needs are to support revenue growth and manage inventory to meet demand forecasts and support operational growth. Our long-term financial needs primarily include working capital requirements. There are many factors that may negatively impact our available sources of funds in the future, including the ability to generate cash from operations, raise debt capital and raise cash from the issuance of our securities. The amount of cash generated from operations is dependent upon factors such as the successful execution of our business strategy and general economic conditions.

We may opportunistically raise debt capital, subject to market and other conditions. Additionally, as part of our growth strategies, we may also raise debt capital for strategic alternatives and general corporate purposes. If additional financing is required from outside sources, we may not be able to raise such capital on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results and financial condition may be adversely affected.

The Company is required to evaluate whether there are conditions or events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Substantial doubt exists when conditions and events, considered in aggregate, indicate that it is probable that a company will be unable to meet its obligations as they become due within one year after the date that the consolidated financial statements are issued.

We have a history of recurring net losses and negative cash flow in operating activities. However, we believe our positive working capital as of December 31, 2025 inclusive of $32.2 million of cash and cash equivalents, anticipated contractual Licensing Revenue and ability to address our Convertible Notes will be sufficient to meet our cash requirements through at least the 12-month period following the date that these consolidated financial statements were issued.

Contractual debt maturities of $80 million exist through February 2027, with $72 million of the Convertible Notes held by Green Thumb, a related party. The election of these notes to be payable in cash upon maturity could raise substantial doubt about the Company’s ability to continue as a going concern. However, while these contractual maturities require management attention, management believes it is probable that the obligations will be addressed through extension or conversion consistent with historical practice. As such, our financial statements have been prepared on a going concern basis.

Indebtedness

CPConvertible ~~Acquisitions Junior Secured Note~~Notes

On ~~October~~November 275, ~~2023~~2024, ~~CP, an~~the ~~entity~~Company ~~affiliated~~issued ~~with~~a ~~and~~secured ~~controlled~~convertible bynote (the ~~our~~“November ~~former~~2024 ~~Chief~~Note”) ~~Executive~~to ~~Officer~~RSLGH, ~~and~~LLC ~~former~~(“RSLGH”), ~~member~~a subsidiary of ~~our~~Green ~~Board~~Thumb, ofa ~~Directors,~~related ~~purchased the~~party. ~~Exchange~~The November 2024 Note is a secured obligation of the Company and ranks senior to all indebtedness of the ~~Convertible~~Company ~~Note~~except ~~from~~for CPthe (May 2025 Notes and the ~~“Note~~August ~~Purchase”~~2025 Notes (both as defined below)., Aswhich ~~part~~rank ofon parity with the ~~same~~November ~~transaction~~2024 Note. The November 2024 Note matured on November 5, we2025 ~~issued~~and accrued interest at a 10.0% annualized rate. The principal amount of the ~~Junior Secured~~November 2024 Note towas ~~CP.~~converted ~~Pursuant~~into topre-funded warrant on the ~~Junior~~maturity ~~Secured~~date. The November 2024 Note, CPprovided ~~would~~for ~~lend~~advances of up to $~~3.0~~20 million toin usthe aggregate, of which $10 million was advanced upon issuance. The ~~Junior~~November ~~Secured~~2024 Note ~~bore~~was amended on May 8, 2025 to issue pre-funded warrants in lieu of cash interest, with at18,614 apre-funded ~~rate~~warrants ofissued ~~10%~~on ~~per~~May ~~annum~~8, ~~would~~2025 ~~mature~~and inan ~~full~~additional 11,373 pre-funded warrants issued on ~~December~~September 311, ~~2023~~2025, ~~and~~which ~~could~~were issued in lieu of the cash interest that would otherwise be ~~prepaid~~payable ~~without~~under ~~any~~the ~~fee~~November or2024 ~~penalty~~Note. OnThe ~~December~~number 4,of pre-funded warrants is ~~2023,~~equal weto ~~and~~the CPcash ~~amended~~interest ~~and~~amount ~~restated~~otherwise payable on the ~~Junior~~November ~~Secured~~2024 Note ~~agreement.~~divided ~~Pursuant~~by tothe closing share price on May 8, 2025, the ~~terms~~effective date of the amendment,. No changes were made to the ~~maximum~~conversion price of the principal amount ~~that~~of ~~may~~the beNovember ~~loaned~~2024 byNote. CPOn toMay us22, ~~was~~2025, the ~~increased~~Company toand ~~$4.0~~RSLGH ~~million~~entered ~~and~~into ~~extended~~a second amendment to the ~~maturity~~November ~~date~~2024 ~~thereon~~Note, towhich ~~December~~amended 31the terms to, ~~2024.~~among Onother ~~November~~things, permit 30RSLGH to elect, ~~2023~~subject to any required approvals under Nasdaq listing rules, CPto ~~agreed~~receive pre-funded warrants in lieu of shares of Common Stock upon conversion of the November 2024 Note at a conversion price equal to ~~forgive~~the existing conversion price of $13.158 less the $0.001 exercise ~~million~~price of each pre-funded warrant. On November 3, 2025, the holder of the November 2024 Note elected to convert the outstanding principal ~~amount~~and interest, into pre-funded warrants. The outstanding onprincipal and accrued interest amounts of $10 million and $175 thousand respectively, resulted in the ~~Convertible~~issuance ~~Note~~of 3,167,564 and 55,433 pre-funded warrants, respectively.

~~Consolidated~~On CPMay ~~Acquisitions~~22, 2025, the Company ~~Note~~issued secured convertible notes with an aggregate original principal amount of $30.0 million (collectively the “May 2025 Notes”) to RSLGH and to certain other third-party accredited investors. The May 2025 Notes are secured obligations of the Company and rank senior to all indebtedness of the Company except for the the August 2025 Notes, which ranks on parity with the May 2025 Notes. The May 2025 Notes will mature on November 22, 2026 and accrue interest at a 10.0% annualized rate, with interest to be paid on the first calendar day of each September and March while the May 2025 Notes are outstanding, in pre-funded warrants, beginning September 1, 2025. The principal amount of the May 2025 Notes will be payable on the maturity date. The May 2025 Notes may be converted into Common Stock or, at the election of the holder, into pre-funded warrants, with a beneficial ownership limitation for RSLGH of 49.99% and a beneficial ownership limitation for other holders of 4.99%, in each case subject to applicable Nasdaq listing rules. If a holder elects to convert the May 2025 Notes into Common Stock, the conversion price per share will be $23.53, equal to the most recent closing price of the Common Stock on the Nasdaq Capital Market at the time the May 2025 Notes were issued, subject to customary adjustments for certain corporate events. If a holder elects to convert the May 2025 Notes into pre-funded warrants, and for interest payments payable in the form of pre-funded warrants, the conversion price per pre-funded warrant will be equal to the $23.53 conversion price less than $0.001 exercise price of the warrant. The conversion of the May 2025 Notes into Common Stock and/or pre-funded warrants is subject to certain customary conditions and, to the extent necessary, the receipt of stockholder approval under Nasdaq listing rules.

On January 25, 2024, we and CP consolidated the outstanding principal and interest due under the Junior Secured Note and the Exchange Note as well as the interest due under the Convertible Note into the Convertible Note (collectively, with the Junior Secured Note and the Exchange Note, the “Consolidated Notes”), and amended and restated the Convertible Note with the Restated Note having a total outstanding principal of $18.3 million. The Restated Note bore interest at a rate of 10% per annum and would have matured in full on December 31, 2025. We could redeem all or a portion not less than $5.0 million of principal at any time at a price equal to 102.5% of the redeemed principal amount plus accrued but unpaid interest. If CP elected to convert the Restated Note, the conversion price per share would be $21.90, subject to customary adjustments for certain corporate events. The conversion of the Restated Note would be subject to certain customary conditions. The Restated Note could not have been converted into shares of Common Stock if such conversion would result in CP and its affiliates owning an aggregate of in excess of 49.99% of the then-outstanding shares of Common Stock. Immediately following the execution of the Restated Note, CP elected to convert approximately $3.9 million of outstanding principal into an aggregate of 178,109 shares of Common Stock.30

On ~~May~~August 2125, ~~2024~~2025, wethe Company issued secured convertible notes with an aggregate original principal amount of $50.0 million (collectively the “August 2025 Notes”) to RSLGH and CPto certain other third-party accredited investors. The August 2025 Notes are secured obligations of the Company and rank ~~entered~~senior ~~into~~to all indebtedness of the ~~Consolidated~~Company ~~Note~~except ~~Amendment,~~for ~~pursuant~~the toMay 2025 and November 2024 Notes, which CPrank ~~could~~on ~~elect~~parity with the August 2025 Notes. The August 2025 Notes will mature on February 25, in2027 ~~lieu~~and ofaccrue ~~shares~~interest ofat ~~Common~~a ~~Stock~~10.0% ~~issuable~~annualized ~~upon~~rate, ~~conversion~~with interest to be paid on the first calendar day of each September and March, while the ~~Restated~~August ~~Note~~2025 Notes are outstanding beginning March 1, to2026. ~~instead~~The ~~receive~~principal ~~Pre-Funded~~amount of ~~Warrants~~the August 2025 Notes will be payable on the maturity date. The ~~conversion~~August ~~price~~2025 ~~applicable~~Notes tomay be converted into Common Stock or, at the ~~Pre~~election of the holder, into pre-~~Funded~~funded ~~Warrants~~warrants, ~~remained~~with ~~unchanged~~a beneficial ownership limitation for RSLGH of 49.99% and a beneficial ownership limitation atfor ~~$21~~other holders of 4.9099%, in each case subject to applicable Nasdaq listing rules. ~~Immediately~~If ~~following~~a ~~the~~holder ~~execution~~elects ofto convert the ~~Consolidated~~August ~~Note~~2025 ~~Amendment~~Notes into Common Stock, CPthe ~~elected~~conversion toprice ~~convert~~per share will be $1129.5475, ~~million~~equal ofto ~~outstanding~~the Minimum Price as such term is defined under Nasdaq Listing ~~principal~~Rule ~~into~~5635 at the CPtime ~~Warrant~~the ~~Conversion~~August 2025 Notes were issued, ~~exercisable~~subject atto ~~issuance~~customary adjustments for upcertain corporate events. If a holder elects to ~~525~~convert the August 2025 Notes into pre-funded warrants,~~114~~ ~~shares~~and offor ~~Common~~interest ~~Stock~~payments ~~having~~elected ato ~~fair~~be ~~value~~paid in the form of ~~approximately~~pre-funded warrants, the conversion price per pre-funded warrant will be equal to the $229.9475 ~~million~~conversion price less than $0.001 Inexercise ~~connection~~price ~~with~~of the ~~sale~~warrant. The conversion of the ~~Cultivation~~August ~~Business~~2025 onNotes ~~December~~into ~~31,~~Common ~~2024~~Stock and/or pre-funded warrants is subject to certain customary conditions and, CPto the ~~assumed~~extent ~~all~~necessary, the receipt of ~~our~~stockholder ~~obligations~~approval under ~~the Restated~~Nasdaq ~~Note~~listing rules.

~~GIC~~The ~~Acquisition~~May 2025 Notes and August 2025 Notes (together referred to as “the Notes”) impose certain customary affirmative and negative covenants upon the Company, including covenants relating to ranking and reservation of shares. If an event of default under one or more of the Notes occurs and is not waived, the holder can elect to accelerate all or a portion of the then-outstanding principal amount of the applicable Note, plus accrued and unpaid interest, including default interest, which accrues at a rate per annum equal to 14% from the date of a default or event of default. The Company was in compliance with these covenants as of December 31, 2025.

On July 12, 2023, our Board approved the issuance of the GIC Note to GIC, an entity that is owned and managed by our former Chairman and Chief Executive Officer. Pursuant to the GIC Note, GIC was obligated to lend us up to $0.5 million, $0.3 million of which was delivered at issuance and the remaining $0.2 million delivered on July 31, 2023. The GIC Note bore interest at a rate of 10% per annum, would mature in full on August 6, 2023, and could be prepaid without any fee or penalty. The GIC Note ranked junior to all existing secured indebtedness. On October 27, 2023, the maturity date of the GIC Note was subsequently amended to December 31, 2024, at which point principal and accrued interest will be repaid in full.

On May 21, 2024, GIC and the Company entered into the Restated GIC Note, (the Restated GIC Note collectively with the Consolidated Note Amendment, the “Related Party Debt Amendments”) to increase the aggregate principal amount to approximately $2.29 million, extend the maturity date to December 31, 2025, and provide that the Restated Junior Note may be converted into Common Stock of the Company or, at GIC’s election, Pre-Funded Warrants, in each case at a conversion price of $4.65. Immediately following the execution of the Restated GIC Note, GIC elected to convert all of the outstanding principal under the Restated GIC Note into a Pre-Funded Warrant exercisable at issuance for up to 492,203 shares of Common Stock.

CP Promissory Note

On August 14, 2024, we issued a junior secured promissory note (the “2024 CP Note”) to CP. Pursuant to the 2024 CP Note, CP would lend us up to $1,500,000. The 2024 CP Note bore interest at a rate of 10% per annum, would mature in full on July 1, 2025, and could be prepaid without any fee or penalty. The 2024 CP Note was secured by our assets and ranked junior to our existing secured indebtedness. The 2024 CP Note could be converted into Common Stock or, at CP’s election, Pre-Funded Warrants with an exercise price of $0.001 per share, in each case at a conversion price of $3.9495. In connection with the sale of the Cultivation Business on December 31, 2024, CP assumed all of our obligations under the 2024 CP Note.

Investor Convertible Note

On November 5, 2024, we issued the Note to the Investor. The Note is a secured obligation and ranks senior to all indebtedness of the Company except for indebtedness held by Mack, as described in Note 12 – Stockholder’s Equity (Deficit). The Note will mature on November 5, 2025 and has a 10.0% annualized interest rate, with interest to be paid on the first calendar day of each September and March while the Note is outstanding, in cash, beginning January 1, 2025. The principal amount of the Note will be payable on its maturity date. The Note provides for advances of up to $20.0 million in the aggregate, of which $10.0 million was advanced upon issuance. If the Investor elects to convert the Note, the conversion price per share will be $3.158, subject to customary adjustments for certain corporate events. The conversion of the Note will be subject to certain customary conditions and the receipt of stockholder approval to the extent necessary under Nasdaq listing rules.

Summary Statement of Cash Flows

The following table presents the major components of net cash flows from and used in operating, investing, and financing activities for the years ended December 31, ~~2024~~ 2025 and ~~2023~~2024:

(In thousands)	December 31, ~~2024~~2025			December 31, ~~2023~~2024
Net cash (used in) provided by:
Operating activities - continuing operations	$	(11,583	)	$	(30,975	)
Operating activities	$	(23,537	)	$	(11,583	)
Investing activities- continuing operations		(54	)		25,179
Investing activities		(55,075	)		(54	)
Financing activities- continuing operations		42,373			(4,227	)
Financing activities		79,660			42,373
Net increase (decrease) in cash and cash equivalents	$	30,736		$	(10,023	)
Net increase in cash and cash equivalents	$	1,048		$	30,736

Cash Flows from Operating Activities

For the year ended December 31, ~~2024~~2025, our operating cash flows included a net loss of $4133.72 million, a $176.92 million ~~change in the fair value~~ of ~~warrant liabilities, $11.9 million related to loss on disposal of the Cultivation Business, $1.4 million of~~ depreciation and amortization, $12.2 million of stock based compensation expense, non-cash ~~offset~~interest byexpense ~~a decrease~~ of $52.98 million ~~related~~offset toby ~~gain~~an onincrease ~~settlement~~ of ~~contingent liability,~~ $27.20 million ~~decrease~~ related toparty ~~accrued~~accounts ~~acquisition~~receivable, ~~liabilities~~$3.5 ~~due~~million related to ~~issuance~~a ofloss ~~held-back-shares,~~on ~~change~~exit inof ~~provision~~the ~~for~~Extraction ~~credit losses of $0.3 million~~Business, ~~change~~and ~~in provision for inventory of~~ $03.7,5 ~~and~~million areduction ~~gain on early termination~~ of ~~lease of $0~~inventory.1 ~~million.~~ Net cash was increased by changes in operating assets and liabilities of $7.01 million.

For the year ended December 31, ~~2023~~2024, weour ~~incurred~~operating cash flows included a net loss of $1841.67 million, ~~primarily~~a ~~due to~~ $417.79 million ~~related to the~~ change in the fair value of warrant liabilities, $11.9 million related to loss on disposal of the Cultivation Business, $1.94 million of depreciation and amortization, $21.72 million of stock based compensation expense, ~~and~~offset by a decrease of $245.9 ~~thousand~~million related to gain on settlement of ~~debt~~contingent liability, $2.2 million decrease related to accrued acquisition liabilities due to issuance ~~costs~~of held-back-shares, change in provision for credit losses of $0.3 million, change in provision for inventory of $0.7 million, and a gain on early termination of lease of $0.1 million. Net cash was increased by changes in operating assets and liabilities of $~~13.~~7.0 million.

Cash Flows from Investing Activities

For the year ended December 31, 2025, net cash used in investing activities was $55.1 million, which primarily resulted from the related party transactions with MC Brands and VCP.

For the year ended December 31, 2024, net cash used in investing activities was approximately $0.1 million, which included cash inflows of $0.3 million from the proceeds from repayment of loan receivable, and cash outflows of $0.4 million related to issuance of loans receivable.

For the year ended December 31, 2023, net cash provided by investing activities was approximately $25.2 million, which included cash inflows of $10.5 million in proceeds from sale of marketable securities and $15.1 million in proceeds from repayment of loan receivable, and cash outflows of $0.6 million related to a certain loan issuance and $0.3 million in purchases of property and equipment.

Cash Flows from Financing Activities

For the year ended December 31, 2025, net cash provided by financing activities was $79.7 million, which resulted from proceeds from May and August 2025 Notes.

For the year ended December 31, 2024, net cash provided by financing activities was $42.4 million. Net cash provided by financing activities was primarily driven by proceeds from the issuance Common Stock in connection with private placement of $25.8 million, proceeds from the issuance of related party notes of $14.5 million, proceeds from the issuance of Common Stock pursuant to a registered offering with the U.S. Securities and Exchange Commission and pre-funded warrants offering of $2.1 million, proceeds from the issuance of Common Stock through stock subscription of $0.3 million, offset by payments on insurance financing loans of $0.4 million.

~~For the year ended December~~ 31, 2023, net cash used in financing activities was $4.2 million. Net cash used in financing activities was primarily driven by the repayment of certain of our debt instruments of $10.3 million, and payments on insurance financing loans of $1.3 million, offset by proceeds generated from the sale of securities pursuant to our “at the market” program, net, of $1.5 million and proceeds from issuance of a related party note of $4.4 million.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data.

The consolidated financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K, which consolidated financial statements are incorporated by reference in response to this Item 8. An index of those consolidated financial statements is found in “Item 15. Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Management, with the ~~participation~~ participation of our Interim Chief Executive Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, ~~2024~~2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our ~~Chief~~ Interim Chief Executive Officer concluded that our disclosure controls and procedures were ~~not~~ effective at the reasonable assurance level as of December 31, ~~2024~~2025.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Interim Executive Officer and Chief Financial Officer, we ~~conducted~~ conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework in in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on on the results of this evaluation, management has concluded that our internal control over financial reporting was ~~not~~ effective at the reasonable assurance level as of December 31, ~~2024~~2025.

During the year ended December 31, 2024, management identified material weaknesses in internal control over financial reporting. These material weaknesses related to the accounting for complex financial transactions, inadequate design of the controls over the preparation of the consolidated financial statements, and insufficient technical accounting resources and lack of segregation of duties. These deficiencies could result in misstatements to our consolidated financial statements that could be material and may not be prevented or detected on a timely basis.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm because we are an “emerging growth company,” and may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

Remediation of ~~Material~~Prior ~~Weakness~~Year inMaterial ~~Internal Control over Financial Reporting~~Weaknesses

As ~~of December 31, 2024 and through the date of this filing, we were in varying stages of remediating the current and~~ previously reported ~~material weaknesses~~ in our ~~internal~~ ~~control~~Annual ~~over~~Report ~~financial~~on ~~reporting.~~Form ~~During~~10-K for the fiscal year ended December 31, 2024, weand ~~have~~filed ~~improved~~with ~~our~~the ~~technical~~SEC ~~accounting~~on ~~resources by~~March ~~hiring~~21, ~~outside~~2025, ~~consultants~~as ~~that~~amended ~~have~~on ~~strong~~March ~~technical~~28, ~~knowledge~~2025, inmanagement ~~financial~~identified ~~reporting~~a ~~and~~material weakness ~~accounting. We are~~ in ~~the~~internal ~~process~~control ofover ~~rebuilding the~~financial ~~finance function and have engaged outside consultants to assist~~reporting. WeThe ~~will~~material ~~need~~weaknesses tothat ~~continue~~were topreviously ~~devote~~identified ~~specific~~related ~~attention~~ to ~~these~~the ~~aspects~~following: lack of ~~our~~technical ~~internal~~expertise, ~~control~~segregation ~~environment~~of toduties ~~ensure~~and ~~that~~accounting ~~these~~for ~~material~~complex ~~weaknesses~~financial ~~are fully remediated~~transactions.

The material weaknesses identified will not be considered fully remediated until the necessary controls and procedures have operated effectively for a sufficient period of time and management has concluded, through testing, that internal controls are effective. Our management will monitor the effectiveness of our remediation plans and will make changes management determines to be appropriate. If not remediated, these material weaknesses could result in material misstatements to our annual or interim consolidated financial statements that may not be prevented or detected on a timely basis or result in a delayed filing of required periodic reports. If we are unable to assert that our internal control over financial reporting is effective, or when required in the future, if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of the internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our Common Stock could be adversely affected, and we could become subject to litigation or investigations by the Nasdaq Capital Market, the SEC, or other regulatory authorities, which could require additional financial and management resources.32

Under the oversight of senior management and the Audit Committee of the Board of Directors, we have implemented a previously disclosed remediation plan designed to address the underlying causes of these material weaknesses. Key measures include:

●

Expanding our accounting and financial reporting personnel with additional U.S. GAAP and SEC reporting experience;

●

Establishing enhanced monitoring and review controls for non-recurring and complex transactions to ensure the accuracy and completeness of our financial statements and related disclosures;

●

Formalizing and maintaining documentation of critical controls and accounting policies to strengthen consistency and accountability across the Company;

●

Engaging nationally recognized third-party advisors on specific technical accounting and valuation matters; and

●

Implementing and reinforcing segregation of duties within key financial reporting and operational processes.

Management, including the Interim Chief Executive Officer and Chief Financial Officer, has reaffirmed the importance of strong control environment and an organization-wide focus on internal control and accountability. Management has concluded that the actions taken to strengthen our internal control over financial reporting, as well as the results of our testing over the design and operating effectiveness of these controls fully remediated the previously identified material weakness as of December 31, 2025. However, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with applicable policies, processes and documentation requirements may deteriorate.

Changes in Internal Control Over Financial Reporting

~~Other~~Except ~~than~~for the ~~changes to remediate the~~ material weaknesses remediation actions noted above, there ~~was~~were no ~~change~~significant changes in our internal control over financial reporting (as ~~defined~~such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the ~~fiscal~~fourth ~~year~~quarter ~~ended December 31, 2024~~ that ~~has~~have materially affected, or isare reasonably ~~likely~~ likely to materially affect, our internal control over financial reporting during the quarter ended December 31, 2025.

Item 9B. Other Information.

~~None~~During the quarter ended December 31, 2025, none of our directors or officers informed us of the adoption, modification or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

4433

PART III

Item 10. Directors, Executive Officers, and Corporate Governance

The information required by this Item 10 will be included in our Definitive Proxy Statement to be filed with the SEC with respect to our ~~2025~~2026 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 11. Executive Compensation.

The information required by this Item 11 will be included in our Definitive Proxy Statement to be filed with the SEC with respect to our ~~2025~~2026 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners, Management and Related Stockholder Matters.

The information required by this Item 12 will be included in our Definitive Proxy Statement to be filed with the SEC with respect to our ~~2025~~2026 Annual Meeting of Stockholders and is incorporated herein by reference.

The information required by this Item 13 will be included in our Definitive Proxy Statement to be filed with the SEC with respect to our ~~2025~~2026 Annual Meeting of Stockholders and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services.

The information required by this Item 14 will be included in our Definitive Proxy Statement to be filed with the SEC with respect to our ~~2025~~2026 Annual Meeting of Stockholders and is incorporated herein by reference.

4534

PART IV

Item 15. Exhibits, Financial Statements and Schedules.

(a) Financial Statements:

(1) The consolidated financial statements required to be included in this report appear after the signature page to this report as a separate section beginning on page F-1.

(2) All supplemental schedules have been omitted since the information is either included in the consolidated financial statements or the notes thereto or they are not required or are not applicable.

(3) The Exhibit Index of this report appears below.

(b) Exhibits:

Exhibit No.		Description
2.1±		Plan of Merger and Equity Purchase Agreement, dated as of September 29, 2021, among the Registrant, Sinclair Scientific, LLC, Mass2Media, LLC dba PX2 Holdings, LLC, and each of the equity holders of Sinclair Scientific, LLC named therein (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2021
2.1		Asset Purchase Agreement, dated as of December 12, 2024, among the registrant, Double or Nothing, LLC, Joel Gott, and Charles Bieler (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2024)
2.2		Amendment to Plan of Merger and Equity Purchase Agreement, dated as of October 1, 2021, between the Registrant and Sinclair Scientific, LLC (incorporated by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2021
2.3±		Membership Interest Purchase Agreement, dated as of December 31, 2021, among the Registrant, PurePressure, LLC, Benjamin Britton as Member Representative, and each of the equity holders of PurePressure, LLC named therein (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 5, 2022)
2.4±		Merger Agreement, dated as of February 1, 2022, among the Registrant, LS Holdings Corp., Lab Society NewCo, LLC, Michael S. Maibach Jr. as Owner Representative, and each of the Owners named therein (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2022)
2.5		Asset Purchase Agreement, dated as of December 12, 2024, among the registrant, Double or North LLC, Joel Gott, and Charles Bieler (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2024)
3.1		Articles of Incorporation of the Registrant, as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 13, 2021)
3.2		Certificate of Amendment to the Articles of Incorporation of the Registrant, filed July 11, 2022 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2022).
3.3		Certificate of Amendment to the Articles of Incorporation of the Registrant, filed October 17, 2022 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 17, 2022).
3.4		Certificate of Amendment to the Articles of Incorporation of the Registrant, filed March 1, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report filed with the Securities and Exchange Commission on March 3, 2023).
3.5		Certificate of Change to Articles of Incorporation of Agrify Corporation, filed June 30, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2023).
3.6		Certificate of Amendment to the Articles of Incorporation of the Registrant, filed January 22, 2024 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 25, 2024).
3.7		Articles of Amendment to Articles of Incorporation of Agrify Corporation, filed October 3, 2024 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 4, 2024).
3.8		Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.3 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26, 2021)
3.9		Second Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 9, 2024).
3.10		Third Amended and Restated Certificate of Designations of the Series A Convertible Preferred Stock of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 13, 2021).
3.11		Certificate of Amendment to Articles of Incorporation dated August 27, 2025 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 27, 2025).
3.12		Third Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 27, 2025).

464.1 Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26, 2021)

4.1		Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26, 2021)
4.2		Form of Representative’s Warrant dated February 19, 2021 (incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 11, 2021)
4.3		Form of Representative’s Warrant dated January 27, 2021 (incorporated by reference to Exhibit 4.2 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26, 2021)
4.4		Form of Warrant issued to Noteholders (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
4.5		Description of Registrant’s Securities (incorporated by reference to Exhibit 4.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 2, 2021)
4.6		Form of Common Stock Purchase Warrant dated January 28, 2022 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 26, 2022)
4.7		Form of Senior Secured Note (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2022).
4.8		Form of Warrant Exchange Warrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2022).
4.9		Form of Note Exchange Warrant (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2022).
4.10		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2022)
4.11		Form of Common Warrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2022)
4.12		Form of Senior Secured Convertible Note (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2023)
4.13		Amendment to Senior Secured Note (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2023)
4.14		Exchange Warrant, dated October 27, 2023 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
4.15		Abeyance Warrant, dated October 27, 2023 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
4.16		Common Stock Purchase Warrant, dated October 27, 2023 (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
4.17		Amended and Restated Junior Secured Promissory Note (incorporated by reference to Exhibit 4.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
4.18		Junior Secured Promissory Note (incorporated by reference to Exhibit 4.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
4.19		Amendment to Junior Secured Promissory Note, dated December 4, 2023, between Agrify Corporation and CP Acquisitions, LLC (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 6, 2023).
4.20		Senior Secured Amended, Restated and Consolidated Convertible Promissory Note dated January 25, 2024 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 25, 2024).

4.2		Form of Representative’s Warrant dated February 19, 2021 (incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 11, 2021)

4.3		Form of Representative’s Warrant dated January 27, 2021 (incorporated by reference to Exhibit 4.2 to the Registrant’s Amendment No. 2 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 26, 2021)

4.4		Form of Warrant issued to Noteholders (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)

4.5		Description of Registrant’s Securities (incorporated by reference to Exhibit 4.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 2, 2021)

4.6		Form of Common Stock Purchase Warrant dated January 28, 2022 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 26, 2022)

4.7		Form of Warrant Exchange Warrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2022).

4.8		Form of Note Exchange Warrant (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2022).

4.9		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2022)

4.10		Form of Common Warrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2022)

4.11		Common Stock Purchase Warrant, dated October 27, 2023 (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)

4.12		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2024).

4.13		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2024).

4.14		Amendment to Pre-Funded Common Stock Purchase Warrant between Agrify Corporation and CP Acquisitions, LLC dated as of June 30, 2024 (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2024).

4.15		Amendment to Pre-Funded Common Stock Purchase Warrant between Agrify Corporation and GIC Acquisitions, LLC dated as of June 30, 2024 (incorporated by reference to Exhibit 4.2 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2024).

4.21		Second Amended and Restated Junior Secured Promissory Note dated January 25, 2024 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 25, 2024).
4.22		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2024).
4.23		Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2024).
4.24		Amendment No. 1 to Senior Secured Amended, Restated and Consolidated Convertible Note between Agrify Corporation and CP Acquisitions, LLC (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2024).
4.25		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2024).
4.26		Third Amended and Restated Junior Secured Convertible Promissory Note dated as of May 21, 2024 (incorporated by reference to Exhibit 4.3 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2024).
4.27		Amendment to Pre-Funded Comon Stock Purchase Warrant between Agrify Corporation and CP Acquisitions, LLC dated as of June 30, 2024 (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2024).
4.28		Amendment to Pre-Funded Comon Stock Purchase Warrant between Agrify Corporation and GIC Acquisitions, LLC dated as of June 30, 2024 (incorporated by reference to Exhibit 4.2 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 3, 2024).
4.29		Junior Secured Convertible Promissory Note dated as of August 14, 2024 (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 14, 2024).
4.30		Amendment No. 1 to Junior Secured Convertible Promissory Note, dated as of October 18, 2024 (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 22, 2024).
4.31		Secured Amended, Restated and Consolidated Convertible Note (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 5, 2024).
4.32		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 21, 2024).
4.33		Pre-Funded Warrant dated December 12, 2024 (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2024).
10.1		Operating Agreement of Agrify-Valiant, LLC dated December 8, 2019 (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.2		Distribution Agreement dated June 7, 2019 between the Registrant and Bluezone Products, Inc.± (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.3		Distribution Agreement dated March 9, 2020 between the Registrant and Enozo Technologies Inc.± (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.4		Purchase Agreement dated as of July 28, 2020 between the Registrant and 4D Bios Inc.± (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)

4.16		Amendment to Pre-Funded Common Stock Purchase Warrant, dated as of August 28, 2024, by and between Agrify Corporation and CP Acquisitions, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 29, 2024).

4.17		Amendment to Pre-Funded Common Stock Purchase Warrant, dated as of August 28, 2024, by and between Agrify Corporation and GIC Acquisition LLC (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 29, 2024).

4.18		Amendment to Pre-Funded Common Stock Purchase Warrant, dated as of September 27, 2024, by and between Agrify Corporation and CP Acquisitions, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 1, 2024).

4.19		Amendment to Pre-Funded Common Stock Purchase Warrant, dated as of September 27, 2024, by and between Agrify Corporation and GIC Acquisition LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 1, 2024).

4.20		Secured Amended, Restated and Consolidated Convertible Note (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 5, 2024).

4.21		Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 21, 2024).

4.22		Pre-Funded Warrant dated December 12, 2024 (incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 16, 2024).

4.23		Form of Pre-Funded Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2025).

4.24±		Form of Secured Convertible Note dated May 22, 2025 (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2025).

4.25±		Second Amendment, dated May 22, 2025, to Secured Convertible Note issued on November 5, 2024 (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2025).

4.26±		Form of Secured Convertible Note dated August 25, 2025 (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 27, 2025).

4.27		Form of Pre-Funded Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 27, 2025).

4.28		Third Amendment, dated August 25, 2025, to Secured Convertible Note issued on November 5, 2024 (incorporated by reference to Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 27, 2025).

4.29		First Amendment, dated August 25, 2025, to Secured Convertible Notes issued on May 22, 2025 (incorporated by reference to Exhibit 4.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 27, 2025).

10.1†		2020 Omnibus Equity Incentive Plan (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)

10.2		Form of Indemnification Agreement with directors and executive officers (incorporated by reference to Exhibit 10.18 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 11, 2021)

10.3†		Agrify Corporation 2022 Omnibus Equity Incentive Plan, as amended (incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 30, 2025)

10.4†		Agrify Corporation 2022 Employee Stock Purchase Plan (incorporated by reference to Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 29, 2022)

10.5±		Purchase Agreement, dated as of August 28, 2024, by and between Agrify Corporation and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 29, 2024)

10.5†		Employment Agreement dated as of January 4, 2021 between the Registrant and Raymond Chang (incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 2, 2021)
10.6†		2020 Omnibus Equity Incentive Plan (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.7		Intellectual Property Assignment and Transfer Agreement by and among the Registrant, Agrify Brands, LLC and The Holden Company effective as of January 1, 2020 (incorporated by reference to Exhibit 10.16 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.8		Supply Agreement by and among the Registrant and Mack Molding Co. dated December 7, 2020 ± (incorporated by reference to Exhibit 10.15 to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on January 13, 2021)
10.9		Amended and Restated Operating Agreement of Agrify Brands, LLC effective as of August 12, 2020 (incorporated by reference to Exhibit 10.18 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
10.10		Form of Indemnification Agreement with directors and executive officers (incorporated by reference to Exhibit 10.18 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 11, 2021)
10.11†		Employment Agreement, dated as of November 10, 2021, between the Registrant and Timothy Oakes † (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 15, 2021)
10.12±		Form of Securities Purchase Agreement, dated as of January 25, 2022, between the Registrant and the Purchasers party thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 26, 2022
10.13±		Form of Securities Purchase Agreement, dated as of March 14, 2022, between the Registrant and High Trail Special Situations LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 18, 2022)
10.14†		Agrify Corporation 2022 Omnibus Equity Incentive Plan (incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 29, 2022)
10.15†		Agrify Corporation 2022 Employee Stock Purchase Plan (incorporated by reference to Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 29, 2022)
10.16†		Separation Agreement of Thomas Massie, dated as of July 8, 2022 (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2022).
10.17†		Employment Agreement, dated as of July 14, 2022, between the Registrant and Stuart Wilcox (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 14, 2022).
10.18±		Exchange Agreement, dated as of August 18, 2022, between the Registrant and High Trail Special Situations LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2022).
10.19±		Equity Distribution Agreement, dated as of October 18, 2022, between the Registrant and Canaccord Genuity LLC (incorporated by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 18, 2022).
10.20†		Employment Agreement, dated as of July 25, 2022, between the Registrant and Timothy Hayden (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 24, 2023)
10.21±		Exchange Agreement, dated as of March 8, 2023, between the Registrant and High Trail Special Situations LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 9, 2023)
10.22		Company and Investor Acknowledgment, dated as of October 27, 2023, between the Registrant and CP acquisitions LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
10.23		Letter Agreement, dated as of October 27, 2023, between the Registrant and High Trail Special Situations LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
10.24±		Modification Agreement, effective as of October 18, 2023, between the Registrant and Mack Molding Company (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2023)
10.25±		Purchase Agreement, dated as of August 28, 2024, by and between Agrify Corporation and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 29, 2024)

10.6		Registration Rights Agreement, dated as of August 28, 2024, by and between Agrify Corporation and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 29, 2024)

10.7†		Severance Agreement, dated November 5, 2024, between Agrify Corporation and Raymond Chang (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 5, 2024)

10.8		Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 21, 2024)

10.9		Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 21, 2024)

10.10#		Asset Purchase Agreement, dated as of December 31, 2024, among the registrant and CP Acquisitions, LLC (incorporated by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2025).

10.11†		Shared Services Agreement, dated March 21, 2025 with Vision Management Services, LLC for Chief Financial Officer Services (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 21, 2025).

10.12†±		Amended and Restated Shared Services Agreement, dated May 20, 2025, by and between Vision Management Services, LLC and Agrify Corporation (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2025).

10.13±		Purchase Agreement, dated May 20, 2025, by and between VCP IP Holdings, LLC and Agrify Corporation (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2025).

10.14±		Trademark and Recipe License Agreement, dated May 20, 2025, by and between MC Brands LLC and GTI Core, LLC (incorporated by referenced to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2025).

10.15±		Trademark and Recipe License Agreement, dated May 20, 2025, by and between For Success Holding Company and Core Growth, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2025).

10.16±		Trademark and Recipe License Agreement, dated May 20, 2025, by and between VCP IP Holdings, LLC and Core Growth, LLC (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 22, 2025).

10.17±		Amended and Restated Purchase Agreement, dated June 30, 2025, by and between Agrify Corporation VCP IP Holdings, LLC (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 8, 2025).

10.18±		Purchase Agreement, dated August 27, 2025, by and between VCP23, LLC and Agrify Corporation (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 27, 2025).

10.19±		Trademark and Recipe License Agreement, dated August 27, 2025, by and between VCP IP Holdings, LLC and GTI Core, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 27, 2025).

10.26		Registration Rights Agreement, dated as of August 28, 2024, by and between Agrify Corporation and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 29, 2024)
10.27		Amendment to Pre-Funded Common Stock Purchase Warrant, dated as of August 28, 2024, by and between Agrify Corporation and CP Acquisitions, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 29, 2024)
10.28		Amendment to Pre-Funded Common Stock Purchase Warrant, dated as of August 28, 2024, by and between Agrify Corporation and GIC Acquisition LLC (incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 29, 2024)
10.29		First Amendment to Modification and Settlement Agreement, dated as of August 30, 2024, by and between Agrify Corporation and Mack Molding Company. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 4, 2024)
10.30		Amendment to Pre-Funded Common Stock Purchase Warrant, dated as of September 27, 2024, by and between Agrify Corporation and CP Acquisitions, LLC (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 1, 2024)
10.31		Amendment to Pre-Funded Common Stock Purchase Warrant, dated as of September 27, 2024, by and between Agrify Corporation and GIC Acquisition LLC (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 1, 2024)
10.32		Severance Agreement, dated November 5, 2024, between Agrify Corporation and Raymond Chang (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 5, 2024)
10.33		Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 21, 2024)
10.34		Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 21, 2024)
14.1		Code of Ethics of Agrify Corporation Applicable To Directors, Officers And Employees (incorporated by reference to Exhibit 14.1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)
16.1		Letter from MATSUURA regarding change in certifying accountant (incorporated by reference to Exhibit 16.1 to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 22, 2024).
19.1*		Insider Trading Policy
21.1*		Subsidiaries of the Registrant
23.1*		Consent of Independent Registered Public Accounting Firm
31.1*		Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1		Agrify Corporation Clawback policy (incorporated by reference to Exhibit 97.1 to the Registration’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 4, 2024, as amended on April 29, 2024)
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

10.20±		Amended and Restated Trademark and Recipe License Agreement, dated August 27, 2025, by and between MC Brands LLC and GTI Core, LLC (incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 27, 2025).

14.1		Code of Ethics Applicable To Directors, Officers And Employees (incorporated by reference to Exhibit 14.1 to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 22, 2020)

19.1*		Insider Trading Policy

21.1*		Subsidiaries of the Registrant

23.1*		Consent of Independent Registered Public Accounting Firm

31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a- 14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Principal Financial and Accounting Officer Pursuant to Securities Exchange Act Rules 13a- 14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2**		Certification of Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

97.1		RYTHM, Inc. Clawback policy (incorporated by reference to Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 4, 2024, as amended on April 29, 2024)

101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Certain information has been omitted from this exhibit in reliance upon Item 601(a)(5) of Regulation S-K.

†

Indicates a management contract, compensatory plan, or arrangement.

Certain confidential portions of this exhibit were omitted pursuant to Item 601(b)(2)(ii) of Regulation S-K because the identified confidential portions (i) are not material and (ii) are customarily and actually treated as private or confidential by the Company.

Filed herewith.

Furnished herewith.

Item 16. Form 10-K Summary.

None.

5039

SIGNATURES

Pursuant to the requirements of ~~Section 13 or 15(d)~~ of the Securities Exchange Act of 1934, the registrant has duly caused this ~~Report~~report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AGRIFY CORPORATION
Date: March 21, 2025	By:	/s/ Benjamin Kovler
		Benjamin Kovler
		Chairman and Interim Chief Executive Officer
		(Principal Executive Officer and Principal Financial and Accounting Officer)

RYTHM, INC.

Date: March 3, 2026	By:	/s/ Benjamin Kovler
	Benjamin Kovler
	Chairman and Interim Chief Executive Officer
	(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following person on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Benjamin Kovler	Chairman and Interim Chief Executive Officer ~~and Director~~	March 213, ~~2025~~2026
Benjamin Kovler	(Principal Executive Officer ~~and Principal Financial and Accounting Officer~~)
/s/ Krishnan Varier	Director	March 21, 2025
/s/ Brad Asher	Chief Financial Officer	March 3, 2026
Brad Asher	(Principal Financial and Accounting Officer)
/s/ Krishnan Varier	Director	March 3, 2026
Krishnan Varier
/s/ Timothy Mahoney	Director	March 213, ~~2025~~2026
Timothy Mahoney
/s/ Max Holtzman	Director	March 213, ~~2025~~2026
Max Holtzman
/s/ Armon Vakili	Director	March 213, ~~2025~~2026
Armon Vakili
/s/ Peter Shapiro	Director	March 213, ~~2025~~2026
Peter Shapiro
/s/ Sanjay Tolia	Director	March 213, ~~2025~~2026
Sanjay Tolia
Date: March 3, 2026

~~Date: March 21, 2025~~41

51RYTHM, INC.

AGRIFY CORPORATION

Index to Consolidated Financial Statements

Fiscal Years Ended December 31, 2024 and 2023:
Fiscal Years Ended December 31, 2025 and 2024:
Independent Auditors’ Report (PCAOB ID # 7143)		F-2
Report of Independent Registered Public Accounting Firm (PCAOB ID # 7143)	F-2
Consolidated Financial Statements	F-3
Consolidated Balance Sheets	F-3	~~F-4~~
Consolidated Statements of Operations	F-4	~~F-5~~
Consolidated Statements of Stockholders’ Equity (Deficit)	F-5	~~F-6~~
Consolidated Statements of Cash Flows	F-7	~~F-8~~
Notes to Consolidated Financial Statements	F-9 - F-35	~~F-9 - F-46~~

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of ~~Agrify Corporation and Subsidiaries~~

RYTHM, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance ~~sheet~~sheets of ~~Agrify~~RYTHM, Inc. (formerly known as Agrify Corporation) (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the ~~year~~two ~~then~~years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the ~~year~~two ~~then~~years in the period ended December 31, 2025, in conformity with accounting principles generally ~~accepted~~ accepted in the United States of America.

The consolidated financial statements of the Company as of December 31, 2023, before the retrospective adjustments described in Notes 1 and 6, were audited by other auditors whose report, dated April 15, 2024, expressed an unqualified opinion on those statements. We have audited those retrospective adjustments to the 2023 consolidated financial statements, as reported in the financial statements as of and for the year ended December 31, 2024, related to discontinued operations as described in Notes 1 and 6. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures related to the Company’s 2023 consolidated financial statements other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2023 consolidated financial statements as a whole.

Basis for Opinion

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

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

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

Emphasis of Matter – Related Parties

As described in Note 3, Note 8, Note 10, Note 18, Note 21, and Note 23, the accompanying financial statements include significant transactions with a related party, and a significant portion of the Company’s operating, investing, and financing activities are conducted with this related party.

/s/ GuzmanGray

We have served as the Company’s auditor since 2024.

Costa Mesa, California

March 213, ~~2025~~2026

F-2

~~REPORT OF~~Item ~~INDEPENDENT~~1. ~~REGISTERED~~Financial ~~PUBLIC ACCOUNTING FIRM~~Statements

ToRYTHM, INC. ~~the~~(Formerly ~~Shareholders~~known ~~and~~as ~~Board of Directors of~~ Agrify Corporation ~~and Subsidiaries~~)

~~Opinion~~CONSOLIDATED onBALANCE ~~the Financial Statements~~SHEETS

~~We have audited, before the effects of the discontinued operations discussed in Note 1 and Note 6, the accompanying consolidated balance sheet of Agrify Corporation and Subsidiaries~~ (the “Company”) as of December 31, 2023 and the related consolidated statements of operations, stockholders’ (deficit) equity and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In ~~our opinion~~thousands, ~~before the effects of the discontinued operations discussed in Note 1 and Note 6, the financial statements present fairly, in~~ ~~all~~except ~~material~~share ~~respects, the financial position of the Company as of December 31, 2023,~~ and ~~the~~per ~~results~~share ~~of its operations and its cash flows for the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.~~data)

We were not engaged to audit, review, or apply any procedures to the effects of the discontinued operations discussed in Note 1 and Note 6 to the consolidated financial statements, and accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors.

	As of December 31,
	2025			2024
Assets
Current assets:
Cash and cash equivalents	$	32,218		$	31,170
Accounts receivable, net⁽¹⁾		9,317			30
Inventory, net⁽²⁾		4,045			500
Prepaid expenses and other current assets		1,970			398
Current assets associated with discontinued operations		—			2,596
Total current assets		47,550			34,694
Goodwill		9,713			9,713
Intangible assets, net		—			8,900
Related party prepaid license rights		49,400			—
Non-current assets associated with discontinued operations		14			715
Total assets	$	106,677		$	54,022

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable⁽³⁾	$	2,340		$	825
Accrued expenses and other current liabilities⁽⁴⁾		7,917			4,090
Long-term debt, current		3,621			522
Related party debt, current		27,000			10,000
Current liabilities associated with discontinued operations		2,082			9,242
Total current liabilities		42,960			24,679
Warrant liabilities⁽⁵⁾		697			996
Long-term debt, net of current		5,000			1
Related party debt, net of current		45,000			—
Non-current liabilities associated with discontinued operations		—			257
Total liabilities		93,657			25,933
Commitments and contingencies (Note 23)
Stockholders’ equity:
Common Stock, $0.001 par value per share, 35,000,000 shares authorized; 2,149,128 and 1,952,032 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively		2			2
Preferred Stock, $0.001 par value per share, 2,895,000 shares authorized, no shares issued or outstanding		—			—
Preferred A Stock, $0.001 par value per share, 105,000 shares authorized, no shares issued or outstanding		—			—
Additional paid-in capital		353,818			335,400
Accumulated deficit		(340,800	)		(307,313	)
Total stockholders’ equity		13,020			28,089
Total liabilities and stockholders’ equity	$	106,677		$	54,022

~~Explanatory~~(1) ~~Paragraph~~Include –$7.0 ~~Going~~million ~~Concern~~and none from related parties as of December 31, 2025 and December 31, 2024, respectively.

~~The~~(2) ~~accompanying~~Included ~~financial~~$392 ~~statements~~thousand ~~have~~and ~~been~~none ~~prepared~~from ~~assuming~~related ~~that the~~parties ~~Company will continue~~ as aof ~~going~~December ~~concern.~~31, As2025 ~~more~~and ~~fully~~December ~~described in Note 1~~31, ~~the Company has a significant working capital deficiency~~2024, ~~has~~ ~~incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations~~respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Basis for~~(3) ~~Opinion~~Include $152 thousand and none due to a related party as of December 31, 2025 and December 31, 2024, respectively.

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

(4)	Include $4.7 million and $487 thousand due to related parties as of December 31, 2025 and December 31, 2024, respectively.
(5)	As of December 31, 2025 and December 31, 2024, the number of outstanding warrants subject to liability classification was 40,017, of which 15,394 are held by RSLGH, a related party.

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

~~/s/~~RYTHM, ~~Marcum~~INC. (Formerly ~~llp~~known as Agrify Corporation)

~~Marcum~~CONSOLIDATED STATEMENTS ~~llp~~OF OPERATIONS

We(In ~~served~~thousands, except asshare ~~the~~and ~~Company’s~~per ~~auditor~~share ~~from 2019 through 2024.~~data)

April 15, 2024

	Year Ended December 31,
	2025			2024
Revenue⁽¹⁾	$	17,283		$	18
Cost of goods sold		7,093			89
Gross profit (loss)		10,190			(71	)

Selling, general and administrative⁽²⁾		34,055			7,182
Impairment of long-lived assets		8,471			—
Change in contingent consideration		—			(2,180	)
Total operating expenses		42,526			5,002

Operating loss from continuing operations		(32,336	)		(5,073	)

Interest expense, net⁽³⁾		(3,203	)		(256	)
Change in fair value of warrant liabilities		299			(17,902	)
Other income, net		500			—
Total other expense, net		(2,404	)		(18,158	)
Loss from continuing operations before income taxes		(34,740	)		(23,231	)
Income tax provision		—			2
Loss from continuing operations, net of income taxes		(34,740	)		(23,229	)

Loss from discontinued operations		(2,054	)		(6,624	)
Gain (loss) on disposal of Extraction and Cultivation business		3,537			(11,893	)
Income (loss) from discontinued operations, net of income taxes		1,483			(18,517	)

Net loss		(33,257	)		(41,746	)

Net loss per share:
Basic and diluted
Continuing operations	$	(17.42	)	$	(22.77	)
Discontinued operations		0.74			(18.15	)
Net loss per share – basic and diluted ⁽⁴⁾		(16.68	)		(40.92	)
Weighted average common shares outstanding - basic and diluted ⁽⁴⁾		1,993,947			1,020,185

~~F-3~~(1) Include $8.2 million and none for the year ended December 31, 2025 and December 31, 2024, respectively, in each case from related parties.

~~Item 1~~(2) Include $10.6 ~~Financial~~million ~~Statements~~and $331 thousand for the year ended December 31, 2025 and December 31, 2024, respectively, in each case from related parties.

~~AGRIFY CORPORATION~~(3) Include $4.1 million and $156 thousand for the year ended December 31, 2025 and December 31, 2024, respectively, in each case from related parties.

~~CONSOLIDATED BALANCE~~(4) ~~SHEETS~~Amounts for the year ended December 31, 2024 have been adjusted to retroactively reflect the 1-for-15 reverse stock split on October 8, 2024. Additional information regarding the reverse stock split may be found in Note 1 – Overview, included in the notes to the consolidated financial statements.

(In addition to the transactions described ~~thousands~~above, ~~except~~the ~~share~~Company ~~and~~engaged ~~per~~in ~~share~~other ~~data)~~routine transactions with related parties in the ordinary course of business. Such transactions were not material, individually or in aggregate, to the consolidated financial statements for the periods presented.

	As of December 31,
	2024			2023
Assets
Current assets:
Cash and cash equivalents	$	31,170		$	434
Accounts receivable, net of allowance for credit losses of $1,702 and $1,766 at December 31, 2024 and 2023, respectively		348			855
Inventory, net		1,579			4,976
Prepaid expenses and other current assets		1,597			1,890
Current assets of discontinued operations		—			15,854
Total current assets		34,694			24,009
Property and equipment, net		186			595
Operating lease right-of-use assets		504			520
Goodwill		9,713			—
Intangible assets		8,900			—
Other non-current assets		25			28
Non-current assets of discontinued operations		—			20,118
Total assets	$	54,022		$	45,270
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	2,074		$	4,388
Accrued expenses and other current liabilities		9,297			8,259
Operating lease liabilities, current		261			207
Long-term debt, current		522			766
Related party debt, current		10,000			4,444
Contract liabilities		2,525			3,008
Current liabilities of discontinued operations		—			20,177
Total current liabilities		24,679			41,249
Warrant liabilities		996			1,290
Operating lease liabilities, net of current		257			331
Long-term debt, net of current		1			16,047
Non-current liabilities of discontinued operations		—			1,063
Total liabilities		25,933			59,980
Commitments and contingencies (Note 18)
Stockholders’ equity (deficit):
Common Stock, $0.001 par value per share, 35,000,000 and 10,000,000 shares authorized at December 31, 2024 and 2023, respectively,1,952,032 and 113,416 shares issued and outstanding at December 31, 2024 and 2023, respectively (1)		2			—
Preferred Stock, $0.001 par value per share, 2,895,000 shares authorized, no shares issued or outstanding		—			—
Preferred A Stock, $0.001 par value per share, 105,000 shares authorized, no shares issued or outstanding		—			—
Additional paid-in capital		335,400			250,857
Accumulated deficit		(307,543	)		(265,797	)
Total stockholders’ equity (deficit) attributable to Agrify Corporation		27,859			(14,940	)
Non-controlling interests		230			230
Total stockholders’ equity (deficit)		28,089			(14,710	)
Total liabilities and stockholders’ equity (deficit)	$	54,022		$	45,270

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

~~(1) Periods presented have been adjusted to retroactively reflect the 1~~F-for-20 reverse stock split on July 5, 2023, and for the 1-for-15 reverse stock split on October 8, 2024. Additional information regarding the reverse stock splits may be found in Note 1 - Overview, Basis of Presentation, and Significant Accounting Policies, included in the notes to the consolidated financial statements.4

~~The accompanying~~RYTHM, ~~notes~~INC. ~~are~~(Formerly anknown ~~integral~~as ~~part~~Agrify ~~of these consolidated financial statements.~~Corporation)

~~F-4~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

~~AGRIFY CORPORATION~~(In thousands, except share and per share data)

CONSOLIDATED STATEMENTS OF OPERATIONS

	Common Stock					Additional Paid-In-			Accumulated			Total Stockholders’ Equity
	Shares			Amount		Capital			Deficit			(Deficit)
Balance at January 1, 2024		113,416		$	—	$	250,857		$	(265,567	)	$	(14,710	)
Issuance of Common Stock in connection with private placement, net		203,988			1		25,792			—			25,793
Senorita Acquisition		97,300			—		18,836			—			18,836
Conversion of related party debt into Pre-Funded Warrants		—			—		13,980			—			13,980
Excess of related party debt and Pre-Funded Warrants conversion		—			—		10,044			—			10,044
Issuance of equity classified Pre-Funded Warrants		—			—		6,791			—			6,791
Issuance of Common Stock and Pre-Funded Warrants through public offering		184,000			—		2,123			—			2,123
Conversion of Convertible Note		178,109			—		1,731			—			1,731
Exercise of liability classified warrants, net of forfeitures		52,681			—		1,680			—			1,680
Exercise of Pre-Funded Warrants		647,373			—		1,355			—			1,355
Stock-based compensation		—			—		1,165			—			1,165
Contribution from troubled debt restructuring with related party		—			—		676			—			676
Issuance of common shares (IONIC Stock Subscription Payable)		189,645			—		345			—			345
Exercise of Placement Agent Warrants		4,482			—		26			—			26
Stock split share adjustment		(283	)		1		(1	)		—			—
Cashless exercise of High Trail Warrants		208,814			—		—			—			—
Issuance of vested RSUs		72,397			—		—			—			—
Issuance of vested RSUs, net of shares held back to offset tax		71			—		—			—			—
Issuance of held-back shares from Sinclair acquisition		39			—		—			—			—
Net loss		—			—		—			(41,746	)		(41,746	)
Balance at December 31, 2024		1,952,032		$	2	$	335,400		$	(307,313	)	$	28,089

~~(In thousands,~~The ~~except~~accompanying ~~share~~notes ~~and~~are ~~per~~an ~~share~~integral ~~data)~~part of these consolidated financial statements.

	Year Ended December 31,
	2024			2023
Revenue	$	9,680		$	15,142
Cost of goods sold		9,015			11,124
Gross profit		665			4,018
Selling, general and administrative		12,305			16,057
Research and development		743			2,295
Change in contingent consideration		(2,180	)		(1,322	)
Gain on early termination of lease		(39	)		—
Loss on disposal on property and equipment		51			12
Total operating expenses		10,880			17,042
Operating loss from continuing operations		(10,215	)		(13,024	)
Interest expense, net		(256	)		(2,145	)
Change in fair value of warrant liabilities		(17,902	)		4,695
Loss on extinguishment of long-term debt, net		—			(4,311	)
Other income, net		19			1,358
Total other expense, net		(18,139	)		(403	)
Loss from continuing operations before income taxes		(28,354	)		(13,427	)
Income tax (expense) benefit		2			(2	)
Loss from continuing operations, net of income taxes		(28,352	)		(13,429	)
Loss from discontinued operations		(1,501	)		(5,221	)
Loss on disposal of Cultivation business		(11,893	)		—
Income tax effect on discontinued operations		—			—
Loss from discontinued operations, net of income taxes		(13,394	)		(5,221	)
Net loss		(41,746	)		(18,650	)
Income attributable to non-controlling interest		—			1
Net loss attributable to Agrify Corporation	$	(41,746	)	$	(18,649	)
Net loss per share:
Basic and diluted
Continuing operations	$	(27.79	)	$	(135.11	)
Discontinued operations	$	(13.13	)	$	(52.53	)
Net loss per share attributable to Common Stockholders – basic and diluted (1)	$	(40.92	)	$	(187.64	)
Weighted average common shares outstanding - basic and diluted (1)		1,020,185			99,391

F-5

(1) Periods presented have been adjusted to retroactively reflect the 1-for-20 reverse stock split on July 5, 2023, and for the 1-for-15 reverse stock split on October 8, 2024. Additional information regarding reverse stock splits may be found in Note 1 - Overview, Basis of Presentation, and Significant Accounting Policies, included elsewhere in the notes to the consolidated financial statements.

	Common Stock					Additional Paid-in-			Accumulated			Total Stockholders’
	Shares			Amount		Capital			Deficit			Equity
Balance at January 1, 2025		1,952,032		$	2	$	335,400		$	(307,313	)	$	28,089
Conversion of related party convertible note to pre-funded warrants		—			—		10,000			—			10,000
Issuance of pre-funded warrants in lieu of cash payments on related party shared services agreement		—			—		3,771			—			3,771
Issuance or accrual of pre-funded warrants in lieu of cash interest payments on related party debt		—			—		2,644			—			2,644
Stock-based compensation		—			—		2,157			—			2,157
Issuance or accrual of pre-funded warrants in lieu of cash interest payments		—			—		183			—			183
Issuance of vested RSUs, net of shares held back to offset tax		83,028			—		(337	)		—			(337	)
Exercise of Pre-Funded Warrants		114,086			—		—			—			—
Cancellation of common shares		(18	)		—		—			—			—
Impairment of non-controlling interests		—			—		—			(230	)		(230	)
Net loss		—			—		—			(33,257	)		(33,257	)
Balance at December 31, 2025		2,149,128		$	2	$	353,818		$	(340,800	)	$	13,020

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

F-56

~~AGRIFY CORPORATION~~RYTHM, INC. (Formerly known as Agrify Corporation)

CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~CASH ~~EQUITY~~FLOWS ~~(DEFICIT)~~

(In thousands, except share and per share data)

	Common Stock						Preferred Stock				Preferred A Stock				Additional Paid-In-		Accumulated			Total Stockholders’ Equity (Deficit) attributable			Non- Controlling			Total Stockholders’ Equity
	Year Ended December 31,
	Shares			Amount			Shares		Amount		Shares		Amount		Capital		Deficit			to Agrify			Interests			(Deficit)
	2025			2024
Balance at January 1, 2023		69,220		$	—			—	$	—		—	$	—	$	237,876	$	(247,148	)	$	(9,272	)	$	231		$	(9,041	)
Cash flows from operating activities:
Stock-based compensation		—			—			—		—		—		—		2,662		—			2,662			—			2,662
Net loss	$	(33,257	)	$	(41,746	)
Issuance of Common Stock through an “at the market” offering, net of fees		21,539			—			—		—		—		—		1,545		—			1,545			—			1,545
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Issuance of held-back shares to Lab Society		33			—			—		—		—		—		—		—			—			—			—
Depreciation and amortization		6,156			1,421
Issuance of Common Stock to Pure Pressure		24			—			—		—		—		—		—		—			—			—			—
Amortization of debt discount		—			(47	)
Vesting of restricted stock units		1			—			—		—		—		—		—		—			—			—			—
Non-cash interest expense		2,829			—
Exercise of prefunded warrants in private placement		5,664			—			—		—		—		—		—		—			—			—			—
Lease expense		156			—
Issuance of equity classified warrants		—			—			—		—		—		—		1,554		—			1,554			—			1,554
Impairment of right-of-use assets		24			—
Exchange of private placement debt into equity classified warrants		—			—			—		—		—		—		3,877		—			3,877			—			3,877
Impairment of long-lived assets		8,471			—
Conversion of Exchange Note		4,638			—			—		—		—		—		2,146		—			2,146			—			2,146
Stock-based compensation expense		2,157			1,165
Conversion of Convertible Note		10,241			—			—		—		—		—		1,172		—			1,172			—			1,172
Change in fair value of warrant liabilities		(299	)		17,902
Proceeds from Employee Stock Purchase Plan Shares		167			—			—		—		—		—		25		—			25			—			25
Change in provision for credit losses, net		268			(336	)
Reverse stock split fractional share settlement		1,889			—			—		—		—		—		—		—			—			—			—
Change in inventory reserve		552			(747	)
Net loss		—			—			—		—		—		—		—		(18,649	)		(18,649	)		(1	)		(18,650	)
Loss on abandonment of CIP projects		—			31
Balance December 31, 2023		113,416		$	—			—	$	—		—	$	—	$	250,857	$	(265,797	)	$	(14,940	)	$	230		$	(14,710	)
Loss on inventory write-down		—			—
Gain on disposal of property and equipment		(2	)		14
Gain on exit of Extraction business		(3,534	)		—
Gain on early termination of lease		—			(50	)
Gain on settlement of contingent liability		—			(5,935	)
Loss on disposal of Cultivation business		—			11,893
Change in contingent consideration		—			(2,180	)
Changes in operating assets and liabilities, net of acquisitions:		—			—
Accounts receivable		(1,788	)		646
Accounts receivable - related party		(6,978	)		—
Inventory		(2,886	)		8,341
Prepaid expenses and other current assets		(1,245	)		1,872
Operating lease right-of-use assets		—			528
Other non-current assets		12			46
Accounts payable		151			(4,562	)
Accounts payable - related party		152			—
Accrued expenses and other current liabilities		(3,825	)		1,258
Accrued expenses and other current liabilities - related party		10,677			—
Operating lease liabilities		(161	)		(519	)
Contract liabilities		(1,167	)		(578	)
Net cash and cash equivalents used in operating activities		(23,537	)		(11,583	)
Cash flows from investing activities:
Related party transaction with MC Brands		(5,075	)		—
Related party transaction with VCP		(50,000	)		—
Purchases of property and equipment		—			(4	)
Proceeds from disposal of property and equipment		—			20
Issuance of loans receivable		—			(400	)
Proceeds from repayment of loan receivable		—			330
Net cash and cash equivalents used in investing activities		(55,075	)		(54	)
Cash flows from financing activities:
Proceeds from related party notes payable		72,000			14,453
Proceeds from third-party notes payable		8,000			—
Repayments of third-party notes payable		(3	)		—
Payments for taxes related to net share settlement of equity awards		(337	)		—
Proceeds from issuance of Common Stock through an S-1 and Pre-Funded Warrants offering		—			2,123
Proceeds from issuance of Common Stock through IONIC Stock Subscription		—			345
Proceeds from issuance of Common Stock in connection with private placement, net		—			25,793
Proceeds from exercise of Pre-Funded Warrants		—			36
Payments on insurance financing loans		—			(377	)
Net cash and cash equivalents provided by financing activities continuing operations		79,660			42,373
Net increase in cash and cash equivalents		1,048			30,736
Cash and cash equivalents at the beginning of period	$	31,170		$	434
Cash and cash equivalents of discontinued operations, beginning of period		—			—
Cash and cash equivalents of discontinued operations, end of period		—			—
Cash and cash equivalents at the end of period	$	32,218		$	31,170

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

F-67

	Common Stock					Preferred Stock				Preferred A Stock				Additional Paid-in-			Accumulated			Total Stockholders’ Equity (Deficit) attributable			Non- Controlling		Total Stockholders’ Equity
	Year Ended December 31,
	Shares			Amount		Shares		Amount		Shares		Amount		Capital			Deficit			to Agrify			Interests		(Deficit)
	2025			2024
Balance at January 1, 2024		113,416		$	—		—	$	—		—	$	—	$	250,857		$	(265,797	)	$	(14,940	)	$	230	$	(14,710	)
Supplemental disclosures
Stock-based compensation		—			—		—		—		—		—		1,165			—			1,165			—		1,165
Cash paid for interest	$	9		$	—
Issuance of Common Stock and Pre-Funded Warrants through public offering		184,000			—		—		—		—		—		2,123			—			2,123			—		2,123
Supplemental disclosure of non-cash investing and financing activities
Issuance of held-back shares from Sinclair acquisition		39			—		—		—		—		—		—			—			—			—		—
Conversion of related party debt to common stock	$	10,000		$	10,044
Cashless exercise of High Trail Warrants		208,814			—		—		—		—		—		—			—			—			—		—
Issuance of pre-funded warrants in lieu of related party shared services agreement	$	3,771		$	—
Issuance of vested RSUs, net of shares held back to offset tax		71			—		—		—		—		—		—			—			—			—		—
Issuance of pre-funded warrants in lieu of related party cash interest	$	2,644		$	—
Exercise of Pre-Funded Warrants		647,373			—		—		—		—		—		1,355			—			1,355			—		1,355
Issuance of pre-funded warrants in lieu of cash interest	$	183		$	—
Issuance of common shares (IONIC Stock Subscription Payable)		189,645			—		—		—		—		—		345			—			345			—		345
Reclassification of accounts payable and accrued interests to notes payable	$	99		$	—
Exercise of liability classified warrants, net of forfeitures		52,681			—		—		—		—		—		1,680			—			1,680			—		1,680
Conversion of liability classified pre-funded warrants to equity	$	—		$	20,771
Exercise of Placement Agent Warrants		4,482			—		—		—		—		—		26			—			26			—		26
Stock and warrants issued in connection with business combination	$	—		$	18,836
Issuance of Common Stock in connection with private placement, net		203,988			1		—		—		—		—		25,792			—			25,793			—		25,793
Fair value of warrants in connection with reclassification and issuance	$	—		$	6,791
Senorita Acquisition		97,300			—		—		—		—		—		18,836			—			18,836			—		18,836
Conversion of convertible notes into equity	$	—		$	1,731
Issuance of vested RSUs		72,397			—		—		—		—		—		—			—			—			—		—
Cashless exercise of liability classified warrants	$	—		$	1,680
Stock split share adjustment		(283	)		1		—		—		—		—		(1	)		—			—			—		—
Deemed contribution from troubled debt restructuring with related party	$	—		$	676
Deemed Contribution from troubled debt restructuring with related party		—			—		—		—		—		—		676			—			676			—		676
Financing of prepaid insurance	$	—		$	14
Issuance of equity classified Pre-Funded Warrants		—			—		—		—		—		—		6,791			—			6,791			—		6,791
Excess of related party debt and Pre-Funded Warrants conversion		—			—		—		—		—		—		10,044			—			10,044			—		10,044
Conversion of related party debt into Pre-Funded Warrants		—			—		—		—		—		—		13,980			—			13,980			—		13,980
Conversion of Convertible Note		178,109			—		—		—		—		—		1,731			—			1,731			—		1,731
Net loss		—			—		—		—		—		—		—			(41,746	)		(41,746	)		—		(41,746	)
Balance December 31, 2024		1,952,032		$	2		—	$	—		—	$	—	$	335,400		$	(307,543	)	$	27,859		$	230	$	28,089

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

F-78

~~AGRIFY CORPORATION~~Note 1 — Overview

~~CONSOLIDATED STATEMENTS~~Description OFof ~~CASH FLOWS~~Business

RYTHM, Inc. (formerly Agrify Corporation) (together with its subsidiaries, the “Company” or “RYTHM”) delivers well-being to consumers through its portfolio of hemp-derived THC products and iconic licensed brands. The Company’s portfolio of consumer-packaged goods brands includes RYTHM, incredibles, Dogwalkers, Beboe, &Shine, Doctor Solomon’s, Good Green and Señorita. The Señorita brand offers consumers hemp-derived tetrahydrocannabinol (“THC”) beverages that mirror well-known cocktails like a margarita – in four flavors – classic Lime Jalapeño Margarita, Mango Margarita, Paloma and Ranch Water. Known for its clean, fresh taste and commitment to high-quality, natural ingredients, Señorita offers a low-sugar, low-calorie alternative to alcoholic beverages and is available at top retailers including Total Wine, ABC Fine Wine & Spirits, and Binny’s in eleven U.S. states and Canada, with plans for expansion and future availability in premier on-premises destinations. Other hemp-derived products including RYTHM beverages and incredibles and Beboe edible products are primarily sold online and through direct-to-retail partnerships. In addition ~~thousands~~to the sale of hemp-derived products (“Non-licensing Revenue”), the Company licenses its brands to be manufactured and distributed in exchange for a licensing fee (“Licensing Revenue”). Throughout the Form 10-K, the terms “intellectual property”, “intellectual property rights”, “brands”, “trademarks”, “tradenames”, “brand rights” and “Prepaid License Rights” are used interchangeably.

	Year Ended December 31,
	2024			2023
Cash flows from operating activities:
Net loss attributable to Agrify Corporation	$	(41,746	)	$	(18,649	)
Adjustments to reconcile net loss attributable to Agrify Corporation to net cash and cash equivalents used in operating activities:
Depreciation and amortization		1,421			1,896
Amortization of debt premium		(47	)		(109	)
Amortization of debt issuance costs		—			24
Stock-based compensation expense		1,165			2,662
Change in fair value of warrant liabilities		17,902			(4,695	)
Loss on extinguishment of long-term debt, net		—			4,311
Change in provision for credit losses, net		(336	)		(15,261	)
Change in provision for inventory		(747	)		(14,823	)
Loss on abandonment of CIP projects		31			—
(Gain) loss on disposal of property and equipment		14			(63	)
Gain on early termination of lease		(50	)		—
Gain on settlement of contingent liability		(5,935	)		—
Loss on disposal of Cultivation business		11,893			—
Change in contingent consideration		(2,180	)		—
Income attributable to non-controlling interests		—			(1	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		646			1,347
Inventory		8,341			17,158
Prepaid expenses and other current assets		1,872			(566	)
Operating lease right-of-use assets		528			954
Other non-current assets		46			170
Accounts payable		(4,562	)		108
Accrued expenses and other current liabilities		1,258			(4,473	)
Operating lease liabilities		(519	)		(872	)
Contract liabilities		(578	)		(93	)
Net cash and cash equivalents used in operating activities		(11,583	)		(30,975	)
Cash flows from investing activities:
Purchases of property and equipment		(4	)		(59	)
Proceeds from disposal of property and equipment		20			311
Proceeds from sale of marketable securities		—			10,461
Issuance of loans receivable		(400	)		(591	)
Proceeds from repayment of loan receivable		330			15,057
Net cash and cash equivalents (used in) provided by investing activities		(54	)		25,179
Cash flows from financing activities:
Proceeds from issuance of Common Stock through an S-1 and Pre-Funded Warrants offering		2,123			—
Proceeds from issuance of Common Stock through an “at the market” offering, net of fees		—			1,545
Proceeds from issuance of Common Stock through IONIC Stock Subscription		345			—
Proceeds from the issuance of Common Stock in connection with private placement, net		25,793			—
Proceeds from Employee Stock Purchase Plan Shares		—			25
Proceeds from exercise of Pre-Funded Warrants		36			—
Proceeds from issuance of warrants in settlement agreement		—			1,554
Proceeds from issuance of related party notes		14,453			4,444
Repayments of notes payable, other		—			(71	)
Repayment of debt in private placement		—			(10,307	)
Payments on other financing loans		—			(5	)
Payments on insurance financing loans		(377	)		(1,332	)
Payments of financing leases		—			(80	)
Net cash and cash equivalents provided by (used in) financing activities continuing operations		42,373			(4,227	)
Net increase (decrease) in cash and cash equivalents		30,736			(10,023	)
Cash and cash equivalents at the beginning of period		434			10,457
Cash and cash equivalents of discontinued operations, beginning of period		—			—
Cash and cash equivalents of discontinued operations, end of period		—			—
Cash and cash equivalents at the end of period	$	31,170		$	434
Supplemental disclosures
Cash paid for interest	$	—		$	76
Supplemental disclosure of non-cash investing and financing activities
Fair value of warrants in connection with reclassification and issuance	$	6,791		$	5,432
Financing of prepaid insurance	$	14		$	1,694
Cashless exercise of liability classified warrants	$	1,680		$	—
Conversion of related party debt to equity	$	10,044		$	—
Transfer of property and equipment to inventory	$	—		$	33
Conversion of liability classified pre-funded warrants to equity	$	20,771		$	—
Deemed contribution from troubled debt restructuring with related party	$	676		$	—
Stock and warrants issued in connection with business combination	$	18,836		$	—
Conversion of convertible notes into equity	$	1,731		$	3,306

RYTHM has also historically been a leading provider of innovative cultivation and extraction solutions for the cannabis industry. Prior to the exit of the extraction business on March 30, 2025, the Company’s comprehensive extraction product line (“the Extraction Business”), which included hydrocarbon, alcohol, solventless, post-processing, and lab equipment, empowered cannabis producers to maximize the quantity and quality of extract required for premium concentrates. Additionally, prior to its sale on December 31, 2024, the Company’s proprietary micro-environment-controlled Agrify Vertical Farming Units (“VFUs”) enabled cultivators to produce high quality products for the cannabis.

The Company was ~~accompanying~~formed ~~notes~~in ~~are~~the anState ~~integral~~of ~~part~~Nevada on June 6, 2016 as Agrinamics, Inc., and subsequently changed its name to Agrify Corporation. On August 27, 2025, the Company filed a Certificate of ~~these~~Amendment ~~consolidated~~to ~~financial~~the ~~statements~~Articles of Incorporation of the Company with the Secretary of State of Nevada, to effect a change in the Company’s name from Agrify Corporation to RYTHM, Inc., effective as of September 2, 2025. In connection with the name change, the Company’s trading symbol on the Nasdaq Capital Market changed from “AGFY” to “RYM” effective as of the open of trading on September 2, 2025. The Company is sometimes referred to herein by the words “we,” “us,” “our,” and similar terminology.

FThe Company has thirteen wholly-8owned consolidated subsidiaries, which are collectively referred to as the “Subsidiaries” and seven out of thirteen subsidiaries are related to discontinued operations.

~~AGRIFY~~On ~~CORPORATION~~December 12, 2024, the Company acquired certain assets from Double or Nothing, LLC (“Double or Nothing”), the owner and creator of the Señorita brand of hemp-derived drinks as part of the Company’s strategic plan to reposition itself as a distributor of hemp-derived THC beverages and similar products.

~~NOTES~~On TODecember ~~CONSOLIDATED~~31, 2024, ~~FINANCIAL~~the ~~STATEMENTS~~Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with CP Acquisitions, LLC (“CP”), an entity affiliated with Raymond Chang, the Company’s former Chairman and Chief Executive Officer. Under the Purchase Agreement, CP acquired assets from the Company relating to the Company’s VFUs, including the related Agrify total-turnkey (“TTK”) solution assets and Agrify InsightsTM software solutions (collectively the “Cultivation Business”). The sale of the Cultivation Business occurred following signing on December 31, 2024. The results of the Cultivation Business are presented as discontinued operations in the consolidated statements of operations and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of the Cultivation Business associated with discontinued operations in the consolidated balance sheets as of December 31, 2025 and December 31, 2024. For further discussion on the discontinued operations, refer to Note 17 included elsewhere in the notes to the consolidated financial statements.

~~Note~~On March 30, 2025, the Company 1approved —the ~~Overview~~winding down of the Extraction Business by March 31, ~~Basis~~2025, including but not limited to, the sale or other disposal of ~~Presentation~~all remaining assets constituting the Extraction Business, the cessation of all business operations related to the Extraction Business, the termination of any outstanding contracts related to the Extraction Business, and ~~Significant~~termination ~~Accounting~~of ~~Policies~~any employees primarily involved in the Extraction Business. The results of the Extraction Business are presented as discontinued operations in the consolidated statements of operations and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of the Extraction Business associated with discontinued operations in the consolidated balance sheets as of December 31, 2025 and December 31, 2024. The balances as of December 31, 2024 reflect historical carrying values, without remeasurement. For further discussion on the discontinued operations, refer to Note 17 included elsewhere in the notes to the consolidated financial statements.

~~Description of Business~~F-9

~~Agrify~~On isMay a20, ~~developer~~2025, we acquired from VCP IP Holdings, LLC (“VCP”) an indirect wholly-owned subsidiary of ~~branded~~Green ~~innovative~~Thumb, ~~solutions~~a ~~for~~related party, 100% of the ~~cannabis~~equity ~~and~~interests ~~hemp~~of ~~industries.~~MC ~~Our~~Brands, ~~Señorita~~LLC ~~brand~~pursuant ~~offers~~to ~~consumers~~which ~~hemp~~we obtained rights relating to MC Brands, LLC and its wholly-~~derived~~owned ~~tetrahydrocannabinol~~subsidiary Core Growth LLC (together referred to as “~~THC~~MC Brands”). ~~beverages~~The ~~that~~assets ~~mirror well-known~~of ~~cocktails~~MC ~~like~~Brands aconsist ~~margarita~~primarily –of inintellectual ~~three~~property ~~flavors~~rights –associated with ~~classic~~the ~~Lime~~Incredibles ~~Jalapeño~~brand. ~~Margarita,~~Concurrent ~~Mango~~with ~~Margarita~~the transaction, ~~and~~we ~~Paloma. Known~~entered ~~for~~into ~~its~~a ~~clean,~~license ~~fresh~~agreement ~~taste~~with ~~and~~GTI ~~commitment~~Core, ~~to high-quality~~LLC, ~~natural~~(“GTI ~~ingredients~~Core”), an ~~Señorita~~indirect ~~offers~~subsidiary aof ~~low-sugar~~Green Thumb, ~~low-calorie alternative~~pursuant to ~~alcoholic~~which ~~beverages~~GTI ~~and~~Core iswas ~~available~~granted atthe ~~top~~right ~~retailers~~to ~~including~~use ~~Total~~the ~~Wine,~~incredibles ~~ABC~~brand ~~Fine~~in ~~Wine~~connection &with its ~~Spirits,~~existing ~~and~~businesses. ~~Binny’s in~~Consideration ~~nine~~payable ~~U.S.~~by ~~states~~GTI ~~and~~Core ~~Canada,~~under ~~with~~the ~~plans~~license ~~for~~agreement ~~expansion~~consists ~~and~~of ~~future~~a ~~availability~~monthly license fee payable in ~~premier~~cash. We ~~on-premises~~began ~~destinations~~recognizing licensing revenue under this agreement in May 2025.

~~In addition~~On toAugust ~~beverages~~27, ~~Agrify~~2025, ~~has~~we ~~also~~acquired from ~~historically~~VCP23, ~~been~~LLC aan ~~leading~~indirect ~~provider~~wholly-owned subsidiary of ~~innovative~~Green ~~cultivation~~Thumb, ~~and~~100% ~~extraction~~of ~~solutions~~the ~~for~~equity ~~the~~interests of VCP IP Holdings, LLC pursuant to which ~~cannabis~~we ~~industry~~obtained rights relating to VCP IP Holdings, LLC. The ~~Company’s~~assets ~~comprehensive~~of ~~extraction~~VCP ~~product~~IP ~~line~~Holdings, ~~which~~consist ~~includes~~primarily ~~hydrocarbon~~of intellectual property rights to the RYTHM, ~~alcohol~~Beboe, ~~solventless~~Dogwalkers, ~~post-processing~~Doctor Solomon’s, & Shine, and ~~lab~~Good ~~equipment,~~Green ~~empowers~~brands ~~producers~~(these torights, ~~maximize~~together with the ~~quantity~~incredibles brand ~~and~~rights, ~~quality~~referred ofto ~~extract~~as ~~required~~“Brand ~~for~~Rights”). ~~premium~~Concurrent ~~concentrates.~~with ~~Additionally~~the transaction, we entered into a license agreement with GTI ~~prior~~Core pursuant to ~~its~~which ~~sale~~GTI onCore ~~December~~was ~~31,~~granted ~~2024,~~the ~~our~~right ~~proprietary~~to ~~micro-environment-controlled~~use ~~Agrify~~the ~~Vertical~~Brand ~~Farming~~Rights ~~Units~~in ~~(“VFUs”) enabled~~connection ~~cultivators~~with toits ~~produce~~existing ~~high~~businesses. ~~quality~~Consideration payable ~~products~~by ~~for~~GTI Core under the ~~cannabis~~license ~~industry~~agreement consists of a monthly license fee payable in cash. We began recognizing licensing revenue under this agreement in November 2025.

~~The Company~~Reverse ~~was~~Stock formed in the State of Nevada on June 6, 2016 as Agrinamics, Inc., and subsequently changed its name to Agrify Corporation. The Company is sometimes referred to herein by the words “we,” “us,” “our,” and similar terminology.Splits

~~The~~On October 8, 2024, the Company ~~has~~effected ~~ten~~a ~~wholly~~1-~~owned~~for-15 ~~consolidated~~reverse ~~subsidiaries,~~stock ~~which~~split ~~are~~of ~~collectively~~its ~~referred~~Common Stock. All share and per share information has been retroactively adjusted to asgive effect to the ~~“Subsidiaries”~~reverse ~~and~~stock splits for the ~~Company~~ ~~also~~year ~~has~~ended ~~ownership~~December ~~interests~~31, in2024, ~~certain~~unless ~~companies~~otherwise indicated.

OnNo ~~December~~fractional shares ~~12,~~of ~~2024,~~Common Stock were issued as a result of this reverse stock split. Any fractional shares in connection with this reverse stock splits were rounded up to the nearest whole share and no stockholders received cash in lieu of fractional shares. The reverse stock split had no impact on the number of shares of Common Stock that the Company ~~acquired~~is ~~certain~~authorized ~~assets~~to ~~from~~issue ~~Double~~pursuant to its articles of incorporation or ~~Nothing,~~on ~~LLC~~the ~~(“Double~~par value per share of the Common Stock. Proportional adjustments were made to the number of shares of Common Stock issuable upon exercise or ~~Nothing”),~~conversion of the ~~owner~~Company’s outstanding stock options and ~~creator~~warrants, the exercise price or conversion price (as applicable) of the ~~Señorita~~Company’s ~~brand~~outstanding ofstock ~~hemp-derived~~options ~~drinks~~and aswarrants, ~~part~~and the number of shares reserved for issuance under the Company’s equity ~~strategic~~incentive plan. toAll ~~reposition~~share ~~itself~~and asper ashare ~~distributor~~information ofincluded ~~hemp~~in this Annual Report on Form 10-~~derived~~K ~~beverages~~has ~~(and~~been ~~similar~~retroactively ~~products)~~adjusted to reflect the impact of this reverse stock split.

~~On December~~Note ~~31,~~2 ~~2024,~~— ~~the~~Significant ~~Company~~Accounting entered into an Asset Purchase Agreement (the “Purchase Agreement”) with CP Acquisitions, LLC (“CP”), an entity affiliated with Raymond Chang, the Company’s former Chairman and Chief Executive Officer. Under the Purchase Agreement, CP acquired assets from the Company relating to the Company’s Vertical Farming Units (“VFUs”), including the related Agrify total-turnkey (“TTK”) solution assets and Agrify InsightsTM software solutions (collectively the “Cultivation Business”). The sale of the Cultivation Business occurred following signing on December 31, 2024. The results of the Cultivation Business is presented as discontinued operations in the Consolidated Statements of Operations and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of the Cultivation Business to discontinued operations in the Consolidated Balance Sheet as of December 31, 2023. For further discussion on the discontinued operations, refer to Note 6.Policies

~~Reverse Stock~~Basis ~~Splits~~of Presentation and Principles of Consolidation

~~On July~~The 5,accompanying ~~2023,~~consolidated financial statements have been prepared on the ~~Company~~accrual ~~effected~~basis aof ~~1-for-20~~accounting ~~reverse~~in ~~stock~~accordance ~~split~~with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of RYTHM and its ~~Common~~wholly-owned ~~Stock.~~subsidiaries, ~~All~~as ~~share~~described ~~and~~above, ~~per~~in ~~share~~accordance ~~information~~with ~~has~~the ~~been~~provisions ~~retroactively~~required by ~~adjusted~~the toFinancial ~~give~~Accounting ~~effect~~Standards toBoard (“FASB”) Accounting Standards Codification (“ASC”) the Consolidation Topic ~~reverse~~810 (“ASC ~~stock~~810”). ~~split~~The ~~for~~Company ~~all~~includes ~~periods~~results ~~presented~~of ~~unless~~operations ~~otherwise~~of acquired companies ~~indicated~~from the date of acquisition. All significant intercompany transactions and balances are eliminated.

~~On October~~Use ~~8, 2024, the Company effected a 1-for-15 reverse stock split~~ of ~~its Common Stock. All share and per share information has been retroactively adjusted to give effect to the reverse stock splits for all periods presented unless otherwise indicated.~~Estimates

~~No fractional~~The ~~shares~~preparation of ~~Common~~the Company’s ~~Stock~~consolidated ~~were~~financial ~~issued~~statements ~~as a result of these reverse stock splits. Any fractional shares~~ in ~~connection~~conformity with ~~these reverse~~GAAP ~~stock~~requires ~~splits~~management ~~were rounded up~~ to ~~the~~make ~~nearest~~estimates ~~whole share~~ and noassumptions ~~stockholders~~that affect ~~received~~the ~~cash~~reported inamounts ~~lieu~~ of ~~fractional~~assets ~~shares.~~and ~~The~~liabilities, ~~reverse stock splits had no impact on~~ the ~~number~~disclosure of ~~shares~~contingent ofassets ~~Common~~and ~~Stock~~liabilities ~~that~~at the ~~Company~~date isof ~~authorized~~the consolidated tofinancial ~~issue~~statements, ~~pursuant~~and tothe ~~its~~reported ~~articles~~amounts of ~~incorporation~~ orexpenses onduring the ~~par~~reporting ~~value~~period. ~~per~~On ~~share~~an ofongoing basis, the Company ~~Common~~evaluates ~~Stock.~~estimates, ~~Proportional~~which ~~adjustments~~include ~~were~~estimates ~~made~~related to ~~the~~accruals, ~~number~~stock-based ofcompensation ~~shares~~expense, ofreported ~~Common~~amounts of ~~Stock~~revenues ~~issuable~~during ~~upon~~the ~~exercise~~reported orperiod, ~~conversion~~fair value of ~~the~~warrant ~~Company’s~~liabilities, ~~outstanding~~sales ~~stock~~tax ~~options and warrants~~liabilities, ~~the~~valuation ~~exercise~~of ~~price~~deferred ortax ~~conversion~~assets, net ~~price~~realizable ~~(as~~value ~~applicable)~~ of ~~the~~inventory ~~Company’s~~and ~~outstanding~~collectability ~~stock~~of ~~options~~trade ~~and warrants~~accounts, ~~and~~intangible ~~the~~assets, ~~number~~other ofassets ~~shares~~(Prepaid ~~reserved~~License ~~for~~Rights), goodwill, ~~issuance~~and ~~under the~~litigation. The Company’s ~~equity~~bases ~~incentive~~their ~~plan.~~estimates ~~All~~on ~~share~~historical experience and ~~per~~other ~~share~~market-specific ~~information~~or ~~included~~other inrelevant assumptions ~~this~~that ~~Annual~~they ~~Report~~believe onto ~~Form~~be ~~10-K~~reasonable ~~has~~under ~~been~~the ~~retroactively adjusted~~circumstances. toActual ~~reflect~~results ~~the~~may ~~impact~~differ ofmaterially ~~these~~from ~~reverse~~those ~~stock~~estimates ~~splits~~or assumptions.

~~F-9~~The Company regularly evaluates its assets, including asset groups or reporting units, for impairment in accordance with GAAP. The Company is aware of the impact that prolonged net losses can have on the fair value of underlying assets and the overall company. The Company is committed to ensuring that the carrying amounts of its assets are appropriately assessed and adjusted for any impairment, reflecting a true and fair view of its financial position.

~~AGRIFY CORPORATION~~F-10

~~NOTES~~Discontinued ~~TO CONSOLIDATED FINANCIAL STATEMENTS~~Operations

~~Nasdaq~~On December 31, ~~Deficiency~~2024, ~~Notice~~the Company entered into and closed a Purchase Agreement with CP. Under the Purchase Agreement, CP acquired assets from the Company relating to the Cultivation Business. On March 30, 2025, the Company discontinued the Extraction Business (together with the Cultivation Business, the “Discontinued Operations”).

~~On January~~As ~~19, 2023,~~ the ~~Company~~sale ~~received a deficiency letter from the Listing Qualifications Department~~of (the ~~“Staff”)~~Cultivation ofBusiness ~~The~~and ~~Nasdaq Stock Market, LLC (“Nasdaq”) notifying~~ the ~~Company~~exit ~~that,~~of ~~for~~ the ~~previous 30~~Extraction ~~consecutive~~Business ~~business~~represented ~~days,~~a ~~the~~strategic ~~bid~~shift ~~price~~that ~~for~~will ~~its~~have ~~Common Stock had closed below $1.00 per share, which is the minimum closing price required to maintain~~ a ~~continued~~major ~~listing~~effect on ~~The Nasdaq Capital Market under~~ the ~~Minimum~~Company’s operations ~~Bid~~and ~~Requirement.~~financial ~~In accordance with Nasdaq Listing Rule 5810(c)(3)(A)~~results, ~~the~~they ~~Company~~have ~~had~~been ~~180~~presented ~~calendar~~in ~~days~~discontinued tooperations ~~regain~~in ~~compliance~~accordance with ~~the~~ASC ~~Minimum Bid Requirement. To regain compliance with the Minimum Bid Requirement~~205, ~~the~~Presentation ~~closing bid price~~ of ~~the Company’s Common Stock must~~Financial beStatements, atseparate ~~least~~from ~~$1.00~~continuing ~~per~~operations ~~share~~ for athe ~~minimum~~years ofended 10December ~~consecutive~~31, ~~trading~~2025 ~~days~~and ~~during this 180-day compliance period~~2024, ~~unless~~as ~~the~~applicable. ~~Staff~~For ~~exercises~~further discussion, ~~its~~refer ~~discretion~~ to ~~extend~~Note ~~the~~17 ~~minimum~~included ~~trading~~elsewhere ~~day~~in ~~period~~the ~~pursuant~~notes to ~~Nasdaq Listing Rule 5810(c)(3)(G). On July 19, 2023,~~ the ~~Company received~~consolidated afinancial ~~notice from Nasdaq confirming its compliance with the minimum bid price rule~~statements.

AsCash disclosed in the Current Report on Form 8-K filed on April 17, 2023, the audit committee (the “Audit Committee”) of the Company’s Board of Directors (the “Board”) concluded that, as a result of inadvertent errors in the accounting for warrants previously issued by the Company, it was appropriate to restate the Company’s previously issued unaudited consolidated interim financial statements as of and ~~for~~Cash the quarterly periods ended March 31, 2022, June 30, 2022 and September 30, 2022 included in the Company’s Quarterly Reports on Form 10-Q for such periods in amended quarterly reports for the affected periods. As a result of such restatements, the Company was unable to timely file the 2022 Form 10-K, the First Quarter 2023 Form 10-Q and the Second Quarter 2023 Form 10-Q without unreasonable effort or expense.Equivalents

~~On April~~Cash ~~18,~~and ~~2023,~~cash equivalents ~~the~~consist ~~Company~~principally ~~received~~of acash ~~notice~~and ~~from~~deposits ~~Nasdaq~~with ~~(the~~original ~~“April~~maturities ~~Nasdaq~~of ~~Notice”)~~three ~~that~~months itor ~~was~~less ~~noncompliant with Nasdaq Listing Rule 5250(c)(1)~~ as ~~a result~~ of ~~its~~December ~~failure~~31, to2025 ~~file~~and ~~its~~December 31, ~~Annual~~2024. ~~Report~~All oncash ~~Form~~equivalents ~~10-K~~are ~~(the~~carried ~~“Form~~at ~~10-K”)~~cost, ~~with~~which ~~the~~approximates ~~SEC by~~fair ~~the required due date~~value.

~~On May~~Accounts 17Receivable, 2023, the Company received a second notice from Nasdaq (the “May Nasdaq Notice”) that it remained noncompliant with Nasdaq Listing Rule 5250(c)(1) as a result of its failure to file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the “First Quarter Form 10-Q”) with the SEC by the required due date. Net

~~On August~~Accounts 16receivable, ~~2023~~net, ~~the~~primarily ~~Company~~consists ~~received~~of aamounts ~~third~~for ~~notice~~goods ~~from~~and services ~~Nasdaq~~ that itare ~~remain~~billed ~~noncompliant~~and currently due from customers. In accordance with ~~Nasdaq~~the ~~Listing~~current ~~Rule~~expect ~~5250~~credited loss (c“CECL”) impairment model under ASU 2016-13, Financial Instruments - Credit Losses (1Topic 326), asaccounts areceivable balances are presented net of an ~~result~~allowance for credit losses, which are an estimate of ~~its~~billed ~~failure~~or toborrowed ~~file~~amounts ~~its~~that ~~Quarterly~~may ~~Report~~not onbe ~~Form~~collectible. ~~10-Q~~In ~~for~~determining the ~~fiscal~~amount of ~~quarter~~the ~~ended~~allowance ~~June~~at 30each reporting date, ~~2023~~management ~~(the~~makes ~~“Second~~judgments ~~Quarter Form~~about 10general economic conditions, historical write-~~Q”)~~off ~~with~~experience, and any specific risks identified in customer or borrower collection matters, including the ~~SEC~~aging byof unpaid accounts receivable and changes in customer or borrower financial conditions. Accounts receivable balances are written off after all means of collection are exhausted and the ~~required~~potential ~~filing~~for ~~date~~non-recovery (is determined to be probable. Adjustments to the ~~“August~~allowance ~~Nasdaq~~for ~~Notice”~~credit losses are recorded as general and, ~~together~~administrative ~~with~~expenses in the ~~April~~consolidated ~~Nasdaq Notice~~statements ~~and~~of operations. For the ~~May~~year ~~Nasdaq~~ended ~~Notice~~December 31, 2025, the ~~“Nasdaq~~Company ~~Notices”)~~recorded approximately $382 thousand in allowance for doubtful accounts. There was no comparable allowance in the prior year.

~~The Nasdaq~~Concentration ~~granted~~of ~~the~~Credit ~~Company~~Risk ~~an exception until October 16, 2023, to file its 2022 Form 10-K~~ and ~~First~~Significant ~~and Second Quarter 2023 Forms 10-Q. The Nasdaq Notice had no immediate effect on the listing of the Company’s Common Stock on The Nasdaq Stock Market LLC.~~Customer

OnFinancial instruments ~~October~~that ~~17,~~potentially ~~2023,~~subject the Company ~~received~~to a ~~Staff~~concentration ~~Delisting~~of ~~Determination~~credit ~~(the~~risk ~~“Staff~~primarily ~~Determination”)~~consist ~~from~~of ~~the~~cash, ~~Listing~~cash ~~Qualifications Department~~equivalents, ofmarketable ~~Nasdaq~~securities, and ~~notifying~~accounts ~~the~~receivable. ~~Company~~Cash ~~that~~equivalents itprimarily ~~was~~consist ~~not~~of inmoney ~~compliance~~market funds with ~~Nasdaq’s~~original ~~continued~~maturities ~~listing~~of ~~requirements~~three ~~under~~months ~~the~~or less, which ~~Listing~~are ~~Rule~~invested asprimarily awith ~~result~~U.S. offinancial ~~its~~institutions. ~~failure~~Cash todeposits ~~file~~with ~~the~~financial ~~First~~institutions ~~Quarter~~generally ~~Form~~exceed ~~10-Q,~~federally ~~the~~insured limits. ~~Second~~Management ~~Quarter~~believes ~~Form~~minimal ~~10-Q~~credit ~~and~~risk ~~the~~exists ~~Form~~with ~~10-K~~respect ~~for~~to ~~2023 (collectively,~~these financial institutions and the ~~“Delinquent~~Company ~~Reports”)~~has innot aexperienced any ~~timely~~losses ~~manner~~on such amounts.

~~On November~~For ~~16, 2023,~~ the ~~Company~~year ~~received~~ended aDecember ~~notice~~31, ~~from~~2025, ~~Nasdaq~~a ~~that~~related ~~the~~party ~~Company~~customer ~~remains noncompliant with the Listing Rule as~~ and a ~~result of~~third-party ~~its~~customer ~~failure~~accounted tofor ~~file~~approximately ~~its~~45% ~~Quarterly~~and ~~Report~~12% onof ~~Form 10-Q for~~ the ~~fiscal~~Company’s ~~quarter ended September 30~~revenue, ~~2023~~respectively. ~~with~~For the ~~SEC~~year byended ~~the required~~December ~~filing~~31, ~~date (the “November Nasdaq Notice” and~~2025, ~~together~~a ~~with~~related ~~the~~party ~~April~~accounted ~~Nasdaq~~for ~~Notice,~~75% ~~the~~of ~~May Nasdaq Notice, and~~ the ~~August Nasdaq~~Company’s ~~Notice,~~total ~~the~~accounts ~~“Nasdaq Notices”)~~receivable.

~~On December~~For ~~1, 2023,~~ the ~~Company~~year ~~received a notice from Nasdaq stating that because the Company reported stockholders’ equity of $(17.17) million in its Form 10-Q for the quarter~~ ended ~~March~~December 3031, ~~2023~~2024, ~~the~~one ~~Company~~customer ~~was~~accounted nofor ~~longer in compliance with Nasdaq Listing Rule 5550(b)(1)~~100% ~~(the “Primary Equity Listing Rule”), which requires that listed companies maintain a minimum~~ of ~~$2.5~~revenue ~~million~~and inaccounts ~~stockholders’ equity~~receivable. In response, the Company timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”), which stayed any further action by the Listing Qualifications Staff. The hearing was held on January 11, 2024. The Company arrived at the hearing having previously cured any additional grounds for delisting as a result of delinquent periodic filings during 2023 that were filed prior to the hearing.

On January 30, 2024, the Company received formal notice that the Panel had granted the Company’s request for an exception through April 15, 2024 to evidence compliance with the Listing Rule. The compliance date of April 15, 2024 represents the full extent of the Panel’s discretion to grant continued listing while the Company is non-compliant with Nasdaq Listing Rules. Accordingly, there can be no assurance that the Company will be able to regain compliance with the Nasdaq listing rules or maintain its listing on the Nasdaq Capital Market. If the Company’s Common Stock is delisted, it could be more difficult to buy or sell the Company’s Common Stock or to obtain accurate quotations, and the price of the Company’s Common Stock could suffer a material decline. Delisting could also impair the Company’s ability to raise capital.Inventories

FThe Company values all its inventories, which consist primarily of finished goods and raw materials, at the lower of cost or net realizable value, with cost principally determined by the weighted-10average cost method on a first-in, first-out basis. Write-offs of potentially slow-moving, damaged, or expiring inventory are recorded through specific identification of expired or damaged material. The Company takes a physical inventory count at least annually at all significant inventory locations.

~~AGRIFY~~Property ~~CORPORATION~~and Equipment

~~NOTES~~Property TOand ~~CONSOLIDATED~~equipment are ~~FINANCIAL~~stated ~~STATEMENTS~~at cost less accumulated depreciation and amortization. Depreciation and amortization expenses are recognized using the straight-line method over the estimated useful life of each asset. The estimated useful lives of the Company’s property and equipment are periodically assessed to determine if changes are appropriate. The Company charges maintenance and repairs to expense as incurred. When the Company retires or disposes of assets, the carrying cost of these assets and related accumulated depreciation or amortization are eliminated from the consolidated balance sheets and any resulting gain or loss is included in the consolidated statements of operations in the period of retirement or disposal.

On March 5, 2024, the Company received a deficiency letter from the Staff notifying the Company that, for the last 30 consecutive business days, the bid price for the Company’s Common Stock had closed below $1.00 per share, which is the minimum closing price required to maintain continued listing on the Nasdaq Stock Market under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Requirement”). The Notice had no immediate effect on the listing of the Company’s Common Stock on Nasdaq. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has 180 calendar days to regain compliance with the Minimum Bid Requirement. The compliance period for the Company expired on September 3, 2024. On September 4, 2024, the Staff notified the company in writing that it was eligible for an additional 180F-day compliance period, or until March 3, 2025, to regain compliance with the Minimum Bid Requirement. On October 8, 2024, the Company completed a 1-for-15 reverse stock split of our Common Stock, in which each fifteen shares of Common Stock issued and outstanding was combined and converted into one share of Common Stock to regain compliance with the Minimum Bid Requirement. On October 22, 2024, the Staff notified the Company that it had regained compliance with the Minimum Bid Requirement.11

~~Basis of Presentation and Principles of Consolidation~~Goodwill

~~Accounting~~Goodwill is defined as the excess of cost over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is tested for impairment ~~Wholly-Owned~~annually, ~~Subsidiaries~~and more frequently if events and circumstances indicate that the asset might be impaired. A goodwill impairment charge is recorded if the amount by which the Company’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Factors that could lead to a future impairment include material uncertainties such as a significant reduction in projected revenues, a deterioration of projected financial performance, future acquisitions and/or mergers, and/or a decline in the Company’s market value as a result of a significant sustained decline in the Company’s stock price.

~~The accompanying~~Goodwill ~~consolidated~~is ~~financial statements have been prepared in accordance with accounting principles generally accepted in the~~not ~~United~~subject ~~States~~to ~~(“GAAP”)~~amortization and ~~include~~is ~~the~~tested ~~accounts~~annually offor ~~Agrify~~impairment, ~~Corporation~~or ~~and~~more ~~its~~frequently ~~wholly-owned~~if ~~subsidiaries,~~events asor ~~described~~changes ~~above,~~ in ~~accordance~~circumstances ~~with~~indicate ~~the provisions required by the Consolidation Topic 810 (“ASC 810”) of the Financial Accounting Standards~~there ~~Board~~might ~~(“FASB”)~~be ~~Accounting~~an ~~Standards Codification (“ASC”)~~impairment. ~~The~~An ~~Company~~impaired ~~includes~~asset ~~results~~is ofwritten ~~operations~~down ofto ~~acquired companies~~its ~~from~~estimated ~~the~~fair ~~date~~value ofbased ~~acquisition.~~upon ~~All~~the ~~significant~~most ~~intercompany~~recent ~~transactions and balances are eliminated~~information.

~~Accounting~~During the years ended December 31, 2025 and 2024, the Company performed a qualitative analysis for ~~Less~~its ~~Than~~goodwill ~~Wholly~~impairment test. The Company applies the guidance in ASU 2011-~~Owned~~08 ~~Subsidiaries~~Intangibles-Goodwill and Other-Testing Goodwill for Impairment, which provides entities with an option to perform a qualitative assessment (commonly referred to as “Step Zero”) to determine whether further quantitative analysis for impairment of goodwill is necessary. A goodwill impairment charge is recorded if the amount by which our carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Factors that could lead to a future impairment include material uncertainties such as a significant reduction in projected revenues, a deterioration of projected financial performance, future acquisitions and/or mergers, and a decline in our market value as a result of a significant sustained decline in our stock price. As a result of the Company’s Step Zero analysis, no further quantitative impairment test was deemed necessary.

~~For the~~Impairment ~~Company’s~~of ~~less than wholly~~Long-~~owned~~Lived ~~subsidiary,~~Assets Agrify Brands, LLC (“Agrify Brands”), the Company first analyzes whether this entity is a variable interest entity (a “VIE”) in accordance with ASC 810, and if so, whether the Company is the primary beneficiary requiring consolidation. The Company continuously re-assesses (i) whether the joint-venture is a VIE, and (ii) if the Company is the primary beneficiary of the VIE. If it is determined that Agrify Brands qualifies as a VIE and the Company is the primary beneficiary, the Company’s financial interest in the VIE is consolidated.

~~Based~~Long-lived assets are evaluated onfor impairment whenever ~~the~~events ~~Company’s~~or ~~analysis~~changes ofin ~~this~~circumstances ~~entity,~~indicate the ~~Company~~carrying ~~has~~value ~~determined~~may ~~that~~not ~~Agrify~~be ~~Brands~~recoverable. isExamples include a ~~VIE,~~significant ~~and~~adverse ~~that~~change ~~the~~in ~~Company is~~ the ~~primary beneficiary.~~extent ~~While~~or ~~the~~manner ~~Company~~in ~~owns~~which ~~75%~~we ofuse ~~Agrify~~the ~~Brand’s equity interests~~asset, ~~the~~or ~~remaining~~an ~~equity~~unexpected ~~interests~~change in ~~Agrify~~financial ~~Brands~~performance. ~~are~~When evaluating ~~owned~~long-lived byassets ~~unrelated~~for ~~third parties~~impairment, we ~~and~~compare the ~~agreement~~carrying ~~with~~value ~~these~~of ~~third~~the ~~parties~~asset ~~provides~~to the ~~Company~~asset’s ~~with~~estimated ~~greater~~undiscounted ~~voting power as the majority~~future ~~owner~~cash flows. ~~Accordingly,~~An impairment is ~~the~~indicated ~~Company~~if ~~consolidates its interest in~~ the ~~financial~~estimated ~~statements~~future ofcash ~~Agrify~~flows ~~Brands~~are ~~under~~less ~~the~~than ~~VIE rules and reflects~~ the ~~third~~carrying ~~parties’~~value ~~interests~~of in the ~~condensed consolidated financial statements as a non-controlling interest~~asset. The ~~Company records~~ impairment is ~~this~~the ~~non-controlling~~excess ~~interest~~of atthe ~~its~~carrying ~~initial fair~~ value, ~~adjusting~~over the ~~basis~~fair ~~prospectively~~value ~~for~~of the ~~third~~asset. ~~parties’~~We ~~share~~recorded impairment charges related ofto ~~the~~intangible ~~respective~~assets and ~~consolidated~~other ~~investments’~~assets ~~net~~(Prepaid ~~income~~License orRights) ~~loss~~of or$7.9 ~~equity~~million ~~contributions~~ and ~~distributions~~$0.6 ~~These~~million, ~~non-controlling~~respectively, ~~interests are~~for ~~not~~the ~~redeemable~~year byended ~~the~~December ~~equity~~31, 2025 ~~holders~~due ~~and~~to ~~are~~changes ~~presented~~in aslegislation ~~part~~around ofhemp-derived ~~permanent~~products ~~equity.~~in ~~Income~~November ~~and~~2025, ~~losses~~which ~~are~~is ~~allocated~~expected to ~~the~~become ~~non-controlling~~effective in November 2026. ~~interest~~There ~~holders~~was ~~based~~no oncomparable ~~its~~impairment ~~economic~~in ~~ownership~~the ~~percentage~~prior year.

~~Use of~~Warrant ~~Estimates~~Liabilities

The ~~preparation~~ ~~of the~~ Company’s ~~consolidated~~evaluates all its financial ~~statements~~instruments, inincluding ~~conformity~~issued ~~with~~private ~~GAAP~~placement ~~requires~~stock ~~management~~purchase warrants, to ~~make~~determine ~~estimates~~if ~~and assumptions~~such ~~that~~instruments ~~affect~~are ~~the~~derivatives or ~~reported~~contain ~~amounts~~features ofthat ~~assets~~qualify ~~and~~as ~~liabilities~~embedded derivatives, ~~the~~pursuant ~~disclosure~~to ofASC ~~contingent~~Topic ~~assets~~480, ~~and~~Distinguishing ~~liabilities~~Liabilities atfrom ~~the~~Equity ~~date~~(“ASC of480”) ~~the~~and ~~consolidated~~ASC ~~financial~~Topic ~~statements~~815, Derivatives and ~~the~~Hedging ~~reported~~(“ASC ~~amounts~~815”). ofThe ~~expenses~~Company ~~during~~accounts ~~the~~for ~~reporting~~warrants ~~period.~~as Oneither ~~an ongoing basis, the~~equity-classified ~~Company~~or ~~evaluates~~liability-classified ~~estimates,~~instruments ~~which~~based ~~include~~on ~~estimates~~an ~~related~~assessment toof ~~accruals,~~the ~~stock-based~~warrant’s ~~compensation~~specific ~~expense,~~terms ~~reported~~and ~~amounts~~applicable ofauthoritative ~~revenues~~guidance ~~during~~in ~~the~~ASC ~~reported~~480 ~~period,~~and ~~fair~~ASC ~~value~~815. ofManagement’s ~~warrant~~assessment ~~liabilities,~~considers ~~sales~~whether ~~tax~~the ~~liabilities,~~warrants ~~valuation~~are offreestanding ~~deferred~~financial ~~tax~~instruments ~~assets,~~pursuant ~~net realizable~~to ~~value~~ASC of480, ~~inventory~~whether ~~and~~they ~~collectability~~meet the definition of ~~trade~~a ~~accounts,~~liability ~~intangible~~pursuant ~~assets,~~to ~~goodwill~~ASC 480, and ~~litigation.~~whether ~~The~~the ~~Company~~warrants ~~bases~~meet ~~their~~all ~~estimates on~~of ~~historical~~the ~~experience~~requirements ~~and~~for equity ~~other~~classification ~~market-specific~~under orASC ~~other~~815, ~~relevant~~including ~~assumptions~~whether ~~that~~the ~~they~~warrants ~~believe~~are indexed to ~~be reasonable under~~ the ~~circumstances. Actual~~Company’s ~~results~~own ~~may~~Common ~~differ~~Stock ~~materially~~among ~~from~~other ~~those~~conditions for ~~estimates~~equity ~~or assumptions~~classification.

~~The~~For issued or ~~Company~~modified ~~regularly~~warrants ~~evaluates~~that ~~its~~meet ~~assets,~~all ~~including~~of ~~asset~~the ~~groups~~criteria orfor ~~reporting~~equity ~~units~~classification, ~~for~~they ~~impairment~~are inrecorded ~~accordance~~as ~~with~~a ~~GAAP.~~component ~~The~~of ~~Company~~additional paid-in capital isat ~~aware~~the time of ~~the~~issuance. ~~impact~~For issued or modified warrants that ~~prolonged~~are ~~net~~precluded ~~losses~~from ~~can~~equity ~~have~~classification, onthey ~~the~~are recorded as a liability at their initial fair value ofon ~~underlying~~the ~~assets~~date of issuance and ~~the~~subject ~~overall~~to ~~company.~~remeasurement ~~The~~on ~~Company is~~each ~~committed~~balance tosheet ~~ensuring~~date ~~that~~with changes in the ~~carrying~~estimated fair ~~amounts~~value of ~~its~~the ~~assets~~warrants ~~are~~to ~~appropriately~~be ~~assessed~~recognized ~~and~~as ~~adjusted~~an ~~for~~unrealized ~~any~~gain ~~impairment,~~or ~~reflecting a~~loss ~~true~~in ~~and~~the ~~fair~~consolidated ~~view~~statements of ~~its financial position~~operations.

~~Reclassifications~~F-12

~~The~~Convertible ~~Company~~Notes effected a 1-for-20 reverse stock split of its Common Stock on July 5, 2023 and a 1-for-15 reverse stock split of its Common Stock on October 8, 2024. All share and per share information has been retroactively adjusted to give effect to the reverse stock split for all periods presented unless otherwise indicated. The shares of Common Stock retained a par value of $0.001 per share. Accordingly, the Stockholders’ equity (deficit) section of the consolidated balance sheets reflects the reverse stock split by reclassifying from “Common Stock” to “Additional paid-in capital” an amount equal to the par value of the decreased shares resulting from the reverse stock split.Payable

~~Certain~~The Company evaluates ~~amounts~~its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in ~~the~~accordance ~~consolidated~~with ASC 815. The accounting treatment of derivative financial ~~statements~~instruments requires that the Company identify and record certain embedded conversion options (“ECOs”), certain variable-share settlement features, and any related tofreestanding instruments at their fair values as of the ~~prior~~inception ~~years~~date ~~have~~of ~~been~~the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as an unrealized non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. Bifurcated embedded conversion options, variable-share settlement features, and any related freestanding instruments are recorded as a discount to ~~conform~~the host instrument which is amortized to interest expense over the ~~current~~life ~~year’s~~of the respective note using the ~~presentation~~effective interest method.

~~F-11~~Leases

~~AGRIFY~~The ~~CORPORATION~~Company determines at the inception of an asset contract if such arrangement is or contains a lease. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company classifies leases at the lease commencement date as operating or finance leases and records a right-of-use asset and a lease liability on its consolidated balance sheet for all leases with an initial lease term of greater than 12 months. A lease with an initial term of 12 months or less is not recorded on the balance sheet, but related payments are recognized as an expense on a straight-line basis over the lease term.

~~NOTES~~The TOCompany’s asset ~~CONSOLIDATED~~contracts ~~FINANCIAL~~may ~~STATEMENTS~~contain both lease and non-lease components. Non-lease components may include maintenance, utilities, and other operating costs. The Company combines the lease and non-lease components of fixed costs in its lease arrangements as a single lease component. Variable costs, such as utilities or maintenance costs, are not included in the measurement of right-of-use assets and lease liabilities, but rather are expensed when the event determining the amount of variable consideration to be paid occurs.

~~Discontinued~~Lease liabilities ~~Operations~~and their corresponding right-of-use assets are recorded based on the present value of future lease payments over the expected lease term. The Company determines the present value of future lease payments by using its estimated secured incremental borrowing rate for that lease term as the interest rate implicit in the lease is not readily determinable. The Company estimates its secured incremental borrowing rate for each lease based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term.

OnCertain of the ~~December~~Company’s ~~31,~~leases ~~2024,~~include options to extend or terminate the ~~Company~~lease. ~~entered~~The ~~into~~amounts determined for the Company’s right-of-use assets and ~~closed~~lease aliabilities ~~Purchase~~generally ~~Agreement~~do ~~with~~not ~~CP.~~assume ~~Under~~that ~~the~~renewal ~~Purchase~~options ~~Agreement~~or early-termination provisions, CPif ~~acquired~~any, ~~assets~~are exercised unless it is ~~from~~reasonably certain that the Company ~~relating~~will toexercise ~~the~~such ~~Cultivation~~options. ~~Business~~The Company did not have any leases as part of continuing operations as of years ended December 31, 2025 and 2024.

AsContract the sale of the Cultivation Business represented a strategic shift that will have a major effect on the Company’s operations and financial results, they have been presented in discontinued operations in accordance with ASC 205, Presentation of Financial Statements, separate from continuing operations for the years ended December 31, 2024 and 2023, as applicable. For further discussion, refer to Note 6.Liabilities

~~Cash~~Contract Liabilities includes amounts collected, billed in excess of revenue or customer deposits that the Company can recognize. The Company recognizes contract liabilities and ~~Cash~~non-current ~~Equivalents~~contract liabilities as revenue as the related performance obligation is satisfied. The Company records contract liabilities that will be recognized during the succeeding twelve-month period as a current liability on the consolidated balance sheets. The Company did not have any contract liabilities in continuing operations as of years ended December 31, 2025 and December 31, 2024.

Cash and cash equivalents consist principally of cash and deposits with maturities of three months or less as of December 31, 2024 and December 31, 2023. All cash equivalents are carried at cost, which approximates fair value.F-13

~~Marketable Securities~~Fair Value of Financial Instruments

The Company’s financial ~~marketable~~instruments ~~security~~consist ~~investments~~of ~~primarily~~cash ~~include~~and ~~investments~~cash ~~held~~equivalents, inmarketable ~~mutual funds~~securities, ~~municipal~~accounts ~~bonds~~receivable, ~~and~~contingent ~~corporate~~considerations, ~~bonds.~~long-term ~~The~~debt, ~~mutual~~related ~~funds~~party ~~are~~debt, ~~recorded at fair value in the accompanying consolidated balance sheets as part of cash~~ and ~~cash~~warrant ~~equivalents~~liabilities. ~~The municipal~~Refer ~~and corporate bonds are considered~~ to beNote ~~held~~12 -~~to-maturity~~ ~~securities~~Fair ~~and~~Value ~~are~~Measures, ~~recorded~~included atelsewhere ~~amortized cost~~ in the ~~accompanying consolidated~~notes ~~balance~~to ~~sheets.~~the ~~The fair value of these investments was estimated using recently executed transactions and market price~~consolidated ~~quotations.~~financial ~~The~~statements ~~Company~~for ~~considers~~details ~~current~~of ~~assets to be those investments that will mature within~~ the ~~next~~Company’s 12financial ~~months, including interest receivable on long-term bonds~~instruments.

~~Accounts Receivable,~~Stock-Based ~~Net~~Compensation

~~Accounts receivable,~~The ~~net,~~Company ~~primarily~~measures restricted ~~consists~~stock ofunits ~~amounts~~and ~~for~~stock ~~goods~~options ~~and~~awards ~~services~~granted ~~that~~to ~~are~~employees, ~~billed~~directors and ~~currently~~consultants ~~due~~based ~~from~~on ~~customers. In accordance with~~ the ~~current~~fair ~~expect~~value ~~credited~~on ~~loss~~the ~~(“CECL”)~~date ~~impairment model under ASU 2016-13, Financial Instruments - Credit Losses (Topic~~of ~~326),~~the ~~accounts~~grant ~~receivable~~and ~~balances~~recognizes ~~are~~compensation ~~presented~~expense ~~net~~ of anthose ~~allowance~~awards ~~for~~over ~~credit~~the ~~losses~~requisite service period, which ~~are~~is angenerally ~~estimate of billed or borrowed amounts that may not be collectible. In determining~~ the ~~amount~~vesting period of the ~~allowance~~respective ataward. ~~each~~Forfeitures ~~reporting~~are ~~date,~~recognized ~~management~~as ~~makes~~incurred. ~~judgments about general economic conditions~~Historically, ~~historical~~the ~~write-off~~Company ~~experience,~~has ~~and~~issued ~~any~~stock ~~specific~~options ~~risks~~to ~~identified in customer or borrower collection matters~~employees, ~~including~~directors ~~the aging of unpaid accounts receivable~~ and ~~changes~~consultants inwith ~~customer~~only orservice-based ~~borrower~~vesting ~~financial~~ conditions. ~~Accounts receivable balances are written off after all means of collection are exhausted~~ and records the ~~potential~~expense for ~~non-recovery~~these isawards ~~determined~~using ~~to be probable. Adjustments to~~ the ~~allowance for~~straight-line ~~credit losses are recorded as general and administrative expenses in the consolidated statements of operations~~method.

~~Concentration~~The Company classifies stock-based compensation expense in its consolidated statements of ~~Credit~~operations ~~Risk~~in ~~and~~the ~~Significant~~same ~~Customer~~manner in which the award recipient’s payroll costs are classified.

~~Financial~~The Company estimates ~~instruments~~the ~~that~~fair ~~potentially~~value ~~subject~~of ~~the~~each ~~Company~~stock tooption agrant ~~concentration~~on the date of ~~credit~~the ~~risk~~grant ~~primarily~~using ~~consist~~the ofBlack-Scholes ~~cash,~~option-pricing ~~cash~~model. ~~equivalents,~~The ~~marketable securities,~~expected ~~and~~term ~~accounts~~of the ~~receivable.~~Company’s ~~Cash~~stock ~~equivalents~~options ~~primarily~~has ~~consist~~been ofdetermined ~~money~~utilizing ~~market~~the ~~funds~~“simplified” ~~with~~method ~~original~~for ~~maturities~~awards ofthat ~~three~~qualify ~~months~~as “plain-vanilla” oroptions. ~~less,~~The ~~which~~risk-free ~~are~~interest ~~invested~~rate ~~primarily~~is ~~with~~determined by reference to the U.S. ~~financial~~Treasury ~~institutions.~~yield ~~Cash~~curve ~~deposits~~in ~~with~~effect ~~financial~~at ~~institutions~~the ~~generally~~time ~~exceed~~of ~~federally~~grant of the ~~insured~~award ~~limits.~~for ~~Management~~time ~~believes~~periods ~~minimal~~approximately ~~credit~~equal ~~risk~~to ~~exists~~the ~~with~~expected ~~respect~~term toof ~~these~~the ~~financial~~award. ~~institutions~~The ~~and~~expected dividend yield is based on the fact that the Company has never paid cash dividends and does not ~~experienced~~ expect to pay any ~~losses~~cash ondividends ~~such~~in ~~amounts~~the foreseeable future.

~~The tables~~Business ~~below~~Combinations ~~show customers who account for 10% or more of the Company’s total revenues~~ and ~~10%~~Asset ~~or more of the Company’s accounts receivable for the periods presented.~~Acquisitions

~~For~~The Company follows the guidance in ASC 805, Business Combinations, for determining the ~~years~~appropriate ~~ended~~accounting ~~December~~treatment 31for asset acquisitions. ASU 2017-01, Clarifying ~~2024~~the ~~and~~Definition ~~2023~~of a Business, provides an initial fair value screen to determine if substantially all of the ~~Company~~fair ~~did~~value of the assets acquired is concentrated in a single asset or group of similar assets. If the initial screening test is not ~~have~~met, ~~any~~the ~~customers~~set ~~that~~is ~~accounted~~considered a business based on whether there are inputs and substantive processes in place. ~~for~~Based ~~10%~~on orthe ~~more~~results of ~~total~~this ~~revenue~~analysis and conclusion on an acquisition’s classification of a business combination or an asset acquisition, the accounting treatment is derived.

AsIf the acquisition is deemed to be a business, the purchase method of ~~December~~accounting 31is applied. The estimated fair value of net assets acquired, including ~~2024~~the allocation of the fair value to identifiable assets and ~~2023~~liabilities, is determined using established valuation techniques. A fair value measurement is determined as the ~~Company~~price received to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. In the context of purchase accounting, the determination of fair value often involves significant judgments and estimates by management, including the selection of valuation methodologies, estimates of future revenues, costs and cash flows, discount rates, and selection of comparable companies. The estimated fair values reflected in the purchase accounting rely on management’s ~~customers~~judgment ~~that~~and ~~accounted~~the expertise of ~~for~~a ~~10%~~third-party orvaluation firm ~~more~~engaged to assist in concluding on the fair value measurements. In determining the fair value of all identifiable assets and liabilities acquired, the ~~total~~most ~~accounts~~significant ~~receivable~~estimates relate to intangible assets. For the intangible assets identified, ~~net~~depending on the type of intangible asset and the complexity of determining its fair value, the ~~were~~fair value is developed using appropriate valuation techniques, taking into account assumptions such as ~~follows:~~the expected future revenue, expected use of the asset, market conditions, uncertainty factors, the estimated useful life, and discount rate, among other factors. These assumptions may vary based on future events, perceptions of different market participants and other factors outside the control of management, and such variations may be significant to estimated values.

	2024					2023
(In thousands)	Amount		% of Total Accounts Receivable			Amount		% of Total Accounts Receivable
Company Customer Number – 15095		*		*		$	712		62.0	%
Company Customer Number – 10888	$	173		54.4	%	$	251		21.8	%
Company Customer Number – 9142	$	49		15.6	%		*		*

If the transaction is deemed to be an asset acquisition, the cost accumulation and allocation model is used whereby the assets and liabilities are recorded based on the purchase price and allocated to the individual assets and liabilities based on relative fair values. For the allocation of intangible assets identified, depending on the type of intangible asset and the complexity of determining its relative fair value, an independent valuation expert or management may allocate the relative fair value, using appropriate valuation techniques, which are generally based on a forecast of the total expected future net cash flows and takes into consideration other significant assumptions such as the expected use, market uncertainty, marketing or sales support requirements and the intangible asset useful lives.

* Customer accounts receivable, as a percentage of total accounts receivable, was less than 10%F-14

~~F-12~~Prepaid License Rights

~~AGRIFY~~If ~~CORPORATION~~a sale arrangement includes terms—such as repurchase features or other provisions—that prevent the buyer from obtaining control of the business or assets, the Company concludes that control has not transferred. In those circumstances, the arrangement is accounted for based on its substance under other applicable U.S. GAAP. In connection with such arrangements, amounts paid for licensing rights are deferred and recorded as prepaid licensing rights on the Company’s consolidated balance sheets. These amounts are recognized in expense over the period in which the related rights are utilized or otherwise as the underlying economic benefit is consumed.

~~NOTES~~Revenue ~~TO CONSOLIDATED FINANCIAL STATEMENTS~~Recognition

~~Inventories~~Overview

The Company ~~values~~generates revenue ~~all~~from ~~its~~continuing ~~inventories,~~operations ~~which~~through ~~consist~~the ~~primarily~~ sale of ~~significant~~hemp-derived ~~raw~~THC ~~material~~products ~~hardware~~(non-licensing) ~~components,~~and atLicensing ~~the~~Revenue. ~~lower of cost or~~The ~~net~~Company ~~realizable~~licenses ~~value,~~intellectual ~~with~~property ~~cost~~to ~~principally~~a ~~determined~~related byparty ~~the~~under ~~weighted-average~~arrangements ~~cost~~that ~~method~~provide onfor ~~a first~~sales-~~in,~~based ~~first-out~~license ~~basis~~fees. ~~Write-offs~~The ofCompany ~~potentially~~recognizes licensing income ~~slow-moving~~derived orfrom ~~damaged~~licensing ~~inventory~~agreements in ~~are~~accordance ~~recorded~~with ASC ~~through~~Topic 606, Revenue ~~specific~~Recognition (“ASC ~~identification~~606”),

Filing Compare · RYTHM, Inc.