RYTHM, Inc. 8-K

What Happened

• RYTHM, Inc. (through subsidiaries VCP IP Holdings, LLC and MC Brands LLC) announced amendments, executed March 31, 2026 and effective April 1, 2026, to two trademark and recipe license agreements with GTI Core, LLC (an indirect Green Thumb Industries subsidiary). The agreements change GTI Core’s payment from sales‑based monthly royalties to fixed annual cash fees: $64.0 million for the RYTHM and related brands agreement and $6.0 million for the incredibles brand agreement.

Key Details

• Parties: VCP IP Holdings, LLC and MC Brands LLC (RYTHM subsidiaries) amended license agreements with GTI Core, LLC.
• Effective date / execution: Amendments executed March 31, 2026; commence April 1, 2026.
• Payments: Annual cash fees of $64.0M (August 2025 agreement) and $6.0M (May 2025 agreement), payable monthly. Combined annual cash consideration = $70.0M.
• Escalator: Annual increases on Jan 1 each year based on published CPI, capped at 10% year‑over‑year.
• Regulatory context / related party: Amendments were made following discussions with Nasdaq staff to address listing standards related to revenue from the federally illegal cannabis industry. Green Thumb Industries is an indirect ~33% owner of RYTHM, and Benjamin Kovler (Chairman & CEO of Green Thumb) serves as RYTHM’s Chairman and Interim CEO.
• Disclosure: RYTHM furnished a press release on April 1, 2026 announcing the amendments (Exhibit 99.1 to the 8‑K).

Why It Matters

• The change replaces variable, sales‑based royalties with predictable, fixed annual cash fees totaling $70M starting April 1, 2026, which can materially affect RYTHM’s cash receipts and reported licensing revenue.
• The amendments were implemented to address Nasdaq listing concerns about revenue tied to the cannabis industry, a regulatory consideration investors should note.
• The involvement of a major shareholder and the company’s interim CEO (via Green Thumb) is a relevant related‑party context for investors assessing governance and potential conflicts.