What changed in this filing

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Item 1. Financial Statements

2025-08-11 compared with 2025-05-08 · 262 added, 122 removed, 402 unchanged (49% of the section changed)

8 unchanged sentences

Marketable securities 25,399 28,984

Accounts receivable, net of allowance for credit losses of $ 2,146 and $ 2,177 at March 31, 2025 and December 31, 2024, respectively

Notes receivable, current, net of allowance for credit losses of $ — and $ — at March 31, 2025 and December 31, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 2,080 and $ 2,177 at June 30, 2025 and December 31, 2024, respectively

Notes receivable, current, net of allowance for credit losses of $ 145 and $ — at June 30, 2025 and December 31, 2024, respectively

Inventory 41,737 40,295

24 unchanged sentences

$ 0.001 par value;

100,000,000 shares authorized, 59,487,477 and 59,402,628 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

100,000,000 shares authorized, 59,771,716 and 59,402,628 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 376,492 375,677

7 unchanged sentences

(Unaudited, in thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net sales $ 40,963 $ 53,536 $ 76,666 $ 101,424

9 unchanged sentences

Other income (expense):

Other income — 47

Other (expense) income — ( 10 ) — 37

Interest income 463 737 960 1,339

1 unchanged sentence

Total other income 463 713 960 1,306

Net loss before taxes ( 9,377 ) ( 8,839 )

(Provision) benefit for income taxes — 2

Net loss before income taxes ( 4,811 ) ( 5,801 ) ( 14,188 ) ( 14,640 )

Provision for income taxes — ( 95 ) — ( 93 )

Net loss $ ( 4,811 ) $ ( 5,896 ) $ ( 14,188 ) $ ( 14,733 )

8 unchanged sentences

(Unaudited, in thousands)

Common Stock Additional

Common Stock Treasury Stock Additional

Paid-In Capital Accumulated Deficit Total

Stockholders' Equity

Shares Amount

Shares Amount Shares Amount

Balance as of December 31, 2024 59,403 $ 59 — $ — $ 375,677 $ ( 255,643 ) $ 120,093

4 unchanged sentences

Balance as of March 31, 2025 59,487 $ 59 — $ — $ 376,120 $ ( 265,020 ) $ 111,159

Common Stock Additional

Common stock issued for share-based compensation 192 1 — — — — 1

Common stock withheld for employee payroll taxes — — — ( 52 ) — ( 52 )

Share-based compensation — — — 315 — 315

Common stock issued in connection with acquisitions

93 — — — 109 — 109

Net loss — — ( 4,811 ) ( 4,811 )

Balance as of June 30, 2025 59,772 $ 60 — $ — $ 376,492 $ ( 269,831 ) $ 106,721

Common Stock Treasury Stock Additional

Paid-In Capital Accumulated Deficit Total

Stockholders' Equity

Shares Amount

Shares Amount Shares Amount

Balance as of December 31, 2023 61,484 $ 61 — $ — $ 373,433 $ ( 200,099 ) $ 173,395

4 unchanged sentences

Balance as of March 31, 2024 61,507 $ 62 — $ — $ 374,182 $ ( 208,936 ) $ 165,308

Common stock issued for share-based compensation 181 — — — — — —

Common stock withheld for employee payroll taxes — — — — ( 99 ) — ( 99 )

Share-based compensation — — — — 654 — 654

Repurchase of common stock — — ( 1,739 ) ( 4,190 ) — — ( 4,190 )

Cancellation of common stock ( 800 ) ( 1 ) 800 1,874 — ( 1,873 ) —

Net loss — — — — — ( 5,896 ) ( 5,896 )

Balance as of June 30, 2024 60,888 $ 61 ( 939 ) $ ( 2,316 ) $ 374,737 $ ( 216,705 ) $ 155,777

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

3 unchanged sentences

(Unaudited, in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

6 unchanged sentences

Change in value of marketable securities ( 398 ) ( 727 )

Changes in operating assets and liabilities:

Impairment loss on operating lease right-of-use assets — 78

Changes in operating assets and liabilities, net of acquisitions:

Accounts and notes receivable ( 3,172 ) ( 903 )

8 unchanged sentences

Cash flows from investing activities:

Acquisitions, net of cash acquired ( 1,013 ) —

Purchase of marketable securities ( 18,985 ) ( 28,034 )

5 unchanged sentences

Common stock withheld for employee payroll taxes ( 111 ) ( 127 )

Common stock repurchased — ( 4,190 )

Net cash and cash equivalents used in financing activities ( 111 ) ( 4,317 )

Net increase in cash and cash equivalents 5,271 1,293

Net decrease in cash and cash equivalents ( 4,162 ) ( 2,179 )

Cash and cash equivalents at the beginning of period 27,471 29,757

1 unchanged sentence

Supplemental cash flow disclosures and non-cash investing and financing transactions:

Cash paid for interest $ — $ 56

Cash paid for income taxes $ 199 $ 58

Right-of use assets obtained in exchange for new or modified operating lease liabilities $ 297 $ 3,506

Fair value of common stock issued in business combination $ 109 $ —

Fair value of contingent consideration $ 83 $ —

Cash paid for interest $ — $ 70

Cancellation of common stock $ — $ 1,873

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

GrowGeneration Corp.

4 unchanged sentences

and its Storage Solutions segment, composed of the Company's benching, racking, and storage solutions business.

As of March 31, 2025, GrowGeneration has 31 retail locations across 12 states in the U.S.

As of June 30, 2025, GrowGeneration has 29 retail locations across 11 states in the U.S.

The Company also operates an online superstore at growgeneration.com, as well as a wholesale distribution business for resellers, and a benching, racking, and storage solutions business, Mobile Media or MMI.

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All amounts included in the accompanying notes to the Condensed Consolidated Financial Statements, except per share data, are in thousands (000).

Reclassifications

Certain amounts in the prior period Condensed Consolidated Financial Statements have been reclassified to conform to the current period presentation.

These reclassifications had no effect on reported net loss within the Condensed Consolidated Statements of Operations.

Use of Estimates

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2023-09, Income Taxes (Topic 740)—Improvements to income tax disclosures ("ASU 2023-09"), expanding the disclosures requirement for income taxes primarily by requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation.

ASU 2023-09 is effective for annual periods beginning after

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted, and adoption of ASU 2023-09 can be applied prospectively or retrospectively.

The Company is currently evaluating the impact of this standard and will adopt this guidance in the fourth quarter of 2025 to provide additional disclosures as required.

GROWGENERATION CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

December 15, 2024.

Early adoption is permitted, and adoption of ASU 2023-09 can be applied prospectively or retrospectively.

The Company is currently evaluating the impact of this standard.

June 30, 2025

In November 2024, the FASB issued ASU No.

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The Company is currently evaluating the impact of this standard.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which provides a practical expedient to measure credit losses on accounts receivable and contract assets.

ASU 2025-05 is effective for annual periods beginning after December 15, 2025.

Early adoption of ASU 2025-05 is permitted and should be applied prospectively.

The Company is currently evaluating the impact of this standard.

FAIR VALUE MEASUREMENTS

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The marketable securities are classified as available-for-sale and are carried at fair value based on quoted market prices.

Changes in fair value of marketable securities, principally derived from accretion of discounts, were $ 0.2 million and $ 0.4 million for the three months ended March 31, 2025 and 2024, respectively.

Changes in fair value of marketable securities, principally derived from accretion of discounts, were $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2025, respectively, and $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2024, respectively.

Changes in fair value of marketable securities are included in Interest income on the Condensed Consolidated Statements of Operations.

Level March 31,

Level June 30,

2025 December 31,

1 unchanged sentence

Marketable securities 2 $ 25,399 $ 28,984

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

REVENUE RECOGNITION

2 unchanged sentences

Refer to Note 14, Segments, for disaggregated revenue disclosures.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Contract Assets and Liabilities

Depending on the timing of when title of product transfers to a customer and when a customer makes payments for such product, the Company recognizes an accounts receivable (contract asset) or a customer deposit (contract liability).

Accounts Receivable and Contract Liabilities

Depending on the timing of when title of product transfers to a customer and when a customer makes payments for such product, the Company recognizes an accounts receivable or a customer deposit.

The opening and closing balances of the Company's accounts receivables and customer deposits were as follows:

2 unchanged sentences

$ 7,361 $ 2,404

Balance as of March 31, 2025

Decrease $ ( 425 ) $ ( 54 )

Balance as of June 30, 2025

Increase $ 3,064 $ 44

Balance as of January 1, 2024

$ 8,895 $ 5,359

Balance as of March 31, 2024

Decrease $ ( 1,063 ) $ ( 1,479 )

Of the total amount of customer deposits as of January 1, 2025, $ 1.1 million was reported as revenue during the three months ended March 31, 2025.

Of the total amount of customer deposits as of January 1, 2024, $ 2.9 million was reported as revenue during the three months ended March 31, 2024.

Notes receivable at March 31, 2025 and December 31, 2024 were as follows:

Balance as of June 30, 2024

Increase (decrease) $ 768 $ ( 2,352 )

Of the total amount of customer deposits as of January 1, 2025, $ 0.5 million and $ 1.6 million was reported as revenue during the three and six months ended June 30, 2025, respectively.

Of the total amount of customer deposits as of January 1, 2024, $ 1.1 million and $ 4.0 million was reported as revenue during the three and six months ended June 30, 2024, respectively.

Notes receivable at June 30, 2025 and December 31, 2024 were as follows:

2025 December 31,

2 unchanged sentences

Notes receivable, net $ 909 $ 1,056

During the three months ended March 31, 2024, the Company received a $ 0.3 million settlement related to a $ 1.5 million note receivable, which had been fully reserved as of December 31, 2023.

During the six months ended June 30, 2024, the Company received a $ 0.3 million settlement related to a $ 1.5 million note receivable, which had been fully reserved as of December 31, 2023.

Refer to Note 13, Commitments and Contingencies, for additional information regarding the settlement.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

PROPERTY AND EQUIPMENT

Property and equipment at March 31, 2025 and December 31, 2024 consisted of the following:

Property and equipment at June 30, 2025 and December 31, 2024 consisted of the following:

2025 December 31,

8 unchanged sentences

Property and equipment, net $ 11,948 $ 15,493

Depreciation and amortization expense related to property and equipment was $ 2.0 million and $ 2.1 million for the three months ended March 31, 2025 and 2024, respectively.

In conjunction with the Company's restructuring activities as discussed in Note 14, Restructuring, the Company reassessed and shortened the estimated useful life of certain capitalized software assets, which resulted in a $ 0.6 million increase to depreciation and amortization expense related to property and equipment in the

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

three months ended March 31, 2025.

These capitalized software assets became fully amortized and were retired during the three months ended March 31, 2025.

Depreciation and amortization expense related to property and equipment was $ 1.2 million and $ 3.2 million for the three and six months ended June 30, 2025, respectively, and $ 1.9 million and $ 4.0 million for the three and six months ended June 30, 2024, respectively.

In conjunction with the Company's restructuring activities as discussed in Note 15, Restructuring, the Company retired certain capitalized software assets during the six months ended June 30, 2025.

Refer to Note 15, Restructuring, for additional information on the restructuring activities.

3 unchanged sentences

Balance as of December 31, 2024 $ — $ 1,605 $ 1,605

Balance as of March 31, 2025 $ — $ 1,605 $ 1,605

Accumulated impairment for goodwill related entirely to the Cultivation and Gardening segment and totaled $ 131.9 million as of March 31, 2025 and December 31, 2024.

The changes in intangible assets by segment for the three months ended March 31, 2025 were as follows:

Balance as of June 30, 2025 $ — $ 1,605 $ 1,605

Accumulated impairment for goodwill related entirely to the Cultivation and Gardening segment and totaled $ 131.9 million as of June 30, 2025 and December 31, 2024.

The changes in intangible assets by segment for the six months ended June 30, 2025 were as follows:

Cultivation and Gardening Storage Solutions Total

1 unchanged sentence

Amortization ( 2,714 ) ( 351 ) ( 3,065 )

Balance as of March 31, 2025 $ 5,518 $ 1,723 $ 7,241

Acquisitions 918 — 918

Balance as of June 30, 2025 $ 5,085 $ 1,547 $ 6,632

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

On June 6, 2025, the Company purchased substantially all of the assets of Hydro Generation Inc.

(referred to as "Viagrow"), a domestic supplier of gardening and hydroponic equipment.

The acquisition related intangible assets in the preceding table represent the preliminary estimates of the fair values of identified intangible assets.

As of June 30, 2025, the Company has not finalized its preliminary purchase price allocation.

Refer to Note 12, Acquisitions, for additional information regarding the Viagrow acquisition.

Intangible assets on the Condensed Consolidated Balance Sheets consisted of the following:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Amount Accumulated

3 unchanged sentences

Trade names $ 27,990 $ ( 24,454 ) $ 3,536 $ 27,790 $ ( 21,908 ) $ 5,882

Patents, trademarks 69 ( 69 ) — 69 ( 69 ) —

Customer relationships 13,587 ( 10,492 ) 3,095 12,869 ( 9,974 ) 2,895

1 unchanged sentence

Intellectual property 1,136 ( 1,136 ) — 1,136 ( 1,136 ) —

Patents, trademarks 69 ( 69 ) — 69 ( 69 ) —

Total $ 43,642 $ ( 37,010 ) $ 6,632 $ 42,724 $ ( 33,945 ) $ 8,779

Amortization expense was $ 1.5 million and $ 1.7 million for the three months ended March 31, 2025 and 2024, respectively.

Future amortization expense as of March 31, 2025 was as follows:

Amortization expense was $ 1.6 million and $ 3.1 million for the three and six months ended June 30, 2025, respectively, and $ 1.7 million and $ 3.4 million for the three and six months ended June 30, 2024, respectively.

Future amortization expense as of June 30, 2025 was as follows:

2025 (remainder of the year) $ 2,922

Thereafter 186

Total $ 6,632

For the six months ended June 30, 2025 and 2024, the effective tax rate was 0.0 % and 0.6 %, respectively.

The effective tax rate for each of the six months ended June 30, 2025 and 2024 was lower than the U.S.

federal statutory rate of 21.0% primarily due to the Company's valuation allowance against deferred tax assets.

As of June 30, 2025, the Company concluded that its deferred tax assets are not expected to be realizable, based on positive and negative evidence, therefore it has assigned a full valuation allowance against them.

On July 4, 2025, the “One Big Beautiful Bill Act”, or “OBBBA”, was signed into law, making several provisions of the Tax Cuts and Jobs Act permanent.

Under Accounting Standards Codification Topic 740, Income Taxes , the effects of changes in tax laws must be recognized in the period of enactment.

The Company is currently evaluating the potential impact of OBBBA, but based on a preliminary assessment, the provisions of the new law are not expected to have a material impact on the Company’s consolidated financial statements.

No adjustments have been made to the financial statements as of June 30, 2025 as a result of the OBBBA.

GROWGENERATION CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

For the three months ended March 31, 2025 and 2024, the effective tax rate was 0.0 %.

The effective tax rate for each of the three months ended March 31, 2025 and 2024 was lower than the U.S.

federal statutory rate of 21.0% primarily due to the Company's valuation allowance against deferred tax assets.

As of March 31, 2025, the Company concluded that its deferred tax assets are not expected to be realizable, based on positive and negative evidence, therefore it has assigned a full valuation allowance against them.

June 30, 2025

The right-of-use assets and corresponding liabilities related to the Company's operating leases were as follows:

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The components of lease costs were as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Operating lease costs $ 2,305 $ 2,531 $ 4,597 $ 5,094

3 unchanged sentences

Total operating lease costs $ 3,013 $ 2,712 $ 5,166 $ 5,752

Future maturities of the Company's operating lease liabilities and receipts from subleases as of March 31, 2025 were as follows:

Future maturities of the Company's operating lease liabilities and receipts from subleases as of June 30, 2025 were as follows:

Lease Payments Sublease Receipts

7 unchanged sentences

imputed interest ( 5,606 )

Operating lease liability as of March 31, 2025

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Operating lease liability as of June 30, 2025

Supplemental and other information related to leases was as follows:

Three Months Ended March 31,

Six Months Ended June 30,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flow from operating leases $ 4,698 $ 5,097

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

EARNINGS PER SHARE

The following table sets forth the composition of the weighted average shares (denominator) used in the basic and dilutive loss per share computation for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table sets forth the composition of the weighted average shares (denominator) used in the basic and diluted loss per share computation for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net loss $ ( 4,811 ) $ ( 5,896 ) $ ( 14,188 ) $ ( 14,733 )

1 unchanged sentence

Effect of dilutive outstanding restricted stock units and stock options

Adjusted weighted average shares outstanding, dilutive 59,441 61,499

Adjusted weighted average shares outstanding, diluted

59,552 60,681 59,497 61,090

Basic loss per share $ ( 0.08 ) $ ( 0.10 ) $ ( 0.24 ) $ ( 0.24 )

Dilutive loss per share $ ( 0.16 ) $ ( 0.14 )

Diluted loss per share calculations for the three months ended March 31, 2025 excluded 1.4 million non-vested restricted stock units and 17 thousand shares of common stock issuable upon exercise of stock options that would have been anti-dilutive.

Diluted loss per share calculations for the three months ended March 31, 2024 excluded 0.9 million non-vested restricted stock units and 0.6 million shares of common stock issuable upon exercise of stock options that would have been anti-dilutive.

Diluted loss per share

$ ( 0.08 ) $ ( 0.10 ) $ ( 0.24 ) $ ( 0.24 )

Diluted loss per share calculations for each of the three and six months ended June 30, 2025 excluded 1.4 million non-vested restricted stock units.

In addition, for the three and six months ended June 30, 2025, 7 thousand and 12 thousand shares of common stock issuable upon exercise of stock options were excluded that would have been anti-dilutive, respectively.

Diluted loss per share calculations for each of the three and six months ended June 30, 2024 excluded 0.9 million non-vested restricted stock units, and 0.5 million shares of common stock issuable upon exercise of stock options that would have been anti-dilutive.

SHARE-BASED PAYMENTS

The Company maintains a long-term incentive plan, the Second Amended and Restated 2018 Equity Incentive Plan, for employees, non-employee members of its Board of Directors (the "Board"), and consultants.

The plan allows the Company to grant equity-based compensation awards, including stock options, stock appreciation rights, performance share units, restricted stock units, restricted stock awards, common stock warrants, or a combination of awards (collectively, "share-based awards").

The Company maintains a long-term incentive plan, the Second Amended and Restated 2018 Equity Incentive Plan (the "2018 Equity Incentive Plan", for employees, non-employee members of its Board of Directors (the "Board"), and consultants.

The 2018 Equity Incentive Plan allows the Company to grant equity-based compensation awards, including stock options, stock appreciation rights, performance share units, restricted stock units, restricted stock awards, common stock warrants, or a combination of awards (collectively, "share-based awards").

The Company accounts for share-based payments through the measurement and recognition of compensation expense for share-based awards made to employees, non-employee members of the Board, and consultants of the Company, including stock options and restricted stock units.

The Company recorded share-based compensation expense of $ 0.5 million and $ 0.8 million in the three months ended March 31, 2025 and 2024, respectively.

The Company recorded share-based compensation expense of $ 0.3 million and $ 0.8 million in the three and six months ended June 30, 2025, respectively, and $ 0.7 million and $ 1.4 million in the three and six months ended June 30, 2024, respectively.

Restricted Stock Units

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Restricted stock units are valued using the market value on the grant date.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Restricted stock unit activity for the three months ended March 31, 2025 is presented in the following table:

Restricted stock unit activity for the six months ended June 30, 2025 is presented in the following table:

Units Weighted Average Grant Date Fair Value

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Forfeited ( 101 ) $ 2.34

Nonvested as of March 31, 2025

As of March 31, 2025, the Company had approximately $ 2.7 million of unrecognized share-based compensation related to restricted stock units, which is expected to be recognized over a weighted average period of approximately 2.5 years.

During the three months ended March 31, 2024, no restricted stock units were granted.

Nonvested as of June 30, 2025

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

As of June 30, 2025, the Company had approximately $ 2.4 million of unrecognized share-based compensation related to restricted stock units, which is expected to be recognized over a weighted average period of approximately 2.4 years.

During the six months ended June 30, 2024, 165 thousand restricted stock units were granted at a weighted average grant date fair value of $ 2.79 .

Performance Stock Units

During the six months ended June 30, 2025, the Board granted 90 thousand short-term, performance stock units with a weighted average grant date fair value of $ 0.91 to its named executive officers under the 2018 Equity Incentive Plan.

The number of shares issuable as a result of the performance stock units vesting ranges from 0 % and 125 % and is determined based on Company-specific net sales targets to be achieved for fiscal year 2025 as well as service conditions.

Although no awards vest until the Company attains the performance conditions described above, compensation will be recorded based on an assessment of the probability of meeting the performance conditions.

During the six months ended June 30, 2025, the Company concluded that the probability of attaining the performance conditions under the awards to be remote.

Therefore, no expense was recognized related to the performance stock units.

If the performance conditions are probable of being achieved, the Company will begin recognizing the associated non-cash, share-based compensation expense.

Stock Options

Stock option activity for the three months ended March 31, 2025 is presented in the following table:

Stock option activity for the six months ended June 30, 2025 is presented in the following table:

Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Weighted Average Grant Date Fair Value

4 unchanged sentences

Forfeited or expired ( 16 ) 4.63 — 2.56

Outstanding as of March 31, 2025

16 $ 4.63 0.11 $ 2.56

Vested and exercisable as of March 31, 2025

16 $ 4.63 0.11 $ 2.56

Outstanding as of June 30, 2025

Vested and exercisable as of June 30, 2025

STOCKHOLDERS' EQUITY

On March 20, 2024, the Board authorized a share repurchase program, whereby the Company could repurchase up to $ 6.0 million worth of its common stock in open market transactions pursuant to Rule 10b-18 of the Exchange Act and a 10b5-1 trading plan.

The program began on April 1, 2024.

The program began on April 1, 2024 and as of December 31, 2024, the Company completed all purchases available under the stock repurchase program.

This share repurchase program was intended to enhance long-term shareholder value.

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The stock repurchase program could be amended, suspended, or discontinued at any time by the Company.

As of December 31, 2024, the Company completed all purchases available under the stock repurchase program.

During the three and six months ended June 30, 2024, the Company repurchased 1.7 million shares of common stock at an average price of $ 2.39 per share, exclusive of incremental direct costs.

The Company recognized the common stock repurchased as treasury stock at the amount paid to repurchase its shares, including the incremental direct costs to repurchase the common stock, as a reduction to stockholders' equity on the Condensed Consolidated Balance Sheets.

The Company retired 0.8 million shares of treasury stock under the repurchase program in the three and six months ended June 30, 2024.

The retirement of treasury stock was recognized as a deduction from common stock for the shares' par value and any excess cost over par value was recognized as a deduction from retained earnings.

Treasury stock is retired on a first in, first out basis.

The Company retired all shares of treasury stock acquired under the share repurchase program during the year ended December 31, 2024.

The shares were returned to the status of authorized but unissued shares.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

On June 6, 2025, the Company purchased substantially all of the assets of Viagrow, a domestic supplier of gardening and hydroponic equipment.

The acquisition further diversifies the Company's home gardening and hydroponic gardening proprietary brand product offerings as well as expands the Company's outreach to significant new customers through relationships with major home improvement mass-market retailers and e-commerce platforms.

The total consideration for the purchase of Viagrow was $ 1.2 million including cash paid and common stock issued on the date of acquisition, with certain additional amounts to be paid in future periods.

The preliminary estimated purchase price includes deferred equity consideration to be issued upon settling any discrepancies of net assets acquired, and contingent consideration to be paid in cash over three years, dependent on the achievement of certain performance goals.

As of June 30, 2025, the Company has not finalized its preliminary purchase price allocation.

The preliminary purchase price allocation may be adjusted as a result of the finalization of the purchase price allocation procedures related to the assets acquired and liabilities assumed.

Measurement period adjustments are recognized in the reporting period in which adjustments are determined and calculated as if the accounting had been completed at the acquisition date.

The final fair value determination of the assets acquired and liabilities assumed will be completed prior to one year from the transaction completion.

The table below details the consideration paid, and the preliminary estimated allocation of the purchase price to the acquired net assets during the six months ended June 30, 2025.

Consideration

Common stock 109

Contingent consideration 83

Deferred equity consideration 23

Total consideration 1,228

Assets and liabilities acquired

Inventory 275

Prepaids and other current assets 10

Property and equipment 41

Intangible assets 918

Customer deposits ( 16 )

Total $ 1,228

The following table represents the preliminary estimates of the fair values of identified intangible assets and their related estimated remaining useful lives.

Estimated Fair Value Estimated Useful Life

Customer relationships $ 718 6.0 years

Trade Names 200 5.0 years

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

The following table represents the revenue and earnings included in the Condensed Consolidated Statement of Operations from the date of acquisition for the three and six months ended June 30, 2025.

Acquisition date June 6, 2025

Revenue $ 122

Net income $ 25

The following table represents the pro forma Condensed Consolidated Statement of Operations as if the acquisition was completed on January 1, 2024.

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Revenue $ 41,586 $ 54,398 $ 77,940 $ 103,160

Net loss $ ( 4,704 ) $ ( 5,916 ) $ ( 13,925 ) $ ( 14,728 )

The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the Viagrow acquisition had been consummated as of the beginning of the periods presented or of results that may occur in the future.

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

It is the Company's opinion that these claims individually and in the aggregate are not expected to have a material adverse effect on its financial condition, results of operations or cash flows.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

In December 2021, the Company was sued in the U.S.

6 unchanged sentences

In February 2024, the Company received $ 0.3 million from the bankruptcy proceedings, which it recorded as a recovery on the $ 1.5 million Note & Option.

The remainder of the Note & Option, which were fully reserved, were written off during the three months ended March 31, 2024.

The remainder of the Note & Option, which were fully reserved, were written off during the six months ended June 30, 2024.

There can be no assurance that future developments related to pending claims or claims filed in the future, whether as a result of adverse outcomes or as a result of significant defense costs, will not have a material effect on the Company's financial condition, results of operations or cash flows.

3 unchanged sentences

In the ordinary course of its business, the Company makes certain indemnities under which it may be required to make payments in relation to certain transactions.

As of March 31, 2025, the Company did not have any liabilities associated with indemnities.

As of June 30, 2025, the Company did not have any liabilities associated with indemnities.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

In addition, the Company, as permitted under Colorado law and in accordance with its amended and restated certificate of incorporation and amended and restated bylaws, in each case, as amended to date, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company's request in such capacity.

11 unchanged sentences

The Company's CODM is the chief executive officer.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Disaggregated revenue by segment is presented in the following tables:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Net sales 2025 2024 2025 2024

7 unchanged sentences

Total $ 40,963 $ 53,536 $ 76,666 $ 101,424

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Net sales 2025 2024 2025 2024

7 unchanged sentences

Total $ 40,963 $ 53,536 $ 76,666 $ 101,424

Selected information by segment is presented in the following tables for the three and six months ended:

GROWGENERATION CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Selected information by segment is presented in the following tables for the three months ended:

March 31, 2025

June 30, 2025

Three Months Ended June 30, 2025

Cultivation & Gardening Storage Solutions Corporate Total

17 unchanged sentences

Other income — — 463 463

Net income (loss) before taxes $ 535 $ 380 $ ( 10,292 ) $ ( 9,377 )

Net income (loss) before income taxes

$ 1,573 $ 2,154 $ ( 8,538 ) $ ( 4,811 )

(1) Other segment items for each reportable segment include travel expenses, transaction fees, and other miscellaneous expenses.

March 31, 2024

Six Months Ended June 30, 2025

Cultivation & Gardening Storage Solutions Corporate Total

12 unchanged sentences

Selling, general, and administrative — — 13,263 13,263

Estimated credit losses — — 255 255

Depreciation and amortization — — 6,272 6,272

Total operating expenses 13,961 2,698 19,790 36,449

Income (loss) from operations 2,108 2,534 ( 19,790 ) ( 15,148 )

Other income — — 960 960

Net income (loss) before income taxes

$ 2,108 $ 2,534 $ ( 18,830 ) $ ( 14,188 )

(1) Other segment items for each reportable segment include travel expenses, transaction fees, and other miscellaneous expenses.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

Three Months Ended June 30, 2024

Cultivation & Gardening Storage Solutions Corporate Total

Net sales $ 46,110 $ 7,426 $ — $ 53,536

Cost of sales 35,174 3,941 — 39,115

Gross profit 10,936 3,485 — 14,421

Operating expenses

Store operations and other operational expenses:

Employee costs 3,598 755 — 4,353

Facilities 3,358 284 — 3,642

External service providers 301 16 — 317

Other segment items (1)

1,670 228 — 1,898

Total store operations and other operational expenses 8,927 1,283 — 10,210

Other operating expenses

Selling, general, and administrative — — 7,104 7,104

Estimated credit losses — — 6 6

Depreciation and amortization — — 3,615 3,615

Total operating expenses 8,927 1,283 10,725 20,935

Income (loss) from operations 2,009 2,202 ( 10,725 ) ( 6,514 )

Other income — — 713 713

Net income (loss) before income taxes

$ 2,009 $ 2,202 $ ( 10,012 ) $ ( 5,801 )

(1) Other segment items for each reportable segment include travel expenses, transaction fees, and other miscellaneous expenses.

Six Months Ended June 30, 2024

Cultivation & Gardening Storage Solutions Corporate Total

Net sales $ 89,218 $ 12,206 $ — $ 101,424

Cost of sales 67,957 6,682 — 74,639

Gross profit 21,261 5,524 — 26,785

Operating expenses

Store operations and other operational expenses:

Employee costs 7,252 1,526 — 8,778

Facilities 6,838 642 — 7,480

External service providers 830 27 — 857

Other segment items (1)

3,268 461 — 3,729

Total store operations and other operational expenses 18,188 2,656 — 20,844

Other operating expenses

Selling, general, and administrative — — 15,012 15,012

Estimated credit recoveries — — ( 482 ) ( 482 )

3 unchanged sentences

Other income — — 1,306 1,306

Net income (loss) before taxes $ 1,064 $ 666 $ ( 10,569 ) $ ( 8,839 )

Net income (loss) before income taxes

$ 3,073 $ 2,868 $ ( 20,581 ) $ ( 14,640 )

(1) Other segment items for each reportable segment include travel expenses, transaction fees, and other miscellaneous expenses.

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

RESTRUCTURING

2 unchanged sentences

The Company's restructuring and restructuring-related charges consisted of inventory disposal costs, retail location closure costs including related contract termination costs and fixed asset disposals, employee termination benefits, asset impairments including the impairment of operating lease right-of-use assets, and other associated costs.

Since the restructuring activities were announced in July 2024, the Company incurred aggregate restructuring and restructuring-related costs of $ 3.5 million, of which $ 1.1 million were incurred during the three months ended March 31, 2025 and are presented on the Condensed Consolidated Statements of Operations as follows:

The Company substantially completed its restructuring activities as of March 31, 2025.

Overall, the Company incurred aggregate restructuring and restructuring-related costs of $ 3.5 million, of which $ 1.1 million were incurred during the six months ended June 30, 2025 and are presented on the Condensed Consolidated Statements of Operations in the following table.

The Company does not expect to incur significant additional restructuring and restructuring-related costs in future periods.

Restructuring

5 unchanged sentences

Total restructuring and restructuring-related charges $ ( 1,141 )

(1) Costs consist primarily of fixed asset disposals and lease contract termination costs for previously closed retail locations

(1) Costs consist primarily of property and equipment disposals and lease contract termination costs for previously closed retail locations

(2) Costs consist of corporate operational and administrative contract terminations

In conjunction with the Company's restructuring activities related to operational and administrative improvements, the Company reassessed and shortened the estimated useful life of certain capitalized software assets, which resulted in an $ 0.6 million increase to depreciation and amortization expense related to property and equipment in the three months ended March 31, 2025.

These capitalized software assets became fully amortized and were retired during the three months ended March 31, 2025.

These capitalized software assets became fully amortized and were retired during the six months ended June 30, 2025.

Additionally, certain facilities costs or contract termination costs related to closed retail locations for which the Company is pursuing sublease arrangements or lease terminations may be paid over the remaining terms which extend through 2032.

The liabilities associated with restructuring costs are included in Accrued liabilities and Payroll and payroll tax liabilities on the Condensed Consolidated Balance Sheets.

The liabilities associated with restructuring costs were included in Accrued liabilities and Payroll and payroll tax liabilities on the Condensed Consolidated Balance Sheets.

Activities related to liabilities incurred under the restructuring plan were as follows:

3 unchanged sentences

Payments and other adjustments ( 880 ) ( 9 ) ( 889 )

Balance as of March 31, 2025 $ — $ — $ —

Overall, the Company has incurred a total of approximately $ 3.5 million in restructuring and restructuring-related costs, including the $ 1.1 million incurred in the three months ended March 31, 2025.

The Company has substantially completed its restructuring activities as of March 31, 2025 and does not expect to incur significant additional restructuring and restructuring-related costs in future periods.

Balance as of June 30, 2025 $ — $ — $ —

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements