What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 217 added, 138 removed, 553 unchanged (39% of the section changed)

5 unchanged sentences

Cash and cash equivalents $ 6,138 $ 7,282

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

Accounts receivable, net of allowances of $ 350 and $ 255 at June 30, 2025 and December 31, 2024, respectively

Inventory 38,825 33,488

31 unchanged sentences

Series B convertible preferred stock, $ 0.001 par value;

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

4,908,333 shares authorized, issued and outstanding at June 30, 2025 and December 31, 2024

14,725 14,725

1 unchanged sentence

12,432,432 shares authorized;

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

zero and 1,155,274 shares issued and outstanding at June 30, 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 March 31, 2025 and December 31, 2024

zero shares issued and outstanding at June 30, 2025 and December 31, 2024

Common stock, $ 0.001 par value;

700,000,000 shares authorized;

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

392,007,065 and 381,476,581 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 178,698 173,366

6 unchanged sentences

(in thousands, except per share amounts)

Three months ended

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Revenue $ 39,611 $ 40,438 $ 77,566 $ 78,371

8 unchanged sentences

Total operating expenses 14,891 15,953 30,880 30,404

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

Income from operations 1,141 956 290 2,977

Interest and other (expense) income:

1 unchanged sentence

Interest income 25 25 49 51

Other expense, net — ( 20 )

Other income (expense), net 17 ( 30 ) 17 ( 50 )

Total interest and other expense, net ( 1,720 ) ( 1,729 ) ( 3,458 ) ( 3,352 )

(Loss) income before income taxes ( 2,589 ) 398

Loss before income taxes ( 579 ) ( 773 ) ( 3,168 ) ( 375 )

Provision for income taxes 691 866 3,522 2,556

Net loss ( 1,270 ) ( 1,639 ) ( 6,690 ) ( 2,931 )

Net income attributable to noncontrolling interests 32 6

Net (loss) income attributable to noncontrolling interests ( 1 ) 12 31 18

Net loss attributable to common stockholders $ ( 1,269 ) $ ( 1,651 ) $ ( 6,721 ) $ ( 2,949 )

8 unchanged sentences

(in thousands, except share amounts)

Three months ended March 31, 2025

Six months ended June 30, 2025

Common stock Additional

12 unchanged sentences

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

Three months ended March 31, 2024

Release of shares under stock grants 3,568,940 3 ( 3 ) — — —

Shares of newly vested common stock surrendered to the Company to satisfy tax withholding obligations ( 251,631 ) — ( 21 ) — — ( 21 )

Common stock issued under licensing agreement 10,686 — 1 — — 1

Distributions to non-controlling interests — — — — ( 23 ) ( 23 )

Stock-based compensation — — 549 — — 549

Net loss — — — ( 1,269 ) ( 1 ) ( 1,270 )

Balances at June 30, 2025 392,007,065 $ 392 $ 178,698 $ ( 118,840 ) $ ( 1,802 ) $ 58,448

Six months ended June 30, 2024

Common stock Additional

10 unchanged sentences

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 ) — — —

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

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

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

See accompanying notes to the unaudited condensed consolidated financial statements.

1 unchanged sentence

(in thousands)

Three months ended

Six months ended

Cash flows from operating activities:

5 unchanged sentences

Stock-based compensation 1,096 492

Amortization of warrants issued as payment for services received — 218

Amortization of debt discount 222 175

19 unchanged sentences

Advances toward future business combinations and asset purchases ( 50 ) ( 485 )

Purchases of investments — ( 86 )

Purchases and renewals of cannabis licenses ( 301 ) ( 623 )

4 unchanged sentences

(in thousands)

Three months ended

Six months ended

Cash flows from financing activities:

1 unchanged sentence

Proceeds from mortgages 2,000 1,163

Payment of third-party debt issuance costs in connection with debt ( 9 ) —

Principal payments of mortgages ( 741 ) ( 138 )

Repayment and retirement of mortgages ( 689 ) —

Principal payments of promissory notes ( 1,919 ) ( 253 )

1 unchanged sentence

Distributions ( 81 ) ( 83 )

Net cash provided by financing activities ( 1,259 ) 1,645

Net (decrease) increase in cash and cash equivalents ( 81 ) 589

Net cash (used in) provided by financing activities ( 2,065 ) 2,961

Net decrease in cash and cash equivalents ( 1,144 ) ( 4,453 )

Cash and equivalents, beginning of year 7,282 14,645

4 unchanged sentences

Non-cash activities:

Common stock issued as purchase consideration $ — $ 991

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

Notes payable issued to purchase property and equipment $ 393 $ —

Entry into new finance leases $ 56 $ 1,389

1 unchanged sentence

Return of stock to the Company in connection with withholding taxes $ 30 $ —

Adjustment to purchase price allocation to reclassify certain acquired intangible assets to goodwill $ 569 $ 3,819

See accompanying notes to the unaudited condensed consolidated financial statements.

13 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 three-month period ended March 31, 2025.

There were no material changes to the Company's significant accounting policies during the six-month period ended June 30, 2025.

Principles of Consolidation

13 unchanged sentences

The fair values of these investments approximate their carrying values.

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

The Company had $ 0.2 million and $ 0.3 million of cash held in escrow at June 30, 2025 and December 31, 2024, respectively.

Fair Value of Financial Instruments

9 unchanged sentences

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.

The Company recorded $ 0.2 million and $ 1.6 million of bad debt expense in the three and six months ended June 30, 2025, respectively.

The six-month amount included $ 1.5 million of expense to fully reserve amounts due from two credit card service providers (the "Service Provider Receivables") and $ 0.1 million of expense to reserve for certain trade receivable accounts.

Of the $ 1.5 million of Service Provider Receivables, $ 1.3 million and the related reserve were included as components of Other assets and $ 0.2 million and the related reserve were included as components of Accounts Receivable in the condensed consolidated balance sheet at June 30, 2025.

At December 31, 2024, the Service Provider Receivables were included as components of Cash.

The Company recorded a nominal credit to bad debt expense in each of the three and six months ended June 30, 2024.

Recent Accounting Pronouncements

3 unchanged sentences

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"):

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;

(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.

5 unchanged sentences

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 Company's condensed consolidated statement of operations for the three and six months ended June 30, 2025 included $ 2.3 million and $ 3.1 million, respectively, of revenue and $ 1.4 million and $ 1.6 million of net loss attributable to FSC for the periods 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):

During the three months ended June 30, 2025, the Company recorded adjustments to the amounts allocated to certain acquired assets, assumed liabilities and goodwill to reflect updated information received in the period.

These adjustments included nominal amounts recorded to other current assets and other assets acquired and other current liabilities assumed, and a reduction of $ 0.5 million to property and equipment.

These adjustments were offset by a $ 0.6 million increase to goodwill.

A summary of the preliminary allocation of the FSC Consideration to the acquired and identifiable intangible assets as of June 30, 2025 is as follows (in thousands):

Fair value of consideration transferred:

14 unchanged sentences

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 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.

The following unaudited pro forma information presents the condensed combined results of MariMed and FSC for the three and six months ended June 30, 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

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 and six months ended June 30, 2025 and 2024 are as follows (in thousands):

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Revenue $ 39,401 $ 41,562 $ 78,734 $ 82,470

12 unchanged sentences

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.

On the Allgreens Acquisition Date, the Company made the final cash payment of $ 875,000 and issued promissory notes in the aggregate principal amount of $ 1.0 million (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.

1 unchanged sentence

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.

As of June 30, 2025, the Company has made the first and second of these additional payments in accordance with the revised repayment terms.

The Company made the final payment of $ 400,000 in July 2025 and accordingly, the Allgreens Notes were 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.

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

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.

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

2 unchanged sentences

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 March 31, 2025

Pending Transaction at June 30, 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

2025 March 31,

Three months ended Six months ended

2025 June 30,

2024 June 30,

2025 June 30,

Weighted average shares outstanding - basic 389,903 379,514 386,250 377,362

2 unchanged sentences

(4) INVENTORY

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

Inventory at June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

2025 December 31,

7 unchanged sentences

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 also subleased three properties to FSC - a cannabis production facility with offices, a dispensary, and a portion of a third property that it developed into a cultivation facility.

The Company acquired FSC on March 1, 2025 (see Note 2).

In connection with the FSC Acquisition, the Company ceased receiving rental payments and recognizing rental income from FSC related to these properties.

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

1 unchanged sentence

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.

The Company received rental payments and recognized rental income of $ 0.2 million in the six months ended June 30, 2025, all of which was recorded in the three months ended March 31, 2025.

The Company received rental payments aggregating $ 0.3 million and $ 0.6 million in the three and six months ended June 30, 2024, respectively.

These payments were recognized as revenue on a straight-line basis.

(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.

At June 30, 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.

4 unchanged sentences

(7) PROPERTY AND EQUIPMENT, NET

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

The Company’s property and equipment, net, at June 30, 2025 and December 31, 2024 was comprised of the following (in thousands):

2025 December 31,

8 unchanged sentences

Property and equipment, net $ 92,646 $ 94,167

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 recorded depreciation expense related to property and equipment of $ 2.1 million and $ 2.0 million in the three months ended June 30, 2025 and 2024, respectively, and $ 3.9 million in each of the six months ended June 30, 2025 and 2024, respectively.

During the six months ended June 30, 2025, the Company wrote off property and equipment with an original cost aggregating $ 1.5 million, the majority of which was fully depreciated.

The Company recognized a loss on these write-offs of $ 0.3 million.

(8) INTANGIBLE ASSETS AND GOODWILL

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

March 31, 2025 Weighted

The Company’s acquired intangible assets at June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

June 30, 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 March 31, 2025 was as follows:

Estimated future amortization expense for the Company’s intangible assets at June 30, 2025 was as follows:

Year ending December 31,

2 unchanged sentences

Total $ 20,721

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):

The changes in the carrying value of the Company’s goodwill in the six months ended June 30, 2025 and 2024 were as follows (in thousands):

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

1 unchanged sentence

Adjustments to Ermont purchase price allocation* — 3,819

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

Balance at June 30, $ 20,051 $ 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.

1 unchanged sentence

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 March 31, 2025 and December 31, 2024 were comprised of the following (in thousands):

The Company’s mortgage and notes payable balances at June 30, 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"), net of debt discount of $ 1,442 and $ 1,460 at March 31, 2025 and December 31, 2024, respectively

Construction to Permanent Commercial Real Estate Mortgage Loan ("CREM Loan"), net of debt discount of $ 1,424 and $ 1,460 at June 30, 2025 and December 31, 2024, respectively

$ 56,592 $ 57,136

1 unchanged sentence

DuQuoin State Bank - Anna, IL and Harrisburg, IL properties — 689

DuQuoin State Bank - Anna, IL and Harrisburg, IL properties (refinanced) 1,999 —

DuQuoin State Bank - Metropolis, IL property 2,385 2,427

3 unchanged sentences

Vernon, IL property (grow and production) 2,842 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 note issued as purchase consideration - Ermont Acquisition, net of debt discount of $ 1,605 and $ 1,801 at June 30, 2025 and December 31, 2024, respectively

Promissory note issued as purchase consideration - Greenhouse Naturals Acquisition, net of debt discount of $ 540 and $ 567 at June 30, 2025 and December 31, 2024, respectively

Promissory notes issued as purchase consideration - MedLeaf Acquisition 387 1,377

2 unchanged sentences

Promissory notes issued to purchase motor vehicles 151 168

Promissory note issued to purchase other machinery and equipment 359 —

Total mortgages and notes payable 74,318 74,986

7 unchanged sentences

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.

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 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 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.

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 Company recorded approximately $ 18,000 of interest amortization in each of the three months ended June 30, 2025 and 2024, and approximately $ 36,000 in each of the six months ended June 30, 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 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.

During the six months ended June 30, 2025, the Company made payments aggregating $ 3.1 million, comprised of $ 0.6 million of principal and $ 2.5 million of interest.

During the six months ended June 30, 2024, the Company received $ 2.9 million of the amount previously held back by the CREM Lender and made interest-only payments aggregating $ 2.3 million.

The current portion of the outstanding principal balance of the CREM Loan was $ 1.2 million at each of June 30, 2025 and December 31, 2024, respectively.

Bank of New England (Wilmington, DE)

2 unchanged sentences

The next interest rate adjustment will occur in September 2026.

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.

The current portion of the outstanding principal balance under this mortgage at June 30, 2025 and December 31, 2024 was approximately $ 144,000 and $ 140,000 , respectively.

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

In May 2016, the Company entered into a mortgage agreement with DuQuoin State Bank ("DSB") for the purchase of properties in Anna, IL and Harrisburg, IL, which the Company developed into two free-standing retail dispensaries.

In May 2016, the Company entered into a loan and mortgage agreement with DuQuoin State Bank ("DSB") for the purchase of properties in Anna, IL and Harrisburg, IL (the "DSB Original Mortgage"), which the Company developed into two free-standing retail dispensaries.

On May 5th of each year, this mortgage is due to be repaid unless it is renewed for another year at a rate determined by DSB’s executive committee.

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 each of March 31, 2025 and December 31, 2024 was approximately $ 27,000 .

The current portion of the outstanding principal balance under this mortgage at December 31, 2024 was approximately $ 27,000 .

In May 2025, the Company refinanced this mortgage with DSB at a rate of 9.5 % per annum (the "DSB Refinance Mortgage").

The DSB Refinance Mortgage matures in May 2045.

The Company used $ 0.7 million of the proceeds from the DSB Refinance Mortgage to retire the DSB Original Mortgage.

At June 30, 2025, the current portion of the outstanding principal balance under the DSB Refinance Mortgage was approximately $ 36,000 .

DuQuoin State Bank (Metropolis, IL)

2 unchanged sentences

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 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.

The current portion of the outstanding principal balance of this mortgage at June 30, 2025 and December 31, 2024 was approximately $ 61,000 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.

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.

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

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 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 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.

The current portion of the outstanding principal balance of this mortgage was approximately $ 65,000 and $ 61,000 at June 30, 2025 and December 31, 2024, respectively.

DuQuoin State Bank (Mt.

3 unchanged sentences

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 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.

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

The mortgage 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 $ 33,000 and $ 31,000 at June 30, 2025 and December 31, 2024, respectively.

Promissory Notes

Promissory Notes Issued as Purchase Consideration

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

In connection with the March 9, 2023 acquisition of Ermont Inc., the Company issued a promissory note to the sellers in the principal amount of $ 7.0 million the ("Ermont Note").

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.

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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 $ 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.

The fair value of the Ermont Note was $ 3.1 million and $ 2.9 million at June 30, 2025 and December 31, 2024, respectively.

The current portion of the outstanding principal balance of the Ermont Note was $ 0.4 million and $ 0.5 million at June 30, 2025 and December 31, 2024, respectively.

Greenhouse Naturals LLC

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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.

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.

The fair value of the Greenhouse Naturals Note was $ 3.6 million and $ 3.8 million at June 30, 2025 and December 31, 2024, respectively.

The Company estimated that the current portion of the Greenhouse Naturals Note was $ 0.5 million and $ 0.8 million at June 30, 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).

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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.

At June 30, 2025 and December 31,

2024, the MedLeaf Note had an outstanding balance of $ 0.4 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 each of March 31, 2025 and December 31, 2024, all of which was recorded as current and was in default.

The Allgreens Notes bear interest at a rate of 7.5 % per annum and would mature one year from the date that 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.

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

As of June 30, 2025, the Company has made the first and second additional payments in accordance with the revised repayment terms.

The Company made the final payment of $ 400,000 in July 2025 and accordingly, the Allgreens Notes were satisfied in full.

The Allgreens Notes had an aggregate outstanding balance of $ 0.4 million and $ 1.0 million at June 30, 2025 and December 31, 2024, respectively all of which was recorded as current.

At December 31, 2024, the amount outstanding was in default.

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 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.

The Company had five outstanding promissory notes in connection with the purchase of commercial motor vehicles at both June 30, 2025 and December 31, 2024.

At June 30, 2025, the outstanding notes had an aggregate outstanding balance of approximately $ 151,000 , of which approximately $ 38,000 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 11.43 % 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 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.

The weighted average interest rates of the outstanding balances were 11.49 % and 11.38 % at June 30, 2025 and December 31, 2024, respectively.

The weighted average remaining terms of these notes were 3.84 years and 4.27 years at June 30, 2025 and December 31, 2024, respectively.

The Middleborough 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.

In May 2025 the Company issued a promissory note in the amount of $ 392,950 in connection with the purchase of certain machinery and equipment (the "M&E Note").

The M&E Note bears interest at an imputed rate of 15.7 % per annum, and matures in May 2027.

The current portion of the M&E Note was approximately $ 147,000 at June 30, 2025.

Future Payments

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

The future principal amounts due under the Company's outstanding mortgages and notes payable at June 30, 2025 were as follows (in thousands):

Year ending December 31,

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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 March 31, 2025 and December 31, 2024, which shares are held by three institutional shareholders.

The Company had 4,908,333 shares of Series B Convertible Preferred Stock (the "Series B Stock") outstanding at both June 30, 2025 and December 31, 2024, 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.

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In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the Series B Holders shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders before any payment shall be made to the holders of the Company's common stock by reason of their ownership thereof, an amount per share of Series B Stock equal to $ 3.00 , plus any dividends declared but unpaid thereon, with any remaining assets distributed pro-rata among the Series B Holders and the holders of the Company's common stock, based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted into shares of the Company's common stock.

At any time on or prior to the six-year anniversary of the 2020 issuance date of the Series B Stock, (i) the Series B Holders have the option to convert their shares of Series B Stock into shares of the Company's common stock at a conversion price of $ 3.00 per share, without the payment of additional consideration, and (ii) the Company has the option to convert all, but not less than all, shares of Series B Stock into shares of the Company's common stock at a conversion price of $ 3.00 if the daily volume weighted average price of the Company's common stock (the “VWAP”) exceeds $ 4.00 per share for at least twenty consecutive trading days prior to the date on which the Company gives notice of such conversion to the Series B Holders.

At any time on or prior to February 28, 2026, the six-year anniversary of the 2020 issuance date of the Series B Stock, (i) the Series B Holders have the option to convert their shares of Series B Stock into shares of the Company's common stock at a conversion price of $ 3.00 per share, without the payment of additional consideration, and (ii) the Company has the option to convert all, but not less than all, shares of Series B Stock into shares of the Company's common stock at a conversion price of $ 3.00 if the daily volume weighted average price of the Company's common stock (the “VWAP”) exceeds $ 4.00 per share for at least twenty consecutive trading days prior to the date on which the Company gives notice of such conversion to the Series B Holders.

On the day following the six-year anniversary of the issuance of the Series B Stock (February 28, 2026), all outstanding shares of Series B Stock ( 4,908,333 shares) shall automatically convert into shares of the Company's common stock as follows:

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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 did not recognize either 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 were outstanding at June 30, 2025.

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

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Stock Options

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

A summary of stock option activity during the six months ended June 30, 2025 is below:

Shares Weighted average exercise price

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Expired ( 2,541,000 ) $ 0.64

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

Outstanding at June 30, 2025 31,730,921 $ 0.80

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

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.

At June 30, 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 six months ended June 30, 2025.

Restricted Stock Units

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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.

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

A summary of RSU activity for the six months ended June 30, 2025 was as follows:

RSUs Weighted average grant date fair value

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Forfeited ( 745,849 ) $ 0.19

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

Outstanding at June 30, 2025 10,611,855 $ 0.18

Of the 5,094,205 RSUs reported as vested in the table above, 359,792 shares, with an aggregate fair value of approximately $ 30,000 , were surrendered to the Company to satisfy the tax withholding obligations that arose in connection with the vesting of such RSUs.

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 .

At June 30, 2025, warrants to purchase up to 21,548,936 shares of the Company's common stock were outstanding, with a weighted average exercise price of $ 0.46 per share.

Other Common Stock Issuances

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.

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 six months ended June 30, 2025, the Company also issued 19,701 shares of restricted common stock with an aggregate fair value of approximately $ 2,000 , under a royalty agreement.

Stock-Based Compensation

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.

The Company recorded stock-based compensation of $ 0.6 million and $ 0.2 million in the three months ended June 30, 2025 and 2024, respectively, and $ 1.1 million and $ 0.5 million in the six months ended June 30, 2025 and 2024, respectively.

(12) SEGMENT INFORMATION

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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.

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,

The table below provides the Company's Net loss, Income from operations, and a reconciliation of Income from operations to Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three months ended Six months ended

2025 June 30,

2024 June 30,

2025 June 30,

$ ( 1,270 ) $ ( 1,639 ) $ ( 6,690 ) $ ( 2,931 )

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

GAAP Income from operations $ 1,141 $ 956 $ 290 $ 2,977

Depreciation and amortization of property and equipment 2,114 2,008 3,921 3,946

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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:

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

• Identify the contract(s) with a customer;

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The Company is typically considered the principal if it controls the specified good or service before such good or service is transferred to its client, and typically considered the agent if it does not exert such control.

The Company may also be deemed to be the principal even if it engages another party (an agent) to satisfy some of the performance obligations on its behalf, provided the Company (i) takes on certain responsibilities, obligations and risks, (ii) possesses certain abilities and discretion, or (iii) fulfills other relevant indicators of the sale.

discretion, or (iii) fulfills other relevant indicators of the sale.

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

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

Three months ended

2025 March 31,

Revenue for the three and six months ended June 30, 2025 and 2024 was comprised of the following (in thousands):

Three months ended Six months ended

2025 June 30,

2024 June 30,

2025 June 30,

Product sales - retail $ 22,439 $ 23,623 $ 43,218 $ 45,969

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(14) MAJOR CUSTOMERS

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 did not have any customers that contributed 10% or more of total revenue in any of the three- or six-month periods ended June 30, 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 June 30, 2025 or December 31, 2024.

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

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

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

At June 30, 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.

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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,

The components of lease expense for the three and six months ended June 30, 2025 and 2024 were as follows (in thousands):

Three months ended Six months ended

2025 June 30,

2024 June 30,

2025 June 30,

Operating lease expense $ 534 $ 520 $ 1,067 $ 1,037

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Total finance lease expense $ 370 $ 273 $ 783 $ 551

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:

The weighted average remaining lease terms and weighted average discount rates for the Company's operating leases and finance leases at June 30, 2025 and December 31, 2024 were as follows:

2025 December 31,

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Finance leases 9.4 % 9.6 %

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):

Future minimum lease payments as of June 30, 2025 under all non-cancelable leases having an initial or remaining term of more than one year were (in thousands):

leases Finance

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

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

Expenses incurred under this lease were approximately $ 68,000 and $ 63,000 for the three months ended June 30, 2025 and 2024, respectively, and $ 145,000 and $ 104,000 for the six months ended June 30, 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 $ 1.4 million and $ 1.1 million in the three months ended March 31, 2025 and 2024, respectively.

Purchases from this entity totaled $ 1.6 million and $ 1.2 million in the three months ended June 30, 2025 and 2024, respectively, and $ 2.9 million and $ 2.2 million in the six months ended June 30, 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 $ 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.

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 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 $ 156,000 and $ 131,000 for the three months ended June 30, 2025 and 2024, respectively, and approximately $ 319,000 and $ 249,000 for the six months ended June 30, 2025 and 2024, respectively .

During the three months ended June 30, 2025 and 2024, one of the Company’s majority-owned subsidiaries paid or accrued distributions of approximately $ 1,300 and $ 1,900 , respectively, to the CEO, who owns a minority equity interest in such subsidiary.

During the six months ended June 30, 2025 and 2024, this majority-owned subsidiary made distribution payments of approximately $ 3,000 and $ 3,100 , respectively, to the CEO.

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 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.

During the three months ended June 30, 2025, this majority-owned subsidiary recorded distributions of approximately $ 2,000 and $ 6,000 to the CEO and COO, respectively.

During the six months ended June 30 2025, this majority-owned subsidiary recorded distributions of approximately $ 5,000 and $ 15,000 to the CEO and COO, respectively.

During both the three- and six-month periods ended June 30, 2024, this majority-owned subsidiary recorded distributions of $ 3,250 and $ 9,750 to the CEO and COO, respectively.

At June 30, 2025 and December 31, 2024, the Company had an outstanding accounts payable balance of approximately $ 240,000 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 Company assumed approximately $ 35,000 of accounts payable to that company 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.

At June 30, 2025, the Company’s mortgages with Bank of New England and DSB were personally guaranteed by the CEO.

(17) INCOME TAXES

The following table summarizes the Company's income tax provision and effective tax rates for the three and six months ended June 30, 2025 and 2024 (in thousands, except percentages):

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Loss before income taxes $ ( 579 ) $ ( 773 ) $ ( 3,168 ) $ ( 375 )

Income tax provision $ 691 $ 866 $ 3,522 $ 2,556

Effective tax rate ( 119 ) % ( 112 ) % ( 111 ) % ( 682 ) %

The effective tax rates for the three and six months ended June 30, 2025 and 2024 were calculated using the discrete method based on the Company's period-to-date results adjusted for permanent and temporary differences.

Due to its cannabis operations, the Company is subject to the limitations of the U.S.

Internal Revenue Code of 1986, as amended ("IRC") Section 280E under which the Company is only allowed to deduct expenses directly related to cost of goods sold of cannabis products.

This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E.

As a result, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income and provides for effective tax rates that are well in excess of statutory tax rates.

During the three months ended June 30, 2025, the Company effectively settled an audit with the U.S.

Internal Revenue Service for the tax period ended December 31, 2022.

As a result, the Company recognized a tax benefit of $ 1.7 million in connection with the release of an uncertain tax position reserve.

In June 2025, the IRS filed a lien against the Company in connection with an approximate $ 6 million 2023 alleged tax liability.

The Company is disputing the assessment through a Collection Due Process (“CDP”) Hearing and pursuing a resolution, including potential reduction or collection alternatives.

While the matter is pending, IRS enforcement is generally stayed.

Although the liability is fully accrued in the accompanying condensed consolidated financial statements, an unfavorable outcome could materially impact the Company’s operations and financial position.

(18) COMMITMENTS AND CONTINGENCIES

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(19) SUBSEQUENT EVENTS

Entry Into a Management Services and Licensing Agreement

On July 30, 2025, the Company entered into a Management Services Agreement ("MSA") with Standard Farms, LLC ("Standard Farms"), a wholly-owned subsidiary of TILT Holdings ("TILT").

Under the terms of the MSA, which is effective on September 1, 2025, the Company will assume the day-to-day management of TILT's Standard Farms cultivation and processing facility in White Haven, Pennsylvania.

These management services include oversight of Standard Farms' budgeting, financial planning, compliance with applicable laws and quality management.

In addition, pursuant to a licensing arrangement with the Company, upon regulatory approval, Standard Farms intends to produce and distribute MariMed's brands in Pennsylvania.

Equity Transactions

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.

Subsequent to June 30, 2025, the Company issued an aggregate of 302,900 net shares of common stock upon the settlement of RSUs that vested 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