What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-08 compared with 2024-11-07 · 251 added, 390 removed, 440 unchanged (59% of the section changed)

2 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

2025 December 31,

1 unchanged sentence

Cash and cash equivalents $ 7,201 $ 7,282

Accounts receivable, net of allowances of $ 460 and $ 764 at September 30, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowances of $ 391 and $ 255 at March 31, 2025 and December 31, 2024, respectively

Inventory 37,560 33,488

1 unchanged sentence

Notes receivable, current portion 52 52

Investments, current portion — 88

Due from related parties 302 105

Other current assets 4,007 3,389

3 unchanged sentences

Goodwill 19,482 15,812

Investments, net of current portion — 221

Notes receivable, net of current portion 814 840

17 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

2025 December 31,

4 unchanged sentences

Series B convertible preferred stock, $ 0.001 par value;

4,908,333 shares authorized, issued and outstanding at September 30, 2024 and December 31, 2023

4,908,333 shares authorized, issued and outstanding at March 31, 2025 and December 31, 2024

14,725 14,725

1 unchanged sentence

12,432,432 shares authorized;

1,155,274 shares issued and outstanding at both September 30, 2024 and December 31, 2023

zero and 1,155,274 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Total mezzanine equity 14,725 19,000

2 unchanged sentences

32,659,235 shares authorized;

zero shares issued and outstanding at September 30, 2024 and December 31, 2023

zero shares issued and outstanding at March 31, 2025 and December 31, 2024

Common stock, $ 0.001 par value;

700,000,000 shares authorized;

380,992,386 and 375,126,352 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

388,679,070 and 381,476,581 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 178,172 173,366

6 unchanged sentences

(in thousands, except per share amounts)

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Revenue $ 37,955 $ 37,933

8 unchanged sentences

Total operating expenses 15,989 14,451

Income from operations 1,340 3,292 4,317 11,974

(Loss) income from operations ( 851 ) 2,021

Interest and other (expense) income:

6 unchanged sentences

Net loss ( 5,420 ) ( 1,292 )

Net income (loss) attributable to noncontrolling interests 16 ( 10 ) 34 ( 6 )

Net income attributable to noncontrolling interests 32 6

Net loss attributable to common stockholders $ ( 5,452 ) $ ( 1,298 )

8 unchanged sentences

(in thousands, except share amounts)

Nine months ended September 30, 2024

Common stock Common stock

subscribed but

not issued Additional

Three months ended March 31, 2025

Common stock Additional

capital Accumulated

1 unchanged sentence

stockholders’

Shares Par value Shares Amount

Shares Par value

Balances at January 1, 2025 381,476,581 $ 381 $ 173,366 $ ( 112,119 ) $ ( 1,752 ) $ 59,876

Release of shares under stock grants 1,525,265 2 ( 2 ) — — —

Common stock issued under licensing agreement 3,614 — — — 1 — — 1

Distributions to non-controlling interests — — — — — — ( 46 ) ( 46 )

Stock-based compensation — — — — 244 — — 244

Net (loss) income — — — — — ( 1,298 ) 6 ( 1,292 )

Balances at March 31, 2024 375,465,266 375 — — 171,389 ( 101,253 ) ( 1,690 ) 68,821

Release of shares under stock grants 950,707 1 — — ( 1 ) — — —

Standalone warrants issued as payment for services — — — — 218 — — 218

Shares issued as purchase consideration - business acquisition 3,917,267 4 — — 987 — — 991

Common stock issued under licensing agreement 5,550 — — — 1 — — 1

Distributions to non-controlling interests — — — — — — ( 37 ) ( 37 )

Stock-based compensation — — — — 248 — — 248

Net (loss) income — — — — — ( 1,651 ) 12 ( 1,639 )

Balances at June 30, 2024 380,338,790 380 — — 172,842 ( 102,904 ) ( 1,715 ) 68,603

Release of shares under stock grants 719,462 1 — — ( 1 ) — — —

Shares of newly vested common stock surrendered to the Company to satisfy tax withholding obligations ( 108,161 ) — ( 9 ) — — ( 9 )

Conversion of preferred stock to common stock 5,776,370 6 4,269 — — 4,275

Common stock issued under licensing agreement 9,015 — 1 — — 1

2 unchanged sentences

Net (loss) income — — — ( 5,452 ) 32 ( 5,420 )

Balances at September 30, 2024 380,992,386 $ 381 — $ — $ 173,111 $ ( 103,915 ) $ ( 1,736 ) $ 67,841

Condensed Consolidated Statements of Stockholders’ Equity (continued)

(in thousands, except share amounts)

Nine months ended September 30, 2023

Common stock Common stock

subscribed but

not issued Additional

Balances at March 31, 2025 388,679,070 $ 389 $ 178,172 $ ( 117,571 ) $ ( 1,778 ) $ 59,212

Three months ended March 31, 2024

Common stock Additional

capital Accumulated

1 unchanged sentence

stockholders’

Shares Par value Shares Amount

Shares Par value

Balances at January 1, 2024 375,126,352 $ 375 $ 171,144 $ ( 99,955 ) $ ( 1,650 ) $ 69,914

Common stock subscribed but not issued — — 5,025 2 — — — 2

Issuance of subscribed shares 70,000 — ( 70,000 ) ( 39 ) 39 — — —

Warrants issued in connection with debt — — — — 5,454 — — 5,454

Shares issued as purchase consideration - Ermont Inc.

6,580,390 7 — — 2,987 — — 2,994

Common stock issued under licensing agreement 1,793 — — — 1 — — 1

Distributions to non-controlling interests — — — — — — ( 34 ) ( 34 )

Stock-based compensation — — — — 206 — — 206

Net loss — — — — — ( 645 ) ( 19 ) ( 664 )

Balances at March 31, 2023 348,126,911 348 5,025 2 151,052 ( 84,569 ) ( 1,564 ) 65,269

Issuance of subscribed shares 5,025 — ( 5,025 ) ( 2 ) 2 — — —

Exercise of stock options 157,752 — — — 35 — — 35

Release of shares under stock grants 335,300 — — — — —

Conversion of preferred stock to common stock 21,383,040 21 — — 15,802 — — 15,823

Purchase of minority interests in certain of the Company's subsidiaries 450,000 1 — — 4 — ( 5 ) —

Common stock issued to settle obligations 400,000 — — — 160 — — 160

Common stock issued under licensing agreement 3,614 — 1 — — 1

Common stock issued to purchase property and equipment 740,741 1 — — 299 — — 300

Distributions to non-controlling interests — — — — ( 46 ) ( 46 )

1 unchanged sentence

Net loss (income) — — — ( 1,298 ) 6 ( 1,292 )

Balances at June 30, 2023 371,614,758 372 — $ — 167,652 ( 85,527 ) ( 1,593 ) 80,904

Exercise of stock options 330,000 — — — 74 — — 74

Conversion of preferred stock to common stock 3,921,670 4 — — 2,898 — — 2,902

Common stock issued under licensing agreement 5,530 — — — 2 — — 2

Distributions to non-controlling interests — — — — — — ( 47 ) ( 47 )

Stock-based compensation — — — — 296 — — 296

Net loss — — — — — ( 4,259 ) ( 10 ) ( 4,269 )

Balances at September 30, 2023 375,871,958 $ 376 — $ — $ 170,922 $ ( 89,786 ) $ ( 1,650 ) $ 79,862

Balances at March 31, 2024 375,465,266 $ 375 $ 171,389 $ ( 101,253 ) $ ( 1,690 ) $ 68,821

See accompanying notes to the unaudited condensed consolidated financial statements.

1 unchanged sentence

(in thousands)

Nine months ended

September 30,

Three months ended

Cash flows from operating activities:

Net loss attributable to common stockholders $ ( 5,452 ) $ ( 1,298 )

Net income (loss) attributable to noncontrolling interests 34 ( 6 )

Net income attributable to noncontrolling interests 32 6

Adjustments to reconcile net loss to cash provided by operating activities:

2 unchanged sentences

Stock-based compensation 547 244

Amortization of warrants issued as payment for services received 218 —

Amortization of original debt issuance discount — 206

Amortization of debt discount 105 87

1 unchanged sentence

Payment-in-kind interest 30 14

Bad debt income ( 131 ) ( 127 )

Bad debt expense 1,388 —

Obligations settled with common stock 1 1

(Gain) loss on disposal of assets ( 20 ) 906

Gain on finance lease adjustment — ( 31 )

Write-down of prepaid purchase consideration — 200

Loss (gain) on changes in fair value of investments 145 ( 16 )

Loss on disposal of assets 111 1

Loss on changes in fair value of investments — 121

Changes in operating assets and liabilities:

14 unchanged sentences

Purchases and renewals of cannabis licenses ( 56 ) ( 265 )

Issuance of notes receivable — ( 879 )

Proceeds from notes receivable 26 13

Due from third party — ( 75 )

Net cash used in investing activities ( 115 ) ( 4,266 )

Condensed Consolidated Statements of Cash Flows (continued)

(in thousands)

Nine months ended

September 30,

Return on investment 44 —

Proceeds from disposal of assets 22 —

Due from related party ( 197 ) ( 58 )

Net cash used in investing activities ( 15,933 ) ( 19,637 )

Three months ended

Cash flows from financing activities:

Proceeds from term loan — 29,100

Proceeds from Construction to Permanent Commercial Real Estate Mortgage Loan — 1,047

Proceeds from mortgages — 1,163

Payment of third-party debt issuance costs in connection with debt — ( 1,798 )

Principal payments of term loan — ( 1,500 )

Principal payments of mortgages ( 401 ) ( 65 )

Repayment and retirement of mortgages — ( 778 )

Principal payments of promissory notes ( 478 ) ( 135 )

Repayment and retirement of promissory notes — ( 5,503 )

Proceeds from exercise of stock options — 109

Principal payments of finance leases ( 322 ) ( 320 )

8 unchanged sentences

Non-cash activities:

Common stock issued as purchase consideration $ 991 $ 2,994

Common stock issued to purchase minority interests in certain of the Company's subsidiaries $ — $ 5

Present value of promissory notes issued as purchase consideration $ 3,000 $ 4,569

Warrants to purchase common stock issued with debt $ — $ 5,454

Liability recorded for building improvements $ — $ 1,997

Notes payable issued to purchase property and equipment $ 396 $ 158

Entry into new operating leases $ — $ 5,366

Entry into new finance leases $ 56 $ 513

Write-off of finance leases $ 1,112 $ —

Return of stock to the Company $ 15 $ —

Issuance of common stock associated with subscriptions $ — $ 41

Condensed Consolidated Statements of Cash Flows (continued)

(in thousands)

Nine months ended

September 30,

Conversion of preferred stock to common stock $ 4,275 $ —

Adjustment to purchase price allocation to reclassify certain acquired intangible assets to goodwill $ 3,819 $ —

Return of stock to the Company in connection with withholding taxes $ 9 $ —

See accompanying notes to the unaudited condensed consolidated financial statements.

1 unchanged sentence

(1) BASIS OF PRESENTATION

(“MariMed” or the “Company”) is a multi-state operator in the United States cannabis industry.

MariMed develops, operates, manages and optimizes state-of-the-art, regulatory-compliant facilities for the cultivation, production, and dispensing of medical and adult-use cannabis.

MariMed also licenses its proprietary brands of cannabis along with other top brands in domestic markets.

(“MariMed” or the “Company”) is a multi-state cannabis operator in the United States, headquartered in Norwood, Massachusetts, dedicated to improving lives every day through its high quality-products, its actions, and its values.

The Company develops, owns and manages seed to sale state-licensed, state-of-the-art, regulatory-compliant facilities for the cultivation, production and dispensing of medical and adult-use cannabis.

MariMed has created and continues to develop its own brands of premium cannabis flower, concentrates, edibles and other precision-dosed products utilizing its proprietary strains and formulations.

The Company also licenses its proprietary brands, along with other top cannabis products, in domestic markets.

Basis of Presentation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The Company completed two acquisitions during the nine months ended September 30, 2024 that it accounted for as asset purchases (see Note 2).

On April 9, 2024 (the "Allgreens Acquisition Date"), the Company acquired 100 % of the membership interests of Allgreens Dispensary, LLC ("Allgreens"), which held a conditional adult-use cannabis dispensary license in Illinois.

On April 5, 2024 (the "MedLeaf Acquisition Date"), the Company acquired 100 % of the membership interests of Our Community Wellness & Compassionate Care Center, Inc.

("MedLeaf"), which held a retail dispensary license in Maryland.

The MedLeaf dispensary had been closed since July 1, 2023, but was reopened by the Company on August 19, 2024, upon receiving regulatory approval to commence adult use retail sales.

On March 9, 2023 (the "Ermont Acquisition Date"), the Company acquired the operating assets of Ermont, Inc.

("Ermont"), a medical-licensed vertical cannabis operator located in Quincy, Massachusetts (the "Ermont Acquisition").

The financial results of Ermont are included in the Company's condensed consolidated financial statements since the Ermont Acquisition Date (see Note 2).

Interim results are not necessarily indicative of results for the full fiscal year or any future interim period.

4 unchanged sentences

The Company’s significant accounting policies are disclosed in Note 2 to the Consolidated Financial Statements in the Annual Report.

There were no material changes to the Company's significant accounting policies during the nine-month period ended September 30, 2024.

There were no material changes to the Company's significant accounting policies during the three-month period ended March 31, 2025.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of MariMed and its wholly- and majority-owned subsidiaries.

Intercompany transactions and balances have been eliminated in consolidation.

Consolidation is effected from the date when control is obtained.

All intercompany transactions and balances have been eliminated.

Noncontrolling interests represent third-party minority ownership interests in the Company’s majority-owned consolidated subsidiaries.

3 unchanged sentences

Significant estimates and judgments relied upon in preparing these condensed consolidated financial statements include accounting for business combinations and asset purchases, inventory valuations, assumptions used to determine the fair value of stock-based compensation, and intangible assets and goodwill.

Actual results could differ from those estimates.

The Company regularly assesses these estimates and records change in estimates in the period in which they become known.

The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances.

Actual results could differ from those estimates or assumptions.

Cash and Cash Equivalents

1 unchanged sentence

The fair values of these investments approximate their carrying values.

The Company had $ 0.2 million and $ 0.1 million of cash held in escrow at September 30, 2024 and December 31, 2023, respectively.

The Company had $ 0.2 million and $ 0.3 million of cash held in escrow at March 31, 2025 and December 31, 2024, respectively.

Fair Value of Financial Instruments

8 unchanged sentences

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Bad Debt Expense

The Company recorded $ 1.4 million of bad debt expense in the three months ended March 31, 2025, comprised of $ 1.3 million of expense to fully reserve an amount due from a credit card service provider (the "Service Provider Receivable") and $ 0.1 million of expense to reserve for certain trade receivable accounts.

The Service Provider Receivable was reported in the condensed consolidated balance sheets as a component of Other assets at March 31, 2025 and as a component of Cash at December 31, 2024.

The reserve was reported as a component of Other assets in the condensed consolidated balance sheet at March 31, 2025.

Recent Accounting Pronouncements

2 unchanged sentences

Business Combination

On March 9, 2023, following approval by the Massachusetts Cannabis Control Commission (the "CCC"), the Company acquired the operating assets of Ermont, a medical-licensed vertical cannabis operator located in Quincy, Massachusetts.

The Ermont Acquisition provided the Company with its third dispensary in Massachusetts, substantially completing its build-out to the maximum allowable by state regulations.

As consideration for the Ermont Acquisition, which totaled $ 13.0 million, the Company paid $ 3.0 million of cash, issued 6,580,390 shares of the Company's common stock, and issued a $ 7.0 million promissory note (the "Ermont Note" and collectively, the "Ermont Consideration").

The Ermont Note has a six-year term and bears interest at 6.0 % per annum, with payments of interest-only for two years and thereafter, quarterly payments of principal and interest in arrears.

The outstanding balance on the Ermont Note is subject to prepayment in the event the Company raises $ 75.0 million of equity capital.

The Company recorded the Ermont Note at the present value as of the Ermont Acquisition Date of $ 4.6 million.

The difference between the present value and face value of the Ermont Note is being amortized to interest expense through the term of such note.

The Company rebranded the dispensary as Panacea Wellness Dispensary and commenced medical sales immediately after the Ermont Acquisition Date.

The Ermont Acquisition also includes a Host Community Agreement with the city of Quincy to conduct adult-use cannabis sales.

Adult-use sales commenced on July 23, 2024.

The Company expanded the existing medical dispensary to accommodate expected increased traffic associated with adult-use sales and repurposed Ermont's existing cultivation facility.

The Company's condensed consolidated statement of operations for the three months ended September 30, 2023 included $ 1.2 million of revenue and $ 0.7 million of net loss attributable to Ermont.

The Company's condensed consolidated statement of operations for the nine months ended September 30, 2023 included $ 2.6 million of revenue and $ 1.9 million of net loss attributable to Ermont for the period since the Ermont Acquisition Date.

The Ermont Acquisition has been accounted for as a business combination.

The Company did not assume any of Ermont's liabilities.

The Company recorded adjustments to the amounts allocated to certain identifiable intangible assets and goodwill to reflect more precise forecasts of future revenue streams.

These adjustments resulted in an increase to the tradename and trademarks intangible asset of $ 0.1 million, a decrease to the customer base intangible asset of $ 3.9 million and an increase to goodwill of $ 3.8 million.

A summary of the final allocation of the Ermont Consideration to the acquired and identifiable intangible assets is as follows (in thousands):

First State Compassion Center

On July 1, 2023 (the "Omnibus Agreement Date"), the Company entered into an Omnibus Agreement (the "Omnibus Agreement") with First State Compassion Center ("FSC"):

(a) consolidating all amounts owed by FSC to the Company and its affiliated entities as described below, aggregating $ 11.0 million;

(b) providing for the automatic conversion of all

amounts owed by FSC to the Company, upon the approval of adult cannabis use in Delaware, into 100 % ownership of FSC's licenses and business;

and (c) extending to FSC, in the Company's sole discretion, up to an additional $ 2.0 million of working capital loans.

The Omnibus Agreement had a term of five years , with an automatic five-year extension if adult cannabis was not approved in Delaware by the maturity date, and bore interest, compounded semiannually and payable annually, at the appropriate rate of interest in effect under Sections 1274(d), 482 and 7872 of the Internal Revenue Code of 1986, as amended, as calculated under Rev.

Ruling 86-17, 1986-1 C.B.

377, for the period for which the amount of interest was being determined.

The State of Delaware recently approved the adult use of cannabis, and the acquisition of FSC by the Company (the "FSC Acquisition") was completed effective March 1, 2025 (the "FSC Acquisition Date").

Effective on the FSC Acquisition Date, the amount owed by FSC to the Company was treated as purchase consideration as part of the purchase accounting for FSC (the "FSC Consideration").

This amount was included as a component of Other assets in the condensed consolidated balance sheet at December 31, 2024.

The Company's condensed consolidated statement of operations for the three months ended March 31, 2025 included $ 0.8 million of revenue and $ 0.2 million of net loss attributable to FSC for the period since the FSC Acquisition Date.

The FSC Acquisition has been accounted for as a business combination.

A summary of the preliminary allocation of the FSC Consideration to the acquired and identifiable intangible assets is as follows (in thousands):

Fair value of consideration transferred:

Cash consideration:

Cash paid $ 3,000

Release of FSC obligation to the Company under the Omnibus Agreement $ 11,401

Less cash acquired ( 231 )

Net cash consideration 2,987

Common stock 2,994

Promissory note 4,569

Total fair value of consideration $ 11,170

Fair value of assets acquired and (liabilities assumed):

Current assets, net of cash acquired $ 4,136

Property and equipment 1,568

3 unchanged sentences

Goodwill 3,670

Other assets 48

Current liabilities ( 2,252 )

Fair value of net assets acquired $ 11,170

The Company is amortizing the identifiable intangible assets arising from the Ermont Acquisition in relation to the expected cash flows from the individual intangible assets over their respective useful lives, which have a weighted average life of 12.19 years (see Note 8).

The Company is amortizing the identifiable intangible assets arising from the FSC Acquisition in relation to the expected cash flows from the individual intangible assets over their respective useful lives, which have a weighted average life of 5.80 years (see Note 8).

Goodwill results from assets not separately identifiable as part of the transaction and is not deductible for tax purposes.

The following unaudited pro forma information presents the condensed combined results of MariMed and Ermont for the three and nine months ended September 30, 2023 as if the Ermont Acquisition had been completed on January 1, 2023, with adjustments to give effect to pro forma events that are directly attributable to the Ermont Acquisition.

forma adjustments include amortization expense for the acquired intangible assets and interest expense related to the Ermont Note.

The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings that may result from the consolidation of the operations of MariMed and Ermont.

Accordingly, these unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the combined company that would have been achieved had the Ermont Acquisition occurred on January 1, 2023, nor are they intended to represent or be indicative of future results of operations.

These unaudited pro forma results for the three and nine months ended September 30, 2023 are as follows (in thousands):

Three months ended September 30, 2023 Nine months ended September 30, 2023

The following unaudited pro forma information presents the condensed combined results of MariMed and FSC for the three months ended March 31, 2025 and 2024 as if the FSC Acquisition had been completed on January 1, 2024, with adjustments to give effect to pro forma events that are directly attributable to the FSC Acquisition.

These pro forma adjustments include amortization of acquired intangibles arising from the FSC Acquisition, the reversal of income recognized by MariMed attributable to FSC as its managed client, and the reversal of expense recorded by FSC in connection with its management agreement with MariMed.

The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings that may result from the consolidation of the operations of MariMed and FSC.

Accordingly, these unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results that would have been achieved had the FSC Acquisition occurred on January 1, 2024, nor are they intended to represent or be indicative of future results of operations.

These unaudited pro forma results for the three months ended March 31, 2025 and 2024 are as follows (in thousands):

Three months ended

Revenue $ 39,333 $ 40,908

6 unchanged sentences

Asset Purchases

In August 2022, the Company entered into an agreement to purchase 100 % of the membership interests in Allgreens Dispensary, LLC (the "Allgreens Agreement"), a conditional adult-use cannabis dispensary license in Illinois, for $ 3.25 million, comprised of $ 2.25 million of cash and a promissory note for $ 1.0 million, which note was issued to the Allgreens members on the Allgreens Acquisition Date.

In August 2022, the Company entered into an agreement to purchase 100 % of the membership interests in Allgreens Dispensary, LLC (the "Allgreens Agreement"), the owner of a conditional adult-use cannabis dispensary license in Illinois, for $ 3.25 million, comprised of $ 2.25 million of cash and a promissory note for $ 1.0 million, which note was issued to the Allgreens members (the "Allgreens Notes") upon closing of the transaction on April 9, 2024 (the "the Allgreens Acquisition Date").

Completion of the acquisition was dependent upon certain conditions, including resolution of any remaining legal challenges affecting nearly 200 social equity dispensary licenses, and regulatory approval of the acquisition.

1 unchanged sentence

For the interim period until the acquisition was completed, the Company entered into a management agreement with Allgreens, with the management fees calculated as a percentage of Allgreens' revenue.

Under this management agreement, the Company funded the build-out of the dispensary, including purchasing and retaining ownership of the related fixed assets it intended to use upon the transfer ownership to the Company, hired and trained employees, and implemented the processes necessary to run the dispensary, all of which was completed prior to the state's approval of the license transfer to the Company.

In connection with this agreement, the Company recorded expenses related to Allgreens aggregating approximately $ 250,000 for the period from January 1, 2024 through the Allgreens Acquisition Date as a component of Investments, net of current portion (the "Allgreens Expenses").

Pursuant to the Allgreens Agreement, the Company had made payments aggregating $ 1,375,000 to the Allgreens members prior to the Allgreens Acquisition Date.

On the Allgreens Acquisition Date, the Company made the final cash payment of $ 875,000 and issued a $ 1.0 million promissory note (the "Allgreens Note").

The Allgreens Note bears interest at a rate of 7.5 % per annum and matures one year from the date the dispensary is permitted to commence operations.

Under this management agreement, the Company funded the build-out of the dispensary, including purchasing and retaining ownership of the related fixed assets it intended to use upon the transfer of ownership to the Company, hired and trained employees, and implemented the processes necessary to run the dispensary, all of which was completed prior to the state's approval of the license transfer to the Company.

Pursuant to the Allgreens Agreement, the Company made payments aggregating $ 1,375,000 to the Allgreens members prior to the Allgreens Acquisition Date.

On the Allgreens Acquisition Date, the Company made the final cash payment of $ 875,000 and issued $ 1.0 million of promissory notes (the "Allgreens Notes") to the sellers.

The Allgreens Notes bore interest at a rate of 7.5 % per annum and matured one year from the date the dispensary was permitted to commence operations.

In April 2025, the Company and the former owners of Allgreens agreed to revise the repayment terms of the Allgreens Notes.

Pursuant to that agreement, the Company made a payment of $ 175,000 on April 16, 2025, with additional payments aggregating $ 130,000 , $ 300,000 and $ 400,000 , respectively, every thirty days thereafter.

Upon completion of such payments the Allgreens Notes will be satisfied in full.

The Company has allocated the purchase price, including the Allgreens Expenses, to its licenses intangible asset, with an estimated useful life of 10 years (see Note 8).

2 unchanged sentences

The MedLeaf dispensary had ceased its operations since July 1, 2023.

Upon receiving regulatory approval, the Company reopened the

dispensary and commenced adult-use retail sales on August 19, 2024.

The acquisition of MedLeaf provides the Company with a second dispensary in the state of Maryland.

Pursuant to the MedLeaf Agreement, total purchase consideration was $ 5.25 million, comprised of $ 2.0 million of cash with adjustments to reflect amounts owed to the Company by the sellers of MedLeaf (the "MedLeaf Sellers"), a $ 2.0 million promissory note (the "MedLeaf Note"), and shares of the Company's common stock, valued at $ 1.25 million, with such number of shares calculated using the volume weighted average price based on the ten trading day period ending on the P&S Date.

On April 5, 2024, the Company consummated its acquisition of 100 % of the membership interests in MedLeaf (the "MedLeaf Acquisition Date").

Upon receiving regulatory approval, the Company reopened the dispensary and commenced adult-use retail sales on August 19, 2024.

The acquisition of MedLeaf provided the Company with a second dispensary in the state of Maryland.

$ 2.0 million promissory note (the "MedLeaf Note"), and shares of the Company's common stock, valued at $ 1.25 million, with such number of shares calculated using the volume weighted average price based on the ten trading day period ending on the P&S Date.

The Company made cash payments aggregating $ 0.5 million through the P&S Date, which funds were deposited into escrow.

On the MedLeaf Acquisition Date, the outstanding cash balance was paid and the promissory note and 3.9 million shares of the Company's common stock were issued.

The promissory note bears interest at a rate of 8.0 % per annum and matures on October 5, 2025.

On the MedLeaf Acquisition Date, the outstanding cash balance was paid and the MedLeaf Note and 3.9 million shares of the Company's common stock were issued.

The MedLeaf Note bears interest at a rate of 8.0 % per annum and matures on October 5, 2025.

The Company has allocated the purchase price to its licenses intangible asset, with an estimated useful life of 10 years (see Note 8).

Pending Transaction at September 30, 2024

Pending Transaction at March 31, 2025

Robust Missouri Process and Manufacturing, LLC ("Robust")

8 unchanged sentences

The shares used to compute loss per share were as follows (in thousands):

Three months ended Nine months ended

September 30,

2024 September 30,

2023 September 30,

2024 September 30,

Three months ended

2025 March 31,

Weighted average shares outstanding - basic 382,557 375,211

1 unchanged sentence

Weighted average shares outstanding - diluted 382,557 375,211

(4) DEFERRED RENTS RECEIVABLE

The Company is the lessor under operating leases which contain escalating rents over time, rent holidays, options to renew, and requirements to pay property taxes, insurance and/or maintenance costs.

The Company is not the lessor under any finance leases.

The Company recognizes fixed rental receipts from such lease agreements on a straight-line basis over the expected lease term.

Differences between amounts received and amounts recognized are recorded in Deferred rents receivable in the condensed consolidated balance sheets.

The Company currently leases a cannabis cultivation, processing and dispensary facility that it owns in Delaware to a cannabis-licensed client under a triple net lease that expires in 2035.

The Company had previously leased a portion of an owned property in Massachusetts under a lease that expired in February 2023, after which the tenant continued to rent the space on a month-to-month basis through November 2023.

The Company expanded its cultivation footprint into this space and accordingly, it is currently utilizing this space for its operations.

The Company currently subleases two properties - a cannabis production facility with offices under a sublease that expires in January 2026 and contains an option to negotiate an extension of the sublease term, and a dispensary under a sublease that expires in April 2027.

The Company also subleases a portion of a third property that it developed into a cultivation facility under a sublease that expires in March 2030, with an option to extend the term for three additional five-year periods.

These properties are all subleased to a cannabis-licensed client in Delaware.

The Company received rental payments aggregating $ 0.3 million and $ 0.5 million in the three months ended September 30, 2024 and 2023, respectively, and $ 0.9 million and $ 1.3 million in the nine months ended September 30, 2024 and 2023, respectively.

Revenue from these payments was recognized on a straight-line basis and aggregated $ 0.3 million and $ 0.4 million in the three months ended September 30, 2024 and 2023, respectively, and $ 0.9 million and $ 1.2 million in the nine months ended September 30, 2024 and 2023, respectively.

Future minimum rental receipts for non-cancellable leases and subleases as of September 30, 2024 were as follows (in thousands):

Year ending December 31,

Remainder of 2024 $ 303

Thereafter 2,837

(5) NOTE RECEIVABLE AND OMNIBUS

Note Receivable

At both September 30, 2024 and December 31, 2023, the Company had a note receivable from Healer LLC, an entity that provides cannabis education, dosage programs and products developed by Dr.

Dustin Sulak ("Healer"), of approximately $ 866,000 .

The note bears interest at 6 % per annum and requires quarterly payments of interest through the April 2026 maturity date.

The Company has the right to offset any licensing fees payable by the Company to Healer in the event Healer fails to make any payment when due.

Omnibus Agreement

On July 1, 2023 (the "Omnibus Agreement Date"), the Company entered into an Omnibus Agreement with First State Compassion Center ("FSCC"), the Company's cannabis-licensed client in Delaware:

(a) consolidating all amounts owed by FSCC to the Company and its affiliated entities as described below, aggregating $ 11.0 million (the "Omnibus");

(b) providing for the automatic conversion of all amounts owed by FSCC to the Company, upon the approval of adult cannabis use in Delaware, into 100 % ownership of FSCC's licenses and business;

and (c) extending to FSCC, in the Company's sole discretion, up to an additional $ 2.0 million of working capital loans.

The Omnibus has a term of five years , with an automatic five-year extension if adult cannabis use is not approved in Delaware by the maturity date, and bears interest, compounded semiannually and payable annually, at the appropriate rate of interest in effect under Sections 1274(d), 482 and 7872 of the Internal Revenue Code of 1986, as amended, as calculated under Rev.

Ruling 86-17, 1986-1 C.B.

377, for the period for which the amount of interest is being determined.

The state of Delaware recently approved the adult use of cannabis, with the implementation period expected to extend through approximately November 2024.

The Omnibus is included as a component of Other assets in the condensed consolidated balance sheets at both September 30, 2024 and December 31, 2023.

(4) INVENTORY

Inventory at September 30, 2024 and December 31, 2023 consisted of the following (in thousands):

September 30,

Inventory at March 31, 2025 and December 31, 2024 consisted of the following (in thousands):

2025 December 31,

4 unchanged sentences

$ 37,560 $ 33,488

(5) DEFERRED RENTS RECEIVABLE

Through February 28, 2025, the Company was the lessor under operating leases which contained escalating rents over time, rent holidays, options to renew, and requirements to pay property taxes, insurance and/or maintenance costs.

The Company leased a cannabis cultivation, processing and dispensary facility that it owns in Delaware to FSC under a triple net lease that expired.

The Company also subleased two properties - a cannabis production facility with offices under a sublease that expired in January 2026 and contained an option to negotiate an extension of the sublease term, and a dispensary under a sublease that expired in April 2027.

The Company also subleased a portion of a third property that it developed into a cultivation facility under a sublease that expired in March 2030, with an option to extend the term for three additional five-year periods.

These properties were all subleased to FSC, which the Company acquired on March 1, 2025 (see Note 2).

In connection with the FSC Acquisition, the Company ceased recognizing rental income from these properties.

The Company recognized fixed rental receipts from such lease agreements on a straight-line basis over the expected lease term.

Differences between amounts received and amounts recognized were recorded in Deferred rents receivable in the condensed consolidated balance sheets.

The Company is not the lessor under any finance leases.

The Company received rental payments aggregating $ 0.2 million and $ 0.3 million in the three months ended March 31, 2025 and 2024, respectively.

These payments were recognized as revenue on a straight-line basis and aggregated $ 0.2 million and $ 0.3 million in the three months ended March 31, 2025 and 2024, respectively.

(6) NOTE RECEIVABLE AND OMNIBUS AGREEMENT

Note Receivable

At March 31, 2025 and December 31, 2024, the Company had a note receivable from Healer LLC, an entity that provides cannabis education, dosage programs and products developed by Dr.

Dustin Sulak ("Healer"), of approximately $ 866,000 and $ 892,000 , respectively.

The note bears interest at 6 % per annum and requires quarterly payments of interest through the April 2026 maturity date.

The Company has the right to offset any licensing fees payable by the Company to Healer in the event Healer fails to make any payment when due.

Omnibus Agreement

The amount due under the Omnibus Agreement, which was included as a component of Other assets in the condensed consolidated balance sheet at December 31, 2024, was treated as purchase consideration in connection with the FSC Acquisition (see Note 2).

(7) PROPERTY AND EQUIPMENT, NET

The Company’s property and equipment, net, at September 30, 2024 and December 31, 2023 was comprised of the following (in thousands):

September 30,

The Company’s property and equipment, net, at March 31, 2025 and December 31, 2024 was comprised of the following (in thousands):

2025 December 31,

8 unchanged sentences

Property and equipment, net $ 94,392 $ 94,167

The Company recorded depreciation expense related to property and equipment of $ 1.8 million and $ 1.6 million in the three months ended September 30, 2024 and 2023, respectively, and $ 5.7 million and $ 3.8 million in the nine months ended September 30, 2024 and 2023, respectively.

During the nine months ended September 30, 2024, the Company disposed of equipment and recorded a gain on the disposal of such assets aggregating approximately $ 20,000 , net of insurance proceeds for such disposal of approximately $ 22,000 .

In the first quarter of 2023, the Company disposed of equipment it had previously purchased in connection with its planned acquisition of The Harvest Foundation LLC ("Harvest") in Nevada as a result of the Company's withdrawal from the agreement to purchase Harvest.

The Company recorded a loss on the disposal of assets aggregating $ 0.9 million, which is included as a component of Other expense, net, in the condensed consolidated statement of operations for the nine months ended September 30, 2023.

The Company recorded depreciation expense related to property and equipment of $ 1.8 million and $ 1.9 million in the three months ended March 31, 2025 and 2024, respectively.

During the three months ended March 31, 2025, the Company wrote off property and equipment with an original cost aggregating $ 1.3 million, the majority of which was fully depreciated.

The Company recognized a loss on these write-offs of $ 0.1 million.

(8) INTANGIBLE ASSETS AND GOODWILL

The Company’s acquired intangible assets at September 30, 2024 and December 31, 2023 consisted of the following (in thousands):

September 30, 2024 Weighted

The Company’s acquired intangible assets at March 31, 2025 and December 31, 2024 consisted of the following (in thousands):

March 31, 2025 Weighted

period (years) Cost Accumulated

11 unchanged sentences

7.89 $ 25,754 $ 7,115 $ 18,639

Estimated future amortization expense for the Company’s intangible assets at September 30, 2024 was as follows:

Estimated future amortization expense for the Company’s intangible assets at March 31, 2025 was as follows:

Year ending December 31,

2 unchanged sentences

Total $ 21,690

The changes in the carrying value of the Company’s goodwill in the nine months ended September 30, 2024 and 2023 were as follows (in thousands):

The changes in the carrying value of the Company’s goodwill in the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Balance at January 1, $ 15,812 $ 11,993

Ermont Acquisition 3,819 3,914

Balance at September 30, $ 15,812 $ 11,993

In connection with the finalization of the purchase price allocation for the Ermont Acquisition in the first quarter of 2024, the Company recorded reclassifications between its Tradename and trademarks intangible asset, Licenses and customer base intangible asset, and Goodwill (see Note 2).

Term Loan (the "CA Term Loan")

On January 24, 2023, the Company entered into a Loan and Security Agreement, by and among the Company, subsidiaries of the Company from time-to-time party thereto (collectively with the Company, the “CA Borrowers”), lenders from time-to-time party thereto (the “CA Lenders”), and Chicago Atlantic Admin, LLC (“Chicago Atlantic”), as administrative agent for the Lenders (the "CA Credit Agreement").

Proceeds from the CA Credit Agreement were designated to complete the build-out of a new cultivation and processing facility in Illinois, complete the build-out of a new processing kitchen in Missouri, expand existing cultivation and processing facilities in Massachusetts and Maryland, fund certain capital

expenditures, and repay in full the notes payable issued in 2022 in connection with the acquisition of Kind Therapeutics USA, which repayment occurred on January 24, 2023.

The remaining balance, if any, was expected to be used to fund acquisitions.

The CA Credit Agreement allowed for $ 35.0 million in principal borrowings at the CA Borrowers’ option in the aggregate and further provides the CA Borrowers with the right, subject to customary conditions, to request an additional incremental term loan in the aggregate principal amount of up to $ 30.0 million, provided that the CA Lenders elected to fund such incremental term loan.

$ 30.0 million of loan principal was funded at the initial closing (the "CA Term Loan"), which amount was reduced by an original issuance discount of $ 0.9 million (the "CA Original Issuance Discount").

The Company had the option, during the six-month period following the initial closing, to draw down an additional $ 5.0 million, which it did not elect to do.

The loan required scheduled amortization payments of 1.0 % of the principal amount outstanding under the CA Credit Agreement per month commencing in May 2023, and the remaining principal balance was due in full on January 24, 2026, subject to extension to January 24, 2028 under certain circumstances.

The CA Credit Agreement provided the CA Borrowers with the right, subject to specified limitations, to incur (a) seller- provided debt in connection with future acquisitions, (b) additional mortgage financing from third-party lenders secured by real estate currently owned and acquired after the closing date, and (c) additional debt in connection with equipment leasing transactions.

The obligations under the CA Credit Agreement were secured by substantially all of the assets of the CA Borrowers, excluding specified parcels of real estate and other customary exclusions.

The CA Credit Agreement provided for a floating annual interest rate equal to the prime rate then in effect plus 5.75 %, which rate could be increased by 3.00 % upon an event of default or 7.50 % upon a material event of default as provided in the CA Credit Agreement.

At any time, the Company could voluntarily prepay amounts due under the facility in $ 5.0 million increments, subject to a three -percent prepayment premium and, during the first 20 -months of the term, a “make-whole” payment.

The CA Credit Agreement included customary representations and warranties and customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to material indebtedness, and events of bankruptcy and insolvency.

The CA Credit Agreement also included customary negative covenants limiting the CA Borrowers’ ability to incur additional indebtedness and grant liens that were otherwise not permitted, among others.

Additionally, the Credit Agreement required the CA Borrowers to meet certain financial tests.

The Company was in compliance with the CA Credit Agreement covenants throughout the term of the CA Credit Agreement.

The CA Credit Agreement provided for 30 % warrant coverage against amounts funded under the facility, priced at a 20 % premium to the trailing 20 -day average price on the closing date of each such funding.

At the initial closing, upon funding of the initial $ 30.0 million under the facility, the Company issued to the CA Lenders an aggregate of 19,148,936 warrants to purchase shares of the Company’s common stock at $ 0.47 per share, exercisable for a five-year period following issuance.

The Company recorded the warrants at present value of $ 5.5 million as a component of Additional paid-in capital on the condensed consolidated balance sheet as of January 24, 2023, and discounted the CA Term Loan by $ 5.5 million (the "CA Warrant Discount").

The CA Warrant Discount was being amortized to interest expense over the term of the Credit Agreement.

The Company incurred $ 1.8 million of third party costs (i.e., legal fees, referral fees, etc.) in connection with the CA Term Loan, which were recorded as a discount to the CA Term Loan (the "CA Third-Party Costs Discount"), which was being amortized to interest expense over the term of the CA Credit Agreement.

The Company recorded $ 0.3 million of aggregate interest amortization for the three months ended March 31, 2023 related to the CA Original Issuance Discount, CA Warrant Discount and CA Third-Party Costs Discount.

On November 16, 2023, the Company repaid and retired the CA Term Loan (the "CA Term Loan Payoff") using proceeds from a new $ 58.7 million loan entered into on the same date (see "CREM Loan" below).

The CA Term Loan Payoff amount totaled $ 32.7 million, comprised of $ 28.5 million for the outstanding principal, $ 3.7 million for the make-whole payment, $ 0.2 million for accrued unpaid interest and $ 0.3 million for transaction-related fees.

The Company recognized a loss of $ 10.2 million in connection with the Term Loan Payoff, which it recorded in the fourth quarter of 2023.

FSC Acquisition 3,670 —

Adjustments to Ermont purchase price allocation* — 3,819

Balance at March 31, $ 19,482 $ 15,812

* In connection with the finalization of the purchase price allocation in the first quarter of 2024 related to the 2023 acquisition of Ermont, Inc., the Company recorded reclassifications between its Tradename and trademarks intangible asset, Licenses and customer base intangible asset, and Goodwill.

Mortgages and Notes Payable

The Company’s mortgages and notes payable are reported in the aggregate on the condensed consolidated balance sheets under the captions Mortgages and notes payable, current portion, and Mortgages and notes payable, net of current portion.

The Company’s mortgage and notes payable balances at September 30, 2024 and December 31, 2023 were comprised of the following (in thousands):

September 30,

The Company’s mortgage and notes payable balances at March 31, 2025 and December 31, 2024 were comprised of the following (in thousands):

2025 December 31,

Construction to Permanent Commercial Real Estate Mortgage Loan ("CREM Loan") $ 57,217 $ 52,083

Construction to Permanent Commercial Real Estate Mortgage Loan ("CREM Loan"), net of debt discount of $ 1,442 and $ 1,460 at March 31, 2025 and December 31, 2024, respectively

$ 56,853 $ 57,136

Bank of New England - Wilmington, DE property 1,052 1,086

1 unchanged sentence

DuQuoin State Bank - Metropolis, IL property 2,395 2,427

Du Quoin State Bank - Mt.

Vernon, IL property (grow and production) 2,887 2,923

DuQuoin State Bank - Mt.

Vernon, IL property (retail) 1,129 1,139

Promissory note issued as purchase consideration - Ermont Acquisition 2,856 2,591

Promissory note issued as purchase consideration - Greenhouse Naturals Acquisition 3,900 4,190

Du Quoin State Bank - Mt.

Vernon, IL property (grow and production) 2,854 2,872

Promissory note issued as purchase consideration - Ermont Acquisition, net of debt discount of $ 1,710 and $ 1,801 at March 31, 2025 and December 31, 2024, respectively

Promissory note issued as purchase consideration - Greenhouse Naturals Acquisition, net of debt discount of $ 552 and $ 567 at March 31, 2025 and December 31, 2024, respectively

Promissory notes issued as purchase consideration - MedLeaf Acquisition 1,013 1,377

10 unchanged sentences

The interest rate will reset after five years to the FHLB Rate (the Classic Advance Rate for Fixed Rate advances for a period of five years for an amount greater than or equal to the loan amount, as such rate is defined and published by the Federal Home Loan Bank of Boston), plus 3.50 %.

The Company will make interest-only payments for the first twelve months of the term of the loan, with payments thereafter based upon a twenty-year amortization schedule.

The CREM Lender initially released $ 52.8 million to the CREM Borrowers (the "Initial CREM Distribution"), with the remaining proceeds of $ 5.9 million placed into escrow to complete the expansion of the Company's Hagerstown, Maryland cultivation facility (the "Hagerstown Facility"), with any unused proceeds to be released to the Company after completion of the Hagerstown Facility expansion.

The Company made interest-only payments for the first twelve months of the term of the loan, with payments thereafter based upon a twenty-year amortization schedule.

of the Hagerstown Facility expansion.

The Company used $ 46.8 million of the Initial CREM Distribution to fully repay certain of its outstanding debt obligations.

These payments were comprised of $ 32.7 million to pay off the Term Loan, $ 11.9 million to pay off the mortgage with Bank of New England for the New Bedford, MA and Middleborough, MA properties, and $ 2.2 million to reduce the outstanding balance of the note issued by the Company in connection with the Ermont Acquisition.

Discount"), and which are being amortized to interest expense over the term of the CREM Loan Transaction.

The Company recorded approximately $ 18,000 and $ 55,000 of interest amortization in the three and nine months ended September 30, 2024, respectively, related to the CREM Closing Costs Discount.

These payments were comprised of $ 32.7 million to pay off its previous term loan administered by Chicago Atlantic Admin, LLC, $ 11.9 million to pay off the mortgage with Bank of New England for the New Bedford, MA and Middleborough, MA properties, and $ 2.2 million to reduce the outstanding balance of the note issued by the Company in connection with the Ermont Acquisition.

The Company incurred bank closing costs and third party costs (i.e., legal fees, etc.) aggregating $ 1.5 million in connection with the CREM Loan Transaction, which were recorded as a discount to the Loan Transaction (the "CREM Closing Costs Discount"), and which are being amortized to interest expense over the term of the CREM Loan Transaction.

The Company recorded approximately $ 18,000 of interest amortization in each of the three months ended March 31, 2025 and 2024 related to the CREM Closing Costs Discount.

The CREM Loan Agreement includes customary representations and warranties and customary events of default, including, without limitation, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults to material indebtedness, and events of bankruptcy and insolvency.

1 unchanged sentence

The CREM Loan Agreement also requires the CREM Borrowers to meet certain periodic financial tests.

During the nine months ended September 30, 2024, $ 5.1 million of the escrowed portion of the loan proceeds was released to the Company, and the Company made interest-only payments to the CREM Lender aggregating $ 4.0 million.

The current portion of the outstanding principal balance of the CREM Loan was $ 1.0 million at September 30, 2024.

Bank of New England (New Bedford, MA and Middleborough, MA)

The Company maintained an amended and restated mortgage secured by the Company's properties in New Bedford, MA and Middleborough MA in the original amount of $ 13.0 million and bearing interest of 6.5 % per annum that would mature in August 2025 (the “Refinanced Mortgage”).

On November 16, 2023, the Company used $ 11.9 million of proceeds from the CREM Loan Transaction to pay the outstanding principal of the Refinanced Mortgage, and such mortgage was retired.

The Company recorded a loss of $ 0.2 million on the early repayment of the Refinanced Mortgage, which it recorded in the fourth quarter of 2023.

Concurrent with the repayment of the Refinanced Mortgage, the Company refinanced the properties through the CREM Loan and accordingly, effective November 16, 2023, the mortgage on these properties is held by Needham Bank, which mortgage matures in 2033 and which outstanding amount is included as a component of the CREM Loan outstanding balance.

During the three months ended March 31, 2025, the Company made payments aggregating $ 1.5 million, comprised of $ 0.3 million of principal and $ 1.2 million of interest.

During the three months ended March 31, 2024, the Company received $ 1.0 million of the amount previously held back by the CREM Lender and made interest-only payments aggregating $ 1.2 million.

The current portion of the outstanding principal balance of the CREM Loan was $ 1.2 million at each of March 31, 2025 and December 31, 2024, respectively.

Bank of New England (Wilmington, DE)

The Company maintains a mortgage with Bank of New England for the 2016 purchase of a building in Wilmington, DE, which was developed into a cannabis seed to sale facility that is currently leased to the Company's cannabis-licensed client in that state.

The Company maintains a mortgage with Bank of New England in connection with the 2016 purchase of a building in Wilmington, DE, which was developed into a cannabis seed to sale facility.

The mortgage matures in 2031, with monthly principal and interest payments at a rate of 5.25 % per annum, with the rate adjusting every five years to the then- prime rate plus 1.5 % with a floor of 5.25 % per annum.

The next interest rate adjustment will occur in September 2026.

The current portions of the outstanding principal balance under this mortgage at September 30, 2024 and December 31, 2023 were approximately $ 138,000 and $ 133,000 , respectively.

The current portion of the outstanding principal balance under this mortgage at March 31, 2025 and December 31, 2024 was approximately $ 142,000 and $ 140,000 , respectively.

DuQuoin State Bank (Anna, IL and Harrisburg, IL)

2 unchanged sentences

The mortgage was renewed in May 2024 at a rate of 9.5 % per annum.

The current portions of the outstanding principal balance under this mortgage at September 30, 2024 and December 31, 2023 were approximately $ 26,000 and $ 27,000 , respectively.

The current portions of the outstanding principal balance under this mortgage at each of March 31, 2025 and December 31, 2024 was approximately $ 27,000 .

DuQuoin State Bank (Metropolis, IL)

In July 2021, the Company purchased the land and building in which it operates its cannabis dispensary in Metropolis, Illinois.

In connection with this purchase, the Company entered into a mortgage agreement with DSB in the amount of $ 2.7 million that matures in July 2041, and which currently bears interest at a rate of 11.25 % per annum, which rate is adjusted each year based on a certain interest rate index plus a margin.

In connection with this purchase, the Company entered into a loan and mortgage agreement with DSB in the amount of $ 2.7 million that matures in July 2041, and which currently bears interest at a rate of 11.25 % per annum, which rate is adjusted each year based on a certain interest rate index plus a margin.

As part of this transaction, the seller was provided with a 30.0 % ownership interest in Mari Holdings Metropolis LLC (“Metro”), the Company’s subsidiary that owns the property and holds the related mortgage obligation, reducing the Company’s ownership interest in Metro to 70.0 %.

The current portions of the outstanding principal balance of this mortgage at September 30, 2024 and December 31, 2023 were approximately $ 55,000 and $ 46,000 , respectively.

The current portion of the outstanding principal balance of this mortgage at March 31, 2025 and December 31, 2024 was approximately $ 59,000 and $ 56,000 , respectively.

DuQuoin State Bank (Mt.

In July 2022, Mari Holdings Mt Vernon LLC, a wholly owned subsidiary of the Company, entered into a $ 3.0 million loan agreement and mortgage with DSB secured by property owned by the Company in Mt.

Vernon, Illinois, which it is developing into a grow and production facility.

Vernon, Illinois, which it is

developing into a grow and production facility.

The mortgage has a 20 -year term and currently bears interest at the rate of 11.25 % per annum, subject to upward adjustment on each annual anniversary date to the Wall Street Journal U.S.

Prime Rate (with an interest rate floor of 7.75 %).

The proceeds of this loan are being utilized for the build-out of the property and other working capital needs.

The current portions of the outstanding principal balance of this mortgage were approximately $ 59,000 and $ 48,000 at September 30, 2024 and December 31, 2023, respectively.

The proceeds of the loan were utilized for the build-out of the property and for working capital purposes.

The current portion of the outstanding principal balance of this mortgage was approximately $ 64,000 and $ 61,000 at March 31, 2025 and December 31, 2024, respectively.

DuQuoin State Bank (Mt.

In February 2020, the Company entered into a mortgage agreement with South Porte Bank for the purchase and development of a property in Mt.

In February 2020, the Company entered into a loan and mortgage agreement with South Porte Bank for the purchase and development of a property in Mt.

Vernon, Illinois.

1 unchanged sentence

On May 26, 2023, the Company repaid the outstanding balance on this mortgage, which totaled approximately $ 778,000 .

In January 2024, the Company refinanced this property and entered into a $ 1.2 million mortgage with DSB.

The mortgage with DSB has a 17-year term and bears interest of 9.50 % per annum.

The current portion of the outstanding principal balance of this mortgage was approximately $ 31,000 at September 30, 2024.

In January 2024, the Company refinanced this property and entered into a $ 1.2 million loan and mortgage with agreement DSB.

The mortgage with DSB has a 17-year term and bears interest at a rate of 9.50 % per annum.

The current portion of the outstanding principal balance of this mortgage was approximately $ 32,000 and $ 31,000 at March 31, 2025 and December 31, 2024, respectively.

Promissory Notes

1 unchanged sentence

In connection with the Ermont Acquisition, the Company issued the Ermont Note (see Note 2), totaling $ 7.0 million.

The Ermont Note matures in March 2029, and bears interest at 6.0 % per annum, with payments of interest-only for two years , and quarterly payments of principal and interest in arrears thereafter.

The Ermont Note matures in March 2029, and bears interest at a rate of 6.0 % per annum, with payments of interest-only for two years , and quarterly payments of principal and interest in arrears thereafter.

The outstanding balance on the Ermont Note is subject to prepayment in full in the event the Company raises $ 75.0 million or more of equity capital.

3 unchanged sentences

The difference between the face value of the Ermont Note and the present value recorded at the time of the Ermont Acquisition is being amortized to interest expense over the term of the Ermont Note.

The fair value of the Ermont Note was $ 2.9 million and $ 2.6 million at September 30, 2024 and December 31, 2023, respectively.

The current portion of the outstanding principal balance of the Ermont Note was $ 0.3 million at September 30, 2024.

The Ermont Note did no t have a current portion recorded at December 31, 2023.

The fair value of the Ermont Note was $ 3.0 million and $ 2.9 million at March 31, 2025 and December 31, 2024, respectively.

The current portion of the outstanding principal balance of the Ermont Note was $ 0.6 million and $ 0.5 million at March 31, 2025 and December 31, 2024, respectively.

Greenhouse Naturals LLC

2 unchanged sentences

The Company recorded $ 0.7 million as a debt discount, which is being accreted to interest expense through the term of the Greenhouse Naturals Note, which matures in July 2026.

In the third quarter of 2023, the Company updated its forecast of revenue attributable to the Beverly Dispensary and, accordingly, adjusted the schedule of estimated future payments on the Greenhouse Naturals Note.

The fair value of the Greenhouse Naturals Note was $ 3.9 million and $ 4.2 million at September 30, 2024 and December 31, 2023, respectively.

The Company estimated that the current portion of the Greenhouse Naturals Note was $ 0.4 million and $ 0.3 million at September 30, 2024 and December 31, 2023, respectively.

The fair value of the Greenhouse Naturals Note was $ 3.7 million and $ 3.8 million at March 31, 2025 and December 31, 2024, respectively.

The Company estimated that the current portion of the Greenhouse Naturals Note was $ 0.6 million and $ 0.8 million at March 31, 2025 and December 31, 2024, respectively.

In connection with the MedLeaf Acquisition, the Company issued the MedLeaf Note, totaling $ 2.0 million (See Note 2).

The MedLeaf Note bears interest at a rate of 8.0 % per annum and matures on October 5, 2025.

The MedLeaf Note calls for

six equal principal payments, paid quarterly, which payments began on July 5, 2024.

At September 30, 2024, the current portion of the MedLeaf Note was $ 1.3 million.

The MedLeaf Note calls for six equal principal payments, paid quarterly, which payments began on July 5, 2024.

At March 31, 2025 and December 31, 2024, the MedLeaf Note had an outstanding balance of $ 1.0 million and $ 1.4 million, respectively, all of which was recorded as current.

In connection with the Allgreens Acquisition, the Company issued promissory notes aggregating $ 1.0 million (See Note 2).

The Allgreens Notes bear interest at a rate of 7.5 % per annum and will mature one year from the date that the dispensary is permitted to commence operations.

The Allgreens Notes had an aggregate outstanding balance of $ 1.0 million at September 30, 2024, all of which was recorded as current.

Kind Acquisition

In connection with the 2022 acquisition of Kind Therapeutics USA ("Kind"), the Company issued four-year promissory notes aggregating $ 6.5 million with an interest rate of 6.0 % per annum to the members of Kind (the “Kind Notes”).

In connection with the CA Credit Agreement (described above), on January 24, 2023, the Company repaid the Kind Notes in full, aggregating $ 5.4 million, including approximately $ 420,000 of accrued interest.

There was no penalty in connection with the early repayment of the Kind Notes.

The Allgreens Notes had an aggregate outstanding balance of $ 1.0 million at each of March 31, 2025 and December 31, 2024, all of which was recorded as current and was in default.

In April 2025, the Company and the former owners of Allgreens agreed to revise the repayment terms of the Allgreens Notes.

Upon completion of such payments the Allgreens Notes will be satisfied in full.

Promissory Notes Issued to Purchase Property and Equipment

The Company had five outstanding promissory notes in connection with the purchase of commercial motor vehicles at both September 30, 2024 and December 31, 2023.

At September 30, 2024, the outstanding notes had an aggregate outstanding balance of approximately $ 177,000 , of which approximately $ 35,000 was current.

The Company had five outstanding promissory notes in connection with the purchase of commercial motor vehicles at both March 31, 2025 and December 31, 2024.

At March 31, 2025, the outstanding notes had an aggregate outstanding balance of approximately $ 160,000 , of which approximately $ 37,000 was current.

At December 31, 2024, the outstanding notes had an aggregate outstanding balance of approximately $ 168,000 , of which approximately $ 36,000 was current.

The weighted average interest rates of the outstanding balances were 11.33 % and 11.07 % at September 30, 2024 and December 31, 2023, respectively.

The weighted average remaining terms of these notes were 4.50 years and 4.61 years at September 30, 2024 and December 31, 2023, respectively.

The weighted average interest rates of the outstanding balances were 11.43 % and 11.38 % at March 31, 2025 and December 31, 2024, respectively.

The weighted average remaining terms of these notes were 4.05 years and 4.27 years at March 31, 2025 and December 31, 2024, respectively.

The Company had an outstanding note in connection with the purchase, in the second quarter of 2024, of a parking lot adjacent to its Middleborough, MA dispensary totaling $ 352,000 (the "Middleborough Note").

The note bears interest at 4.0 %, with monthly interest-only payments and a balloon payment for the entire principal amount due on February 1, 2029.

The note bears interest at a rate of 4.0 % per annum, with monthly interest-only payments and a balloon payment for the entire principal amount due on February 1, 2029.

Future Payments

The future principal amounts due under the Company outstanding mortgages and notes payable at September 30, 2024 were as follows (in thousands):

The future principal amounts due under the Company outstanding mortgages and notes payable at March 31, 2025 were as follows (in thousands):

Year ending December 31,

6 unchanged sentences

Series B Convertible Preferred Stock

The Company had 4,908,333 shares of Series B Convertible Preferred Stock (the "Series B Stock") outstanding at both September 30, 2024 and December 31, 2023, which shares are held by three institutional shareholders.

The holders of Series B Stock (the “Series B Holders”) are entitled to cast a number of votes equal to the number of shares of the Company's common stock into which the shares of Series B Stock are convertible, together with the holders of the

Company's common stock as a single class, on most matters.

The Company had 4,908,333 shares of Series B Convertible Preferred Stock (the "Series B Stock") outstanding at both March 31, 2025 and December 31, 2024, which shares are held by three institutional shareholders.

However, the affirmative vote or consent of the Series B Holders voting separately as a class is required for certain acts taken by the Company, including an amendment or repeal of certain charter provisions, liquidation or winding up of the Company, creation of stock senior to the Series B Stock, and/or other acts defined in the certificate of designation.

13 unchanged sentences

Series C Convertible Preferred Stock

The Company's Series C Convertible Preferred Stock (the "Series C Stock") is held by Hadron Healthcare Master Fund (“Hadron”).

In 2021, the Company issued to Hadron 6,216,216 shares of Series C Stock and warrants to purchase up to an aggregate of 15,540,540 shares of its common stock in connection with a financing facility between the Company and Hadron.

Each share of Series C Stock is convertible, at Hadron’s option, into five shares of the Company's common stock, and each warrant is exercisable at an exercise price of $ 1.087 per share.

The warrants are subject to early termination if

certain milestones are achieved and the market value of the Company’s common stock reaches certain predetermined levels.

The Series C Stock is zero coupon, non-voting, and has a liquidation preference equal to its original issuance price plus declared but unpaid dividends.

Holders of Series C Stock are entitled to receive dividends on an as-converted basis.

During the year ended December 31, 2023, the Company converted, at Hadron's request in accordance with the terms and conditions of the Series C Stock certificate of designation, a total of 5,060,942 shares of Series C Stock into 25,304,710 shares of the Company's common stock (the "Conversions), comprised of 784,334 shares of Series C Stock converted into 3,921,670 shares of the Company's common stock in the third quarter of 2023 and 4,276,608 shares of Series C Stock converted into 21,383,040 shares of the Company's common stock in the second quarter of 2023.

The Conversions were effected at a conversion rate of five shares of the Company's common stock for each share of Series C Stock converted.

The Company did not recognize a gain or loss on the Conversions as they were effected in accordance with the Series C Stock certificate of designation.

At both September 30, 2024 and December 31, 2023, 1,155,274 shares of Series C Stock remained outstanding.

In 2021, the Company issued to Hadron Healthcare Master Fund ("Hadron") 6,216,216 shares of Series C Convertible Preferred Stock (the "Series C Stock") and warrants to purchase up to an aggregate of 15,540,540 shares of its common stock in connection with a financing facility between the Company and Hadron.

Each share of Series C Stock was convertible, at Hadron’s option, into five shares of the Company's common stock, and each warrant is exercisable at an exercise price of $ 1.087 per share.

The warrants are subject to early termination if certain milestones are achieved and the market value of the Company’s common stock reaches certain predetermined levels.

The Series C Stock was zero coupon, non-voting, and had a liquidation preference equal to its original issuance price plus declared but unpaid dividends.

Holders of Series C Stock were entitled to receive dividends on an as-converted basis.

During the three months ended March 31, 2025, the Company converted, at Hadron's request in accordance with the terms and conditions of the Series C Stock certificate of designation, a total of 1,155,274 shares of Series C Stock into 5,776,370 shares of the Company's common stock (the "Conversion").

The Conversion was effected at a conversion rate of five shares of the Company's common stock for each share of Series C Stock converted.

The Company did not recognize a gain or loss on the Conversion as it was effected in accordance with the Series C Stock certificate of designation.

As a result of the Conversion, no shares of Series C Stock remained outstanding at March 31, 2025.

The Company had 1,155,274 shares of Series C Stock outstanding at December 31, 2024.

(11) STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

2 unchanged sentences

Awards can be granted under the Plan to the Company’s employees, officers and non-employee directors, as well as consultants and advisors of the Company and its subsidiaries.

On June 8, 2023, the Company's Board of Directors approved an amendment to the Plan to modify the one-year minimum vesting requirements.

Stock Options

A summary of the Company's stock option activity during the nine months ended September 30, 2024 is below:

A summary of stock option activity during the three months ended March 31, 2025 is below:

Shares Weighted average exercise price

Outstanding at January 1, 2025 34,271,921 $ 0.79

Granted 60,000 $ 0.14

Exercised — $ —

Forfeited ( 3,750 ) $ 0.44

Expired ( 2,021,000 ) $ 0.56

Outstanding at September 30, 2024 35,249,421 $ 0.78

Outstanding at March 31, 2025 32,250,921 $ 0.80

Stock options granted under the Plan generally expire five years from the date of grant.

At September 30, 2024, the stock options outstanding had a weighted average remaining life of approximately two years .

The grant date fair value of the stock options granted in the nine months ended September 30, 2024 was estimated using the Black-Scholes valuation model with the following assumptions:

Estimated life (in years) 1.18

Weighted average volatility 64.81 %

Weighted average risk-free interest rate 5.12 %

Dividend yield —

At March 31, 2025, the stock options outstanding had a weighted average remaining life of approximately one year .

The Company did not grant any stock options during the three months ended March 31, 2025.

Restricted Stock Units

2 unchanged sentences

The fair value of RSUs is determined based on the market value of the shares of the Company's common stock on the date of grant.

The activity related to the Company's RSUs for the nine months ended September 30, 2024 was as follows:

A summary of RSU activity for the three months ended March 31, 2025 was as follows:

RSUs Weighted average grant date fair value

Unvested at January 1, 2024 5,825,538 $ 0.42

Outstanding at January 1, 2025 7,706,125 $ 0.27

Granted 4,783,954 $ 0.12

1 unchanged sentence

Forfeited ( 401,187 ) $ 0.21

Outstanding at September 30, 2024 6,736,422 $ 0.31

Outstanding at March 31, 2025 10,563,627 $ 0.21

Of the 1,525,265 RSUs reported as vested in the table above, 108,161 shares, with an aggregate fair value of approximately $ 9,000 , were surrendered to the Company to satisfy the tax withholding obligations that arose in connection with the vesting of such RSUs.

On May 2, 2024, the Company issued warrants to purchase 1,000,000 shares of the Company's common stock to an entity in consideration for introductory and other services rendered in connection with certain funding and acquisition transactions.

The warrants have an exercise price of $ 0.32 per share, vested immediately, and expire on May 1, 2029.

The Company calculated that the grant date fair value of the warrants was approximately $ 218,000 in the aggregate using the Black-Scholes valuation model.

This expense is included as a component of Acquisition-related and other in the Company's condensed consolidated statements of operations for the nine months ended September 30, 2024.

At September 30, 2024, warrants to purchase up to 43,089,476 shares of the Company's common stock were outstanding, with a weighted average exercise price of $ 0.67 .

At March 31, 2025, warrants to purchase up to 22,548,936 shares of the Company's common stock were outstanding, with

a weighted average exercise price of $ 0.48 .

Other Common Stock Issuances

In addition to the activity related to stock options and RSUs, described above, during the nine months ended September 30, 2024, the Company also issued 3,917,267 shares of restricted common stock as purchase consideration (see Note 2) with a grant date fair value of approximately $ 1 million, and 28,369 shares of restricted common stock with an aggregate fair value of approximately $ 7,000 , under a royalty agreement.

In addition to the activity related to stock options, RSUs and the conversion of the Company's outstanding Series C stock to common stock as described above, during the three months ended March 31, 2025, the Company also issued 9,015 shares of restricted common stock with an aggregate fair value of approximately $ 900 , under a royalty agreement.

Stock-Based Compensation

The Company recorded stock-based compensation of $ 0.3 million in each of the three months ended September 30, 2024 and 2023, and $ 0.8 million in each of the nine months ended September 30, 2024 and 2023.

The Company recorded stock-based compensation of $ 0.5 million and $ 0.2 million in the three months ended March 31, 2025 and 2024, respectively.

(12) SEGMENT INFORMATION

The Company operates as a single reporting segment engaged in the cultivation, processing and sale of branded cannabis products.

The Chief Operating Decision Makers are the Company's Chief Executive Officer and its Chief Financial Officer, who together (the "CODM"), evaluate company performance based on Net income (loss), determined in accordance with U.S.

GAAP, and Adjusted EBITDA, a non-GAAP measure.

The Company defines Adjusted EBITDA as income from operations, determined in accordance with GAAP, excluding the following:

• depreciation and amortization of property and equipment;

• amortization of acquired intangible assets;

• impairments or write-downs of acquired intangible assets;

• inventory revaluation;

• stock-based compensation;

• legal settlements;

• acquisition-related and other.

The CODM uses these measures to assess profitability and guide resource allocations, and believes that Adjusted EBITDA, when reviewed in conjunction with Net income (loss), is a useful measure to assess the Company's performance and liquidity, as it provides meaningful operating results by excluding the effects of expenses that are not reflective of the Company's operating business performance.

In addition, the CODM uses Adjusted EBITDA to understand and compare operating results across accounting periods, and for financial and operational decision-making and resource allocation.

The presentation of Adjusted EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP.

The CODM conducts monthly financial reviews, focusing on revenue trends, gross margin performance and operational efficiency across the Company's vertically integrated operations.

Investment decisions, including capital expenditures for new cultivation facilities and retail expansion, are made based on expected return on investment and regulatory considerations in each state in which the Company operates.

The table below provides the Company's Net loss, (Loss) income from operations, and a reconciliation of (Loss) income from operations to Adjusted EBITDA for the three months ended March 31, 2025 and 2024 (in thousands):

Three months ended

2025 March 31,

$ ( 5,420 ) $ ( 1,292 )

GAAP (Loss) income from operations $ ( 851 ) $ 2,021

Depreciation and amortization of property and equipment 1,807 1,938

Amortization of acquired intangible assets 949 374

Stock-based compensation 547 244

Acquisition-related and other 112 84

Adjusted EBITDA $ 2,564 $ 4,661

The Company’s main sources of revenue are comprised of the following:

• Product sales (retail and wholesale) – direct sales of cannabis and cannabis-infused products by the Company’s retail dispensaries and wholesale operations.

This revenue is recognized when products are delivered or at retail points-of-sale.

• Real estate rental income – rental income generated from leasing of the Company’s state-of-the-art, regulatory-compliant cannabis facilities to its cannabis-licensed clients.

Rental income is generally a fixed amount per month that escalates over the respective lease terms.

• Supply procurement fees – fees from facilitating purchases of cultivation and production resources, supplies and equipment for the Company's cannabis-licensed clients and third parties.

The Company recognizes this revenue after the delivery and acceptance of goods by a purchaser.

• Management fees – fees for providing the Company’s cannabis clients with comprehensive oversight of their cannabis cultivation, production and dispensary operations.

• Licensing fees – revenue from the licensing of the Company's branded products, including Betty's Eddies , Bubby's Baked , Vibations and Kalm Fusion , to wholesalers and to regulated dispensaries throughout the United States and Puerto Rico.

The Company recognizes this revenue when the products are delivered.

The Financial Accounting Standards Board Accounting Standards Codification 606, Revenue from Contract with Customers, as amended by subsequently issued Accounting Standards Updates, requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to in exchange for those goods or services.

The recognition of revenue is determined by performing the following consecutive steps:

• Product sales (retail and wholesale) .

The Company's product sales are derived from direct sales of cannabis and cannabis-infused products primarily by its retail dispensaries and wholesale operations in multiple states.

The Company recognizes revenue when products are delivered to third parties or at the Company's retail points-of-sale.

• Other revenue .

The Company's other revenue is comprised of real estate rentals to cannabis-licensed clients;

supply procurement fees from facilitating purchases of resources, supplies and equipment for cannabis-licensed clients and third parties;

management fees for providing cannabis-licensed clients with comprehensive oversight of their operations;

and licensing fees from the licensing of its branded products to wholesalers and regulated dispensaries.

The Company recognizes revenue in amounts that represent the consideration that it expects to receive in exchange for good or services provided to customers as follows:

• Identify the contract(s) with a customer;

7 unchanged sentences

If deemed an agent, the Company does not recognize revenue for the performance obligations it does not satisfy.

Revenue for the three and nine months ended September 30, 2024 and 2023 was comprised of the following (in thousands):

Three months ended Nine months ended

September 30,

2024 September 30,

2023 September 30,

2024 September 30,

Product revenue:

Product revenue - retail $ 23,384 $ 24,121 $ 69,353 $ 71,640

Product revenue - wholesale 16,310 13,643 46,683 35,050

Total product revenue 39,694 37,764 116,036 106,690

Revenue for the three months ended March 31, 2025 and 2024 was comprised of the following (in thousands):

Three months ended

2025 March 31,

Product sales - retail $ 20,779 $ 22,346

Product sales - wholesale 16,786 14,505

Other revenue 390 1,082

Real estate rentals 319 631 976 1,570

Supply procurement 323 321 1,020 1,125

Management fees 189 37 787 91

Licensing fees 66 47 143 223

Total other revenue 897 1,036 2,926 3,009

Total revenue $ 37,955 $ 37,933

(14) MAJOR CUSTOMERS

The Company did not have any customers that contributed 10% or more of total revenue in any of the three- or nine-month periods ended September 30, 2024 or 2023.

The Company did not have any customers that accounted for 10% or more of the Company’s accounts receivable balance at either September 30, 2024 or December 31, 2023.

The Company did not have any customers that contributed 10% or more of total revenue in either of the three-month periods ended March 31, 2025 or 2024.

The Company did not have any customers that accounted for 10% or more of the Company’s accounts receivable balance at either March 31, 2025 or December 31, 2024.

The Company performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable.

5 unchanged sentences

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

At September 30, 2024, the Company was the lessee under eight operating leases and thirty finance leases.

At March 31, 2025, the Company was the lessee under nine operating leases and thirty-four finance leases.

These leases contain rent holidays and customary escalations of lease payments for the type of facilities being leased.

The Company's operating leases include its corporate headquarters, dispensaries and cannabis production and processing facilities.

The Company subleases three of these leased facilities to a cannabis-licensed client.

Prior to the FSC Acquisition Date, the Company subleased three of these leased facilities to FSC and recognized rental income from these arrangements.

The Company recognizes rent expense on a straight-line basis over the expected lease term, including cancelable option periods which the Company fully expects to exercise.

Certain leases require the payment of property taxes, insurance and/or maintenance costs in addition to the rent payments.

The Company leases machinery and office equipment under finance leases that expire from January 2026 through April 2030, with such terms being a major part of the economic useful life of the leased property.

The components of lease expense for the three and nine months ended September 30, 2024 and 2023 were as follows (in thousands):

Three months ended Nine months ended

September 30,

2024 September 30,

2023 September 30,

2024 September 30,

The Company leases machinery and office equipment under finance leases that expire from January 2026 through July 2031, with such terms being a major part of the economic useful life of the leased property.

The components of lease expense for the three months ended March 31, 2025 and 2024 were as follows (in thousands):

Three months ended

2025 March 31,

Operating lease expense $ 533 $ 517

3 unchanged sentences

Total finance lease expense $ 413 $ 278

The weighted average remaining lease terms and weighted average discount rates for the Company's operating leases and finance leases at September 30, 2024 and December 31, 2023 were as follows:

September 30,

The weighted average remaining lease terms and weighted average discount rates for the Company's operating leases and finance leases at March 31, 2025 and December 31, 2024 were as follows:

2025 December 31,

5 unchanged sentences

Finance leases 9.5 % 9.6 %

Future minimum lease payments as of September 30, 2024 under all non-cancelable leases having an initial or remaining term of more than one year were (in thousands):

Future minimum lease payments as of March 31, 2025 under all non-cancelable leases having an initial or remaining term of more than one year were (in thousands):

leases Finance

11 unchanged sentences

This lease expires in October 2028 and contains a five-year extension option.

Expenses incurred under this lease were approximately $ 64,000 and $ 61,000 for the three months ended September 30, 2024 and 2023, respectively, and approximately $ 168,000 and $ 190,000 for the nine months ended September 30, 2024 and 2023, respectively.

Expenses incurred under this lease were approximately $ 77,000 and $ 41,000 for the three months ended March 31, 2025 and 2024, respectively.

The Company procures nutrients, lab equipment, cultivation supplies, furniture, and tools from an entity owned by the family of the Company’s Chief Operating Officer (the “COO”).

Purchases from this entity totaled $ 1.3 million and $ 1.4 million in the three months ended September 30, 2024 and 2023, respectively, and $ 3.5 million and $ 4.2 million in the nine months ended September 30, 2024 and 2023, respectively.

The Company pays royalties on the revenue generated from its Betty’s Eddies product line to an entity owned by the COO and its Chief Revenue Officer (the “CRO") under a royalty agreement.

Purchases from this entity totaled $ 1.4 million and $ 1.1 million in the three months ended March 31, 2025 and 2024, respectively.

The Company pays royalties on the revenue generated from its Betty’s Eddies product line to an entity owned by the COO and the Chief Commercial Officer (the “CCO") under a royalty agreement.

Under this agreement, the royalty percentage on all sales of Betty’s Eddies products is 3.0 % if sold directly by the Company and between 1.35 % and 2.5 % if licensed by the Company for sale by third parties.

Future developed products (i.e., ice cream) have a royalty rate of 0.5 % if sold directly by the Company and between 0.125 % and 0.135 % if licensed by the Company for sale by third parties.

The aggregate royalties earned by the entity under this agreement were approximately $ 178,000 and $ 149,000 for the three months ended September 30, 2024 and 2023, respectively, and approximately $ 427,000 and $ 614,000 for the nine months ended September 30, 2024 and 2023, respectively.

During the three months ended September 30, 2024 and 2023, one of the Company’s majority-owned subsidiaries paid distributions of approximately $ 1,900 and $ 3,000 , respectively, to the CEO, who owns a minority equity interest in such subsidiary.

During the nine months ended September 30, 2024 and 2023, this majority-owned subsidiary made distribution payments of approximately $ 5,000 and $ 6,400 , respectively, to the CEO.

The aggregate royalties earned by the entity under this agreement were approximately $ 163,000 and $ 118,000 for the three months ended March 31, 2025 and 2024 .

During the three months ended March 31, 2025 and 2024, one of the Company’s majority-owned subsidiaries paid or accrued distributions of approximately $ 1,800 and $ 1,200 , respectively, to the CEO, who owns a minority equity interest in such subsidiary.

On June 10, 2024 (the "Membership Unit Purchase Date"), the CEO and COO purchased 5 % and 15 %, respectively, of the membership units of Mari Holdings Metropolis, LLC, one of the Company's majority-owned subsidiaries.

These membership units were purchased from the previous minority interest-holder, and accordingly, the percentage of this majority-owned subsidiary held by noncontrolling interests remains unchanged.

During the three months ended September 30, 2024, this majority-owned subsidiary accrued distribution payments of approximately $ 3,250 and $ 9,750 to the CEO and COO, respectively.

During the nine months ended September 30, 2024, this majority-owned subsidiary accrued distribution payments of approximately $ 6,500 and $ 19,500 to the CEO and COO, respectively.

The Company holds a 49 % interest in a delivery company that delivers products purchased at certain of the Company's dispensaries (the "Delivery Company").

The remaining interest is held by a non-executive officer employee of the Company who was a founder of the Delivery Company.

The Company has provided funding to the Delivery Company;

during the nine months ended September 30, 2024 and 2023, the Company provided funding of approximately $ 197,000 and $ 58,000 , respectively.

As of September 30, 2024, these amounts remained outstanding.

Prior to December 31, 2023, FSCC, the cannabis-licensed client in Delaware that the Company manages, paid fees to BKR Management Inc., a company partially owned by the CEO, related to the initial formation, licensing and establishment of FSCC's cannabis operations.

The aggregate fees paid by FSCC were $ 48,000 and $ 144,000 , respectively, for the three and nine months ended September 30, 2023.

Payment of these fees terminated effective as of December 31, 2023.

At September 30, 2024, the Company’s mortgages with Bank of New England and DuQuoin State Bank were personally guaranteed by the CEO.

Additionally, the CEO provided a limited guaranty to the Lenders under the Company's Credit Agreement with Chicago Atlantic through its repayment in November 2023.

The CEO had also guaranteed the South Porte Bank Mortgage prior to its repayment in May 2023.

During the three months ended March 31, 2025, this majority-owned subsidiary accrued distribution payments of approximately $ 3,000 and $ 9,000 to the CEO and COO, respectively.

There were no such payments in the three months ended March 31, 2024.

At March 31, 2025 and December 31, 2024, the Company had an outstanding accounts payable balance of approximately $ 286,000 and $ 251,000 , respectively, primarily in connection with fixed assets purchased from a third-party company in which the CEO has a controlling interest.

The March 31, 2025 balance also includes approximately $ 35,000 of accounts payable to that company assumed by MariMed as part of the FSC Acquisition.

The Company also assumed an accounts payable amount of $ 21,000 from FSC to a second company in which the CEO has a controlling interest.

These assumed liabilities related to cash advances to FSC in periods prior to the FSC Acquisition Date.

At March 31, 2025, the Company’s mortgages with Bank of New England and DSB were personally guaranteed by the CEO.

(17) COMMITMENTS AND CONTINGENCIES

14 unchanged sentences

Equity Transactions

Subsequent to September 30, 2024, the Company issued 314,001 shares of common stock in the aggregate underlying RSUs that vested on various dates prior to the filing of this report.

Subsequent to March 31, 2025, the Company issued 550,773 shares of common stock in the aggregate underlying RSUs that vested on various dates prior to the filing of this report.

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