What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-08-11 · 180 added, 133 removed, 531 unchanged (37% of the section changed)

4 unchanged sentences

(Unaudited, in thousands, except shares)

September 30,

2025 December 31,

2 unchanged sentences

Marketable securities 20,955 28,984

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

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

Notes receivable, current, net of allowance for credit losses of $ 187 and $ — at September 30, 2025 and December 31, 2024, respectively

Inventory 40,184 40,295

24 unchanged sentences

$ 0.001 par value;

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

100,000,000 shares authorized, 59,843,443 and 59,402,628 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 376,912 375,677

7 unchanged sentences

(Unaudited, in thousands, except per share amounts)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

7 unchanged sentences

Depreciation and amortization 2,649 4,972 8,921 12,329

Impairment loss — 220 — 220

Total operating expenses 15,698 22,901 52,147 65,632

1 unchanged sentence

Other income (expense):

Other (expense) income — ( 10 ) — 37

Other expense — ( 50 ) — ( 13 )

Interest income 407 663 1,367 2,002

2 unchanged sentences

Net loss before income taxes ( 2,435 ) ( 11,478 ) ( 16,623 ) ( 26,118 )

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

(Provision) benefit for income taxes ( 2 ) 43 ( 2 ) ( 50 )

Net loss $ ( 2,437 ) $ ( 11,435 ) $ ( 16,625 ) $ ( 26,168 )

25 unchanged sentences

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

Common stock issued for share based compensation 71 — — — — — —

Common stock withheld for employee payroll taxes — — — — ( 1 ) — ( 1 )

Share-based compensation — — — — 421 — 421

Net loss — — — — — ( 2,437 ) ( 2,437 )

Balance as of September 30, 2025 59,843 $ 60 — $ — $ 376,912 $ ( 272,268 ) $ 104,704

Common Stock Treasury Stock Additional

15 unchanged sentences

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

Common stock issued for share based compensation 71 — — — — — —

Common stock withheld for employee payroll taxes — — — — ( 2 ) — ( 2 )

Share-based compensation — — — — 672 — 672

Repurchase of common stock — — ( 778 ) ( 1,847 ) — — ( 1,847 )

Cancellation of common stock ( 1,717 ) ( 2 ) 1,717 4,163 — ( 4,161 ) —

Net loss — — — — — ( 11,435 ) ( 11,435 )

Balance as of September 30, 2024 59,242 $ 59 — $ — $ 375,407 $ ( 232,301 ) $ 143,165

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

3 unchanged sentences

(Unaudited, in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

18 unchanged sentences

Cash flows from investing activities:

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

Acquisitions ( 1,013 ) —

Purchase of marketable securities ( 25,032 ) ( 41,878 )

21 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 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 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.

As of September 30, 2025, GrowGeneration has 24 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 mass-market retailers, and a benching, racking, and storage solutions business, Mobile Media or MMI.

Basis of Presentation

26 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

In November 2024, the FASB issued ASU No.

7 unchanged sentences

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

The Company is currently evaluating the impact of this standard.

The Company is currently evaluating the impact of this standard and expects to adopt the standard for the annual period beginning January 1, 2026.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)—Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"), which amends current guidance for capitalizing internal use software costs by removing all references to prescriptive and sequential software development stages to better align with current iterative development methods.

ASU 2025-06 is effective for interim and annual periods beginning after December 15, 2027.

Early adoption is permitted as of the beginning of an annual reporting period, and ASU 2025-06 can be applied prospectively, retrospectively, or on a modified transition approach.

The Company is currently evaluating the impact of this standard and expects to adopt the standard prospectively for the annual period beginning January 1, 2026.

FAIR VALUE MEASUREMENTS

6 unchanged sentences

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies, and similar techniques.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgement.

Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized in Level 3.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.

Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3.

A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and all other current liabilities approximate fair values due to their short-term nature.

1 unchanged sentence

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 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, principally derived from accretion of discounts, were $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2025, respectively, and $ 0.3 million and $ 1.0 million for the three and nine months ended September 30, 2024, respectively.

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

Level June 30,

Level September 30,

2025 December 31,

1 unchanged sentence

Marketable securities 2 $ 20,955 $ 28,984

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

REVENUE RECOGNITION

8 unchanged sentences

$ 7,361 $ 2,404

Balance as of June 30, 2025

Balance as of September 30, 2025

Increase $ 5,619 $ 1,799

1 unchanged sentence

$ 8,895 $ 5,359

Balance as of June 30, 2024

Balance as of September 30, 2024

Increase (decrease) $ 1,429 $ ( 2,728 )

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:

Of the total amount of customer deposits as of January 1, 2025, $ 0.1 million and $ 1.7 million was reported as revenue during the three and nine months ended September 30, 2025, respectively.

Of the total amount of customer deposits as of January 1, 2024, $ 0.4 million and $ 4.4 million was reported as revenue during the three and nine months ended September 30, 2024, respectively.

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

September 30,

2025 December 31,

2 unchanged sentences

Notes receivable, net $ 832 $ 1,056

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.

During the nine months ended September 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.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

PROPERTY AND EQUIPMENT

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

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

September 30,

2025 December 31,

8 unchanged sentences

Property and equipment, net $ 10,875 $ 15,493

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.

Depreciation and amortization expense related to property and equipment was $ 1.1 million and $ 4.3 million for the three and nine months ended September 30, 2025, respectively, and $ 3.3 million and $ 7.3 million for the three and nine months ended September 30, 2024, respectively.

In conjunction with the Company's restructuring activities as discussed in Note 16, Restructuring, the Company retired certain capitalized software assets during the nine months ended September 30, 2025.

Refer to Note 16, Restructuring, for additional information on the restructuring activities.

3 unchanged sentences

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

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:

Additions & measurement period adjustments 447 — 447

Balance as of September 30, 2025 $ 447 $ 1,605 $ 2,052

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

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

Cultivation and Gardening Storage Solutions Total

2 unchanged sentences

Acquisitions 470 — 470

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

Balance as of September 30, 2025 $ 3,281 $ 1,372 $ 4,653

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.

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

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

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

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Amount Accumulated

8 unchanged sentences

Total $ 43,193 $ ( 38,540 ) $ 4,653 $ 42,724 $ ( 33,945 ) $ 8,779

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:

Amortization expense was $ 1.5 million and $ 4.6 million for the three and nine months ended September 30, 2025, respectively, and $ 1.7 million and $ 5.0 million for the three and nine months ended September 30, 2024, respectively.

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

2025 (remainder of the year) $ 1,327

1 unchanged sentence

Total $ 4,653

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.

For the nine months ended September 30, 2025 and 2024, the effective tax rate was 0.0 % and 0.2 %, respectively.

The effective tax rate for each of the nine months ended September 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.

As of September 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.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

While the Company continues to evaluate the potential impact of OBBBA, the provisions of the new law have not had and 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 September 30, 2025 as a result of the OBBBA.

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

September 30,

2025 December 31,

Operating leases right-of-use assets, net $ 29,462 $ 34,453

$ 30,667 $ 34,453

Current maturities of operating lease liability $ 6,778 $ 7,398

1 unchanged sentence

Total lease liability $ 31,917 $ 37,031

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

The weighted-average remaining lease terms and weighted-average discount rates for operating leases were as follows:

September 30,

Weighted average remaining lease term 5.1 years 5.7 years

1 unchanged sentence

The components of lease costs were as follows:

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

4 unchanged sentences

Total operating lease costs $ 2,351 $ 2,908 $ 7,517 $ 8,659

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

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

Lease Payments Sublease Receipts

7 unchanged sentences

imputed interest ( 5,199 )

Operating lease liability as of June 30, 2025

Operating lease liability as of September 30, 2025

Supplemental and other information related to leases was as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

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

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

EARNINGS PER SHARE

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,

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 and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

7 unchanged sentences

$ ( 0.04 ) $ ( 0.19 ) $ ( 0.28 ) $ ( 0.43 )

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.

Diluted loss per share calculations for the three and nine months ended September 30, 2025 excluded 1.3 million and 1.4 million non-vested restricted stock units, respectively.

In addition, for the nine months ended September 30, 2025, 8 thousand shares of common stock issuable upon exercise of stock options were excluded that would have been anti-dilutive.

Diluted loss per share calculations for the three and nine months ended September 30, 2024 excluded 0.7 million and 0.8 million non-vested restricted stock units, respectively.

In addition, for each of the three and nine months ended September 30, 2024, 0.5 million shares of common stock issuable upon exercise of stock options that would have been anti-dilutive.

SHARE-BASED PAYMENTS

2 unchanged sentences

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 $ 0.3 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.

The Company recorded share-based compensation expense of $ 0.4 million and $ 1.2 million in the three and nine months ended September 30, 2025, respectively, and $ 0.7 million and $ 2.1 million in the three and nine months ended September 30, 2024, respectively.

Restricted Stock Units

2 unchanged sentences

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

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

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

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

Units Weighted Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 136 ) $ 2.27

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 .

Nonvested as of September 30, 2025

As of September 30, 2025, the Company had approximately $ 2.0 million of unrecognized share-based compensation related to restricted stock units, which is expected to be recognized over a weighted average period of approximately 2.2 years.

During the nine months ended September 30, 2024, 672 thousand restricted stock units were granted at a weighted average grant date fair value of $ 2.29 .

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.

During the nine months ended September 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.

During the nine months ended September 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.

1 unchanged sentence

Stock Options

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

Stock option activity for the nine months ended September 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 June 30, 2025

Vested and exercisable as of June 30, 2025

Outstanding as of September 30, 2025

Vested and exercisable as of September 30, 2025

STOCKHOLDERS' EQUITY

3 unchanged sentences

The program did not obligate the Company to acquire any specific number of shares or to acquire any shares over any specific period of time.

The timing and amount of any repurchases was dependent upon factors such as the stock price, trading volumes, market conditions, and regulatory requirements.

The timing and amount of any repurchases was dependent upon factors such as the stock price, trading

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

volumes, market conditions, and regulatory requirements.

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

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.

During the three and nine months ended September 30, 2024, the Company repurchased 0.8 million and 2.5 million shares of common stock at an average price of $ 2.36 and $ 2.38 per share, respectively, 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 Company retired 1.7 million and 2.5 million shares of treasury stock under the repurchase program in the three and nine months ended September 30, 2024, respectively.

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.

2 unchanged sentences

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.

2 unchanged sentences

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.

During the three months ended September 30, 2025, the preliminary purchase price allocation was adjusted, resulting in a decrease to intangible assets and an increase to acquired goodwill of $ 0.4 million, which represents the expected value of organic growth and an opportunity for the Company to expand into a new market.

As of September 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.

1 unchanged sentence

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.

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

Consideration

10 unchanged sentences

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.

1 unchanged sentence

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

September 30, 2025

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 $ 470 9.0 years

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 nine months ended September 30, 2025.

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2025

Net sales $ 353 $ 475

Net income $ 63 $ 88

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,

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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

Net sales $ 47,254 $ 50,534 $ 125,194 $ 153,695

Net loss $ ( 2,437 ) $ ( 11,443 ) $ ( 16,323 ) $ ( 26,116 )

12 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 six months ended June 30, 2024.

The remainder of the Note & Option, which were fully reserved, were written off during the nine months ended September 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.

The Company believes that its assessment of contingencies is reasonable and that the related accruals, in the aggregate, are adequate;

however, there can be no assurance that the final resolution of these matters will not have a material effect on the Company's financial condition, results of operations or cash flows.

Indemnifications

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

The Company believes that its assessment of contingencies is reasonable and that

GROWGENERATION CORP.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

the related accruals, in the aggregate, are adequate;

however, there can be no assurance that the final resolution of these matters will not have a material effect on the Company's financial condition, results of operations or cash flows.

Indemnifications

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 September 30, 2025, the Company did not have any liabilities associated with indemnities.

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.

3 unchanged sentences

No such losses have been recorded to date.

RELATED PARTIES

The Company has engaged with a firm that employs an immediate family member of an officer of the Company as partner.

The firm provides certain legal services.

Amounts paid to that firm in total were $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2025, respectively, and were $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2024.

As of September 30, 2025 and December 31, 2024, there was an immaterial amount outstanding due to the firm.

The Company has two operating segments, each its own reportable segment, based on its major lines of business:

6 unchanged sentences

The Company's CODM is the chief executive officer.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

Disaggregated revenue by segment is presented in the following tables:

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

Three Months Ended September 30, Nine Months Ended September 30,

Net sales 2025 2024 2025 2024

7 unchanged sentences

Total $ 47,254 $ 50,006 $ 123,920 $ 151,430

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

Three Months Ended September 30, Nine Months Ended September 30,

Net sales 2025 2024 2025 2024

7 unchanged sentences

Total $ 47,254 $ 50,006 $ 123,920 $ 151,430

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

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

Three Months Ended June 30, 2025

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

Three Months Ended September 30, 2025

Cultivation & Gardening Storage Solutions Corporate Total

20 unchanged sentences

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

Six Months Ended June 30, 2025

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

Nine Months Ended September 30, 2025

Cultivation & Gardening Storage Solutions Corporate Total

20 unchanged sentences

(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

Three Months Ended September 30, 2024

Cultivation & Gardening Storage Solutions Corporate Total

14 unchanged sentences

Depreciation and amortization — — 4,972 4,972

Impairment loss — — 220 220

Total operating expenses 8,718 1,314 12,869 22,901

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

(Loss) income from operations ( 1,548 ) 2,326 ( 12,869 ) ( 12,091 )

Other income — — 613 613

Net income (loss) before income taxes

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

Net (loss) income before income taxes $ ( 1,548 ) $ 2,326 $ ( 12,256 ) $ ( 11,478 )

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

Six Months Ended June 30, 2024

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

Nine Months Ended September 30, 2024

Cultivation & Gardening Storage Solutions Corporate Total

14 unchanged sentences

Depreciation and amortization — — 12,329 12,329

Impairment loss — — 220 220

Total operating expenses 26,906 3,970 34,756 65,632

6 unchanged sentences

The CODM neither reviews nor requests this information.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

RESTRUCTURING

3 unchanged sentences

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.

Overall, the Company incurred aggregate restructuring and restructuring-related costs of $ 3.5 million, of which $ 1.1 million were incurred during the nine months ended September 30, 2025, and $ 2.1 million were incurred during the three and nine months ended September 30, 2024.

GROWGENERATION CORP.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

These costs 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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Cultivation and Gardening segment:

Cost of sales (1)

$ — $ 1,039 $ — $ 1,039

Gross profit — ( 1,039 ) — ( 1,039 )

Store operations and other operational expenses (2)

— 658 765 658

Segment operating loss — ( 1,697 ) ( 765 ) ( 1,697 )

1 unchanged sentence

Selling, general, and administrative (3)

Impairment loss (4)

Other expense (5)

Total restructuring and restructuring-related charges $ — $ ( 2,055 ) $ ( 1,141 ) $ ( 2,055 )

(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

(1) Includes inventory disposal costs

(2) Costs consist primarily of property and equipment disposals, lease contract termination costs and employee termination benefits

(3) Costs consist of corporate operational and administrative contract terminations and employee termination benefits

(4) Consists of asset impairments for operating lease right-of-use assets

(5) Includes non-operating losses related to retail location closures

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.

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.

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

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

4 unchanged sentences

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

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

Balance as of September 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