What changed in this filing

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Item 1. Financial Statements

2026-05-14 compared with 2025-11-06 · 259 added, 322 removed, 494 unchanged (54% of the section changed)

2 unchanged sentences

(in thousands, except share and per share amounts)

September 30,

2026 December 31,

Current assets:

Cash and cash equivalents $ 6,596 $ 7,282

Accounts receivable, net of allowances of $ 225 and $ 255 at September 30, 2025 and December 31, 2024, respectively

Cash, cash equivalents and restricted cash $ 7,937 $ 8,884

Accounts receivable, net of allowances of $ 364 and $ 287 at March 31, 2026 and December 31, 2025, respectively

Inventory 39,296 36,601

Deferred rents receivable — 556

Notes receivable, current portion 866 866

4 unchanged sentences

Goodwill 24,002 24,002

Notes receivable, net of current portion — 840

Operating lease right-of-use assets 7,539 7,723

14 unchanged sentences

Operating lease liabilities, net of current portion 6,387 6,616

Condensed Consolidated Balance Sheets (continued)

(in thousands, except share and per share amounts)

September 30,

2025 December 31,

Finance lease liabilities, net of current portion 1,566 1,956

Other liabilities 100 100

Total liabilities 147,739 137,831

Commitments and contingencies

Condensed Consolidated Balance Sheets (continued)

(in thousands, except share and per share amounts)

2026 December 31,

Mezzanine equity

Series B convertible preferred stock, $ 0.001 par value;

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

14,725 14,725

Series C convertible preferred stock $ 0.001 par value;

12,432,432 shares authorized;

zero and 1,155,274 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

zero and 4,908,333 shares authorized, issued and outstanding at March 31, 2026 and December 31, 2025

New Series B convertible preferred stock, $ 0.001 par value;

26,900,000 and zero shares authorized, issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Total mezzanine equity 6,933 14,725

2 unchanged sentences

32,659,235 shares authorized;

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

zero shares issued and outstanding at March 31, 2026 and December 31, 2025

Common stock, $ 0.001 par value;

700,000,000 shares authorized;

394,452,517 and 381,476,581 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

398,906,622 and 396,911,368 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital 179,723 179,405

6 unchanged sentences

(in thousands, except per share amounts)

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

Three months ended

Revenue $ 39,481 $ 37,906

8 unchanged sentences

Total operating expenses 15,151 15,999

Income from operations 1,599 1,345 1,705 4,077

Income (loss) from operations 125 ( 910 )

Interest and other (expense) income:

1 unchanged sentence

Interest income 36 24

Other income (expense), net 19 — 36 ( 50 )

Gain on extinguishment of debt 699 —

Total interest and other expense, net ( 1,241 ) ( 1,738 )

13 unchanged sentences

(in thousands, except share amounts)

Nine months ended September 30, 2025

Three months ended March 31, 2026

Common stock Additional

6 unchanged sentences

Shares of newly vested common stock surrendered to the Company to satisfy tax withholding obligations ( 61,868 ) — ( 5 ) — — ( 5 )

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

Distributions to non-controlling interests — — — — ( 49 ) ( 49 )

2 unchanged sentences

Balances at March 31, 2026 398,906,622 $ 399 $ 179,723 $ ( 131,717 ) $ ( 1,892 ) $ 46,513

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 — — — ( 1,394 ) ( 1 ) ( 1,395 )

Balances at June 30, 2025 392,007,065 392 178,698 ( 120,353 ) ( 1,802 ) 56,935

Release of shares under stock grants 2,599,549 2 ( 2 ) — — —

Shares of newly vested common stock surrendered to the Company to satisfy tax withholding obligations ( 161,145 ) — ( 22 ) — — ( 22 )

Common stock issued under licensing agreement 7,048 — 1 — — 1

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

Stock-based compensation — — 382 — — 382

Net (loss) income — — — ( 2,948 ) 7 ( 2,941 )

Balances at September 30, 2025 394,452,517 $ 394 $ 179,057 $ ( 123,301 ) $ ( 1,829 ) $ 54,321

Condensed Consolidated Statements of Stockholders’ Equity (continued)

(in thousands, except share amounts)

Nine months ended September 30, 2024

Three months ended March 31, 2025

Common stock Additional

5 unchanged sentences

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

Shares of newly vested 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

3 unchanged sentences

Balances at March 31, 2025 388,679,070 $ 389 $ 178,172 ( 118,959 ) ( 1,778 ) 57,824

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 — — — ( 1,791 ) 12 ( 1,779 )

Balances at June 30, 2024 380,338,790 $ 380 $ 172,842 $ ( 104,175 ) $ ( 1,715 ) $ 67,332

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 ( 85,071 ) — ( 15 ) — — ( 15 )

Common stock issued under licensing agreement 19,205 — 5 — — 5

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

Stock-based compensation — — 280 — — 280

Net loss (income) — — — ( 1,006 ) 16 ( 990 )

Balances at September 30, 2024 380,992,386 $ 381 $ 173,111 $ ( 105,181 ) $ ( 1,736 ) $ 66,575

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:

5 unchanged sentences

Stock-based compensation 325 547

Amortization of warrants issued as payment for services received — 218

Amortization of debt discount 115 105

1 unchanged sentence

Payment-in-kind interest — 30

Bad debt expense (income) 1,522 ( 131 )

Bad debt expense 76 1,388

Obligations settled with common stock — 1

Loss (gain) on disposal of assets 245 ( 20 )

Loss on changes in fair value of investments — 145

Loss on disposal of assets — 111

Gain on extinguishment of debt ( 699 ) —

Changes in operating assets and liabilities:

15 unchanged sentences

Proceeds from notes receivable — 26

Return on investment — 44

Proceeds from disposal of assets 45 22

Due from third party — ( 197 )

Net cash used in investing activities ( 753 ) ( 115 )

1 unchanged sentence

(in thousands)

Nine months ended

September 30,

Three months ended

Cash flows from financing activities:

Proceeds from Construction to Permanent Commercial Real Estate Mortgage Loan — 5,077

Proceeds from mortgages 2,000 1,163

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

Principal payments of mortgages ( 414 ) ( 401 )

Repayment and retirement of mortgages ( 689 ) —

Principal payments of promissory notes ( 236 ) ( 478 )

1 unchanged sentence

Distributions ( 49 ) ( 58 )

Net cash (used in) provided by financing activities ( 3,769 ) 3,878

Net cash used in financing activities ( 1,143 ) ( 1,259 )

Net decrease in cash and cash equivalents ( 947 ) ( 81 )

5 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 $ 447 $ 396

Renewal of existing operating leases $ 94 $ —

Entry into new finance leases $ — $ 56

Write-off of finance leases $ ( 1,112 )

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

Return of stock to the Company in connection with withholding taxes $ 5 $ 9

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

Exchange of preferred stock for preferred stock $ 6,933 $ —

Exchange of preferred stock for notes payable $ 7,093 $ —

See accompanying notes to the unaudited condensed consolidated financial statements.

2 unchanged sentences

("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.

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 medicinal 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.

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

Cannabis remains illegal under United States Federal laws.

The Company's operations are conducted in compliance with applicable state and local laws and regulations in the jurisdictions in which it operates.

Basis of Presentation

6 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, 2025.

There were no material changes to the Company's significant accounting policies during the three-month period ended March 31, 2026.

Principles of Consolidation

8 unchanged sentences

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.

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

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with a maturity date of three months or less to be cash equivalents.

The fair values of these investments approximate their carrying values.

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

The Company classifies as restricted cash all cash pledged as collateral to secure long-term obligations and all cash whose use is otherwise limited by contractual provisions.

The Company had $ 1.8 million and $ 1.5 million of restricted cash at March 31, 2026 and December 31, 2025, respectively, which is held as collateral for the Company's Construction to Permanent Commercial Real Estate Mortgage Loan (the "CREM Loan") with Needham Bank, a Massachusetts co-operative bank (the "CREM Lender") (the "CREM Loan Collateral") (see Note 9).

Fair Value of Financial Instruments

9 unchanged sentences

Bad Debt Expense

The Company recorded $ 0.1 million of credits to bad debt expense and $ 1.5 million of bad debt expense in the three and nine months ended September 30, 2025, respectively.

The nine-month amount included $ 1.5 million of expense to fully reserve amounts due from two credit card service providers (the "Service Provider Receivables").

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 September 30, 2025.

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

The Company recorded $ 0.1 million of credits to bad debt expense in each of the three and nine months ended September 30, 2024.

The Company recorded $ 0.1 million of bad debt expense in the three months ended March 31, 2026 to reserve for certain trade receivable accounts.

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 for 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 is included as a component of Other assets at both March 31, 2026 and December 31, 2025 in the condensed consolidated balance sheets.

Recent Accounting Pronouncements

The Company has reviewed all recently issued, but not yet effective, Accounting Standards Updates (“ASUs”) and does not believe that the future adoption of any such ASUs will have a material impact on its financial condition or results of operations.

(2) BUSINESS COMBINATIONS AND ASSET PURCHASES

(2) BUSINESS COMBINATION

1 unchanged sentence

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;

(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.

2 unchanged sentences

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").

During 2025, the State of Delaware 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 and nine months ended September 30, 2025 included revenue of $ 3.9 million and $ 7.1 million, respectively, and $ 2.4 million and $ 0.8 million of net income, respectively, attributable to FSC for the periods since the FSC Acquisition Date.

Prior to the FSC Acquisition Date, this amount was included as a component of Other assets in the condensed consolidated balance sheets.

The Company also wrote off deferred rents receivable aggregating $ 0.5 million related to the facilities FSC had subleased from the Company through the FSC Acquisition Date.

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 subsequent to the FSC Acquisition Date.

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

During the three months ended September 30, 2025, the Company recorded reductions of $ 0.2 million to current assets, net of cash acquired, $ 0.6 million to the tradenames and trademarks intangible asset and $ 1.4 million to the customer base intangible asset, and an increase of $ 0.4 million to assumed accrued expenses.

These amounts were offset by an increase of $ 2.6 million to goodwill.

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

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

Fair value of consideration transferred:

10 unchanged sentences

Other assets 5

Income taxes payable ( 1,333 )

Current liabilities ( 2,706 )

Fair value of net assets acquired $ 11,170

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 5.84 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 FSC for the three and nine months ended September 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.

The following unaudited pro forma information presents the condensed combined results of MariMed and FSC for the three months ended March 31, 2025 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

These unaudited pro forma results for the three and nine months ended September 30, 2025 and 2024 are as follows (in thousands):

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

Accordingly, these unaudited pro forma results are presented for illustrative purposes only 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 are as follows (in thousands):

Revenue $ 39,284

2 unchanged sentences

The valuation of acquired intangible assets is inherently subjective and relies on significant unobservable inputs.

The Company uses an income approach to value acquired tradenames and trademarks, licenses and customer bases, and non-compete intangible assets.

The Company uses an income approach to value acquired trade names and trademarks, licenses and customer bases, and non-compete intangible assets.

The valuation for each of these intangible assets is based on estimated projections of expected cash flows to be generated by the assets discounted to the present value at discount rates commensurate with perceived risk.

The valuation assumptions take into consideration the Company’s estimates of new markets, products and customers and its outcome through key assumptions driving asset values, including sales growth, royalty rates and other related costs.

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"), 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.

With the closing conditions met and the acquisition completed, the Company now owns and operates five adult-use dispensaries in Illinois.

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 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 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.

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.

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).

Our Community Wellness & Compassionate Care Center, Inc.

On February 1, 2024 (the "P&S Date"), the Company entered into an agreement to acquire 100 % of the membership interests of MedLeaf (the "MedLeaf Agreement"), which held a retail dispensary license in Maryland.

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").

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.

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.

On the MedLeaf Acquisition Date, the escrowed funds were released, 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 bore interest at a rate of 8.0 % per annum and was scheduled to mature on October 5, 2025.

It called for six equal quarterly payments beginning on July 5, 2024.

The Company made the final payment in September 2025, satisfying the MedLeaf Note in full.

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

Disposition of Missouri Operations and Exit from Pending Transaction

4 unchanged sentences

The Company was conducting business under a managed service agreement until the final approval of the License Transfer.

Pursuant to the Robust Agreement, the Company made an initial advance payment of $ 350,000 , with the balance due at closing, which was to occur upon the State of Missouri's approval of the License Transfer.

On October 28, 2025, the Company announced that it had completed a strategic review of its Missouri business operations and had decided to exit that market, effective that day.

For additional information, please see Note 19.

Pursuant to the Robust Agreement, the Company made an initial advance payment of $ 350,000 (the "Advance Payment"), with the balance due at closing, which was to occur upon the State of Missouri's approval of the License Transfer.

On October 28, 2025, the Company announced that it had completed a strategic review of its Missouri business operations and had decided to exit that market, effective immediately (the "Missouri Exit").

In furtherance thereof, the Company entered into an agreement to sell and assign its rights, interests and duties as outlined in the Robust Agreement, and to transfer its ownership of all Company-held assets purchased in connection with the Robust Agreement to the buyer, including inventory and fixed assets, and wrote off the Advance Payment.

The Company also negotiated the forgiveness of an outstanding payable for purchases it had made under the Robust Agreement.

The Company recognized a loss on the Missouri Exit of $ 0.8 million in the fourth quarter of 2025.

(3) EARNINGS (LOSS) PER SHARE

2 unchanged sentences

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

Three months ended Nine months ended

September 30,

2025 September 30,

2024 September 30,

2025 September 30,

Three months ended

2026 March 31,

Weighted average shares outstanding - basic 397,450 382,557

2 unchanged sentences

(4) INVENTORY

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

September 30,

Inventory at March 31, 2026 and December 31, 2025 consisted of the following (in thousands):

2026 December 31,

9 unchanged sentences

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.

In connection with the FSC Acquisition, the Company ceased receiving rental payments and recognizing rental income from FSC related to these properties and wrote off the remaining deferred rent receivable related to these subleases aggregating $ 0.5 million.

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 and recognized rental income of $ 0.2 million in the nine months ended September 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 $ 0.9 million in the three and nine months ended September 30, 2024, respectively.

The Company received rental payments and recognized rental income of $ 0.2 million in the three months ended March 31, 2025.

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

1 unchanged sentence

Note Receivable

At September 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.

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

As of September 30, 2025, all interest payments were current.

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.

At each of March 31, 2026 and December 31, 2025, 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 bore interest at a rate of 6 % per annum and required quarterly payments of interest through the original April 2026 maturity date.

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

As of March 31, 2026, all interest payments were current.

On May 6, 2026,the Company and Healer entered into an Amended and Restated Promissory Note (the "Amended Healer Note"), which extended the maturity date of the original note to April 1, 2033, effective April 1, 2026.

The Amended Healer Note bears interest at a rate of 6 % per annum and requires quarterly interest-only payments through March 1, 2028.

Effective April 1, 2028, the Amended Healer Note requires quarterly payments of both principal and interest for the remaining five years of the note through the maturity date, with such principal payments based on a five-year amortization schedule.

The Company continues to have 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).

The amount due under the Omnibus Agreement, which was included as a component of Other assets in the condensed consolidated balance sheet prior to the FSC Acquisition Date, 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, 2025 and December 31, 2024 was comprised of the following (in thousands):

September 30,

The Company’s property and equipment, net, at March 31, 2026 and December 31, 2025 was comprised of the following (in thousands):

2026 December 31,

8 unchanged sentences

Property and equipment, net $ 88,054 $ 89,385

The Company recorded depreciation expense related to property and equipment of $ 2.1 million and $ 1.8 million in the three months ended September 30, 2025 and 2024, respectively, and $ 6.0 million and $ 5.7 million in each of the nine months ended September 30, 2025 and 2024, respectively.

During the nine months ended September 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 $ 0.2 million.

The Company recorded depreciation expense related to property and equipment of $ 2.2 million and $ 1.8 million in the three months ended March 31, 2026 and 2025, respectively.

The Company did not dispose of any property and equipment during the three months ended March 31, 2026.

(8) INTANGIBLE ASSETS AND GOODWILL

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

September 30, 2025 Weighted

The Company’s acquired intangible assets at March 31, 2026 and December 31, 2025 consisted of the following (in thousands):

March 31, 2026 Weighted

period (years) Cost Accumulated

11 unchanged sentences

8.23 $ 27,726 $ 10,516 $ 17,210

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

Estimated future amortization expense for the Company’s intangible assets at March 31, 2026 was as follows:

Year ending December 31,

2 unchanged sentences

Total $ 16,400

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

The changes in the carrying value of the Company’s goodwill in the three months ended March 31, 2026 and 2025 were as follows (in thousands):

Balance at January 1, $ 24,002 $ 15,812

FSC Acquisition — 3,670

Adjustments to Ermont purchase price allocation* — 3,819

Balance at September 30, $ 22,655 $ 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 Tradenames and trademarks intangible asset, Licenses and customer base intangible asset, and Goodwill.

Balance at March 31, $ 24,002 $ 19,482

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

September 30,

The Company’s mortgage and notes payable balances at March 31, 2026 and December 31, 2025 were comprised of the following (in thousands):

2026 December 31,

Construction to Permanent Commercial Real Estate Mortgage Loan ("CREM Loan"), net of debt discount of $ 1,405 and $ 1,460 at September 30, 2025 and December 31, 2024, respectively

CREM Loan, net of debt discount of $ 1,369 and $ 1,387 at March 31, 2026 and December 31, 2025, respectively

$ 55,730 $ 56,037

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DuQuoin State Bank - Anna, IL and Harrisburg, IL properties 1,973 1,979

DuQuoin State Bank - Anna, IL and Harrisburg, IL properties (refinanced) 1,990 —

DuQuoin State Bank - Metropolis, IL property 2,342 2,358

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Vernon, IL property (grow and production) 2,793 2,814

Promissory note issued as purchase consideration - Ermont Acquisition, net of debt discount of $ 1,502 and $ 1,801 at September 30, 2025 and December 31, 2024, respectively

Promissory note issued as purchase consideration - Greenhouse Naturals Acquisition, net of debt discount of $ 526 and $ 567 at September 30, 2025 and December 31, 2024, respectively

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

Promissory note issued as purchase consideration - Allgreens Acquisition — 1,000

Promissory note issued to the holders of the Series B Convertible Preferred Stock under the Restructuring and Exchange Agreement (see Note 10), net of debt discount of $ 176 at March 31, 2026

Promissory note issued to the holders of the Series B Convertible Preferred Stock under the Restructuring and Exchange Agreement (see Note 10), net of debt discount of $ 732 at March 31, 2026

Promissory note issued as purchase consideration - Ermont Acquisition, net of debt discount of $ 1,266 and $ 1,327 at March 31, 2026 and December 31, 2025, respectively

Promissory note issued as purchase consideration - Greenhouse Naturals Acquisition, net of debt discount of $ 501 and $ 513 at March 31, 2026 and December 31, 2025, respectively

Promissory note issued to purchase land 352 352

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Mortgages and notes payable, net of current portion $ 76,027 $ 70,192

On November 16, 2023, Mari Holdings MD LLC, Hartwell Realty Holdings LLC, Kind Therapeutics USA, LLC, ARL Healthcare Inc., and MariMed Advisors, Inc., each a wholly-owned direct or indirect subsidiary of the Company (collectively, the "CREM Borrowers"), entered into a Loan Agreement (the "CREM Loan Agreement") by and among the CREM Borrowers, and Needham Bank, a Massachusetts co-operative bank (the "CREM Lender") pursuant to which the CREM Lender loaned to the CREM Borrowers an aggregate principal amount of $ 58.7 million (the "CREM Loan Transaction").

CREM Lender loaned to the CREM Borrowers an aggregate principal amount of $ 58.7 million (the "CREM Loan Transaction").

The Company guaranteed the obligations of the CREM Borrowers under the CREM Loan Transaction and pledged to the CREM Lender its equity ownership in each CREM Borrower.

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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 (described below).

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 September 30, 2025 and 2024, and approximately $ 48,000 in each of the nine months ended September 30, 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 March 31, 2026 and 2025 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.

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

During the nine months ended September 30, 2025, the Company made payments aggregating $ 4.6 million, comprised of $ 0.9 million of principal and $ 3.7 million of interest.

During the nine months ended September 30, 2024, the Company received $ 5.1 million of the amount previously held back by the CREM Lender and made interest-only payments aggregating $ 4.0 million.

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

Bank of New England (Wilmington, DE)

During the three months ended March 31, 2026, 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, 2025, the Company made payments aggregating $ 1.5 million, comprised of $ 0.3 million of principal and $ 1.2 million of interest.

The current portion of the outstanding principal balance of the CREM Loan was $ 1.3 million at each of March 31, 2026 and December 31, 2025.

Effective December 31, 2025, the Company and the CREM Borrowers entered into a First Amendment to the CREM Loan Agreement (the "Amendment") in connection with a federal tax lien filed against the Company relating to its 2023 income taxes (the "Tax Lien"), which the Company is disputing (the "Disputed Taxes").

Pursuant to the Amendment, beginning in January 2026, the CREM Borrowers are required to deposit $ 100,000 per month into a non-interest-bearing cash collateral reserve account to be held by the CREM Lender until the full amount of the Disputed Taxes is on deposit.

The account is pledged as additional collateral under the CREM Loan Agreement and the amounts on deposit are available for payment of the Disputed Taxes.

The Amendment also modified the CREM Borrowers' reporting obligations under the CREM Loan Agreement.

All other material terms of the CREM Loan Agreement remain in effect.

Bank of New England (Wilmington, Delaware)

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.

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The next interest rate adjustment will occur in September 2026.

The current portion of the outstanding principal balance under this mortgage at September 30, 2025 and December 31, 2024 was approximately $ 146,000 and $ 140,000 , respectively.

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

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

DuQuoin State Bank (Metropolis, IL)

The current portion of the outstanding principal balance under this mortgage at was approximately $ 150,000 and $ 148,000 at March 31, 2026 and December 31, 2025, respectively.

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

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, which the Company developed into two free-standing retail dispensaries (the "DSB Original Mortgage").

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

The DSB Mortgage matures in May 2045.

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

The current portion of the outstanding principal balance under the DSB Refinance Mortgage was approximately $ 38,000 at each of March 31, 2026 and December 31, 2025.

DuQuoin State Bank (Metropolis, Illinois)

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

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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 September 30, 2025 and December 31, 2024 was approximately $ 48,000 and $ 56,000 , respectively.

The current portion of the outstanding principal balance of this mortgage was approximately $ 61,000 and $ 55,000 at March 31, 2026 and December 31, 2025 respectively.

DuQuoin State Bank (Mt.

Vernon, Illinois grow and production)

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.

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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 $ 46,000 and $ 61,000 at September 30, 2025 and December 31, 2024, respectively.

The current portion of the outstanding principal balance of this mortgage was approximately $ 62,000 and $ 61,000 at March 31, 2026 and December 31, 2025, respectively.

DuQuoin State Bank (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.

Beginning in August 2021, pursuant to an amendment of the South Porte Bank Mortgage, the monthly payments of principal and interest aggregated approximately $ 6,000 , with such payment amounts effective through June 2023, at which time all remaining principal, interest and fees were due.

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

Vernon, Illinois retail)

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 $ 27,000 and $ 31,000 at September 30, 2025 and December 31, 2024, respectively.

The current portion of the outstanding principal balance of this mortgage was approximately $ 22,000 and $ 30,000 at March 31, 2026 and December 31, 2025, respectively.

Promissory Notes

Promissory Notes Issued Under the Restructuring and Exchange Agreement with the Holders of the Series B Convertible Preferred Stock

On February 24, 2026, the Company and the holders of its Series B Convertible Preferred Stock (the "Series B Holders") entered into a Restructuring and Exchange Agreement (the "Series B Restructuring Agreement") to restructure the Company's existing obligation under the Series B Convertible Preferred Stock (the "Series B Obligation") described in Note 10.

Pursuant to the Series B Restructuring Agreement, all outstanding shares of outstanding Series B Convertible Preferred Stock were cancelled, and the Series B Obligation was extinguished.

In exchange, the Company issued to the Series B Holders (i) two new promissory notes in the aggregate principal amount of $ 8.0 million, one in the principal amount of $ 2.0 million, due March 1, 2028, accruing interest at a rate of 8.0 % per annum (“Note #1”) and the other in the principal amount of $ 6.0 million, due March 1, 2031, accruing interest at a rate of 10.0 % per annum (subject to reduction to 8.0 % if Note #1 is paid in full within six (6) months of February 24, 2026) (“Note #2” collectively with Note #1, the “New Notes”), and (ii) 26,900,000 shares of an amended and restated class of the Company’s Series B Convertible Preferred Stock (the “New Series B Preferred Stock”), having an aggregate liquidation preference of $ 6.725 million ($ 0.25 per share), and the rights, preferences and privileges set forth in the Second Amended and Restated Certificate of Designation filed with the Secretary of State of the State of Delaware on February 26, 2026 (the “Amended Certificate of

Designation”).

The New Notes are guaranteed by certain subsidiaries of the Company pursuant to a Subsidiary Guaranty dated as of February 24, 2026 (the “Subsidiary Guaranty”).

The transaction was accounted for as an extinguishment of the Series B Obligation in accordance with Accounting Standards Codification 470, Debt ("ASC 470"), and a gain on the extinguishment of $ 0.7 million was recognized.

This amount is included in the Company's condensed consolidated statement of operations for the three months ended March 31, 2026.

The New Notes were initially recorded at fair value.

The difference between the principal amount and the allocated fair value was recorded as a debt discount, which is being accreted to interest expense over the respective terms of the New Notes.

Note #1 was initially recorded at a fair value of $ 1.8 million.

This amount is net of the $ 0.2 million recorded as a debt discount, which is being accreted through the term of Note #1 to interest expense.

The fair value of Note #1 was $ 1.8 million at March 31, 2026.

The current portion of the outstanding principal balance of Note #1 was $ 0.4 million at March 31, 2026.

Note #2 was initially recorded at a fair value of $ 5.3 million.

This amount is net of the $ 0.7 million recorded as a debt discount, which is being accreted through the term of Note #2 to interest expense.

The fair value of Note #2 was $ 5.2 million at March 31, 2026.

The current portion of the outstanding principal balance of Note #2 was $ 0.4 million at March 31, 2026.

Promissory Notes Issued as Purchase Consideration

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").

In connection with the March 9, 2023 acquisition of Ermont Inc.

(the "Ermont Acquisition"), 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 $ 3.2 million and $ 2.9 million at September 30, 2025 and December 31, 2024, respectively.

The current portion of the outstanding principal balance of the Ermont Note was $ 0.1 million and $ 0.5 million at September 30, 2025 and December 31, 2024, respectively.

The fair value of the Ermont Note was $ 3.3 million and $ 3.2 million at March 31, 2026 and December 31, 2025, respectively.

The current portion of the outstanding principal balance of the Ermont Note was $ 0.1 million at each of March 31, 2026 and December 31, 2025, 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 $ 3.5 million and $ 3.8 million at September 30, 2025 and December 31, 2024, respectively.

The Company estimated that the current portion of the Greenhouse Naturals Note was $ 0.4 million and $ 0.8 million at September 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).

The fair value of the Greenhouse Naturals Note was $ 3.3 million and $ 3.4 million at March 31, 2026 and December 31, 2025, respectively.

The Company estimated that the current portion of the Greenhouse Naturals Note was $ 0.5 million and $ 0.6 million at March 31, 2026 and December 31, 2025, respectively.

In connection with the acquisition of Our Community Wellness & Compassionate Care Center, Inc.

("MedLeaf"), the Company issued a promissory note to the sellers of MedLeaf totaling $ 2.0 million as part of the purchase consideration (the "MedLeaf Note").

The MedLeaf Note bore interest at a rate of 8.0 % per annum and was scheduled to mature on October 5, 2025.

It called for six equal quarterly payments beginning on July 5, 2024.

The Company made the final payment in September 2025,

satisfying the MedLeaf Note in full.

The MedLeaf Note had an outstanding balance of $ 1.4 million at December 31, 2024, 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 would mature one year from the date that the dispensary was permitted to commence operations.

The Company made the final payment in September 2025, satisfying the MedLeaf Note in full.

In connection with the Allgreens Acquisition, the Company issued promissory notes aggregating $ 1.0 million to the sellers of Allgreens as part of the purchase consideration (the "Allgreens Notes").

The Allgreens Notes bore interest at a rate of 7.5 % per annum and were scheduled to 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.

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 $ 1.0 million at December 31, 2024, all of which was recorded as current, and which was in default.

The Company made the final payment of $ 400,000 in July 2025, satisfying the Allgreens Notes in full.

Promissory Notes Issued to Purchase Property and Equipment

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

At September 30, 2025, the outstanding notes had an aggregate outstanding balance of approximately $ 196,000 , of which approximately $ 45,000 was current.

The Company had six outstanding promissory notes in connection with the purchase of commercial motor vehicles at each of March 31, 2026 and December 31, 2025.

At March 31, 2026, the outstanding notes had an aggregate outstanding balance of approximately $ 173,000 , of which approximately $ 43,000 was current.

At December 31, 2025, the outstanding notes had an aggregate outstanding balance of approximately $ 185,000 , of which approximately $ 45,000 was current.

The weighted average interest rates of the outstanding balances were 11.07 % and 11.38 % at September 30, 2025 and December 31, 2024, respectively.

The weighted average remaining terms of these notes were 4.26 years and 4.27 years at September 30, 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") at both September 30, 2025 and December 31, 2024.

The weighted average interest rates of the outstanding balances were 11.15 % and 11.11 % at March 31, 2026 and December 31, 2025, respectively.

The weighted average remaining terms of these notes were 3.87 years and 4.06 years at March 31, 2026 and December 31, 2025, respectively.

The Company had an outstanding note totaling $ 352,000 at each of March 31, 2026 and December 31, 2025 in connection with the purchase, in the second quarter of 2024, of a parking lot adjacent to its Middleborough, Massachusetts dispensary (the "Middleborough Note") at both March 31, 2026 and December 31, 2025.

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.

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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 $ 163,000 at September 30, 2025.

The current portion of the M&E Note was approximately $ 175,000 and $ 169,000 at March 31, 2026 and December 31, 2025, respectively.

Future Payments

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

The future principal amounts due under the Company's outstanding mortgages and notes payable at March 31, 2026 were as follows (in thousands):

Year ending December 31,

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(10) MEZZANINE EQUITY

Series B Convertible Preferred Stock and Restructuring and Exchange Agreement

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, 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.

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.

The Series B Stock shall, with respect to dividend rights and rights on liquidation, winding up and dissolution, rank senior to the Company’s common stock.

The Company shall not declare, pay, or set aside any dividends on shares of any other class or series of capital stock of the Company unless the Series B Holders shall first receive, or simultaneously receive, a dividend on each outstanding share of Series B Stock in an amount calculated pursuant to the certificate of designation.

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 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:

The Company had 4,908,333 shares of Series B Convertible Preferred Stock (the "Series B Stock") outstanding at December 31, 2025, which were held by three institutional stockholders.

The Series B Stock ranked senior to the Company’s common stock with respect to dividend and liquidation rights.

In the event of liquidation, the Series B Holders were entitled to receive $ 3.00 per share, plus any declared but unpaid dividends, prior to any distribution to the Company's common stockholders.

At any time on or prior to February 28, 2026, the Series B Holders could convert their shares of Series B Stock into shares of the Company's common stock at a conversion price of $ 3.00 per share.

The Company also had the option to force conversion if the Company's common stock traded above specified thresholds.

On February 28, 2026, the six-year anniversary of the issuance of the Series B Stock, all such outstanding shares were scheduled to automatically convert into 4,908,333 shares of the Company's common stock and the Company would have been required to pay the Series B Holders the Series B Obligation, calculated as an amount equal to the difference between the sixty-day VWAP of $ 0.1018 and $ 3.00 per share, or $ 14.2 million.

Restructuring and Exchange Agreement

On February 24, 2026, the Company and the Series B Holders entered into the Series B Restructuring Agreement to restructure the Series B Obligation.

Pursuant to the Series B Restructuring Agreement, the then-outstanding shares of Series B Stock were cancelled, and the Series B Obligation was extinguished.

In exchange, the Company issued to the Series B Holders:

• the New Notes with an aggregate principal amount of $ 8.0 million, comprised of:

◦ Note #1 in the principal amount of $ 2.0 million, due March 1, 2028, accruing interest at a rate of 8.0 % per annum;

◦ Note #2 in the principal amount of $ 6.0 million, due March 1, 2031, accruing interest at a rate of 10.0 % per annum (subject to reduction to 8.0 % if Note #1 is paid in full within six (6) months of February 24, 2026);

• 26,900,000 shares of the New Series B Preferred Stock, with an aggregate liquidation preference of $ 6.725 million ($ 0.25 per share), and the rights, preferences and privileges set forth in the Amended Certificate of Designation.

The New Notes are guaranteed by certain subsidiaries of the Company pursuant to a Subsidiary Guaranty.

The New Series B Preferred Stock is non-voting.

However, the affirmative vote or consent of the holders of the New Series B Preferred Stock (the "New Series B Holders") voting separately as a class is required for certain acts taken by the Company, including the amendment or repeal of certain charter provisions, liquidation or winding up of the Company, creation of stock senior to the New Series B Preferred Stock, and/or other acts as defined in the Amended Certificate of Designation.

The New Series B Preferred Stock shall, with respect to dividend rights and rights on liquidation, winding up and dissolution, rank senior to the common stock.

The Company shall not declare, pay, or set aside any dividends on shares of any other class or series of capital stock of the Company unless the New Series B Holders shall first receive, or simultaneously receive, a dividend on each outstanding share of New Series B Preferred Stock in an amount calculated pursuant to the Amended Certificate of Designation.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the New 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 common stock by reason of their ownership thereof, an amount per share equal to $ 0.25 , plus any dividends declared but unpaid thereon, with any remaining assets distributed on a prorated basis among the New Series B Holders and the holders of 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 to common stock.

At any time on or prior to the five-year anniversary of the original issuance date of the New Series B Preferred Stock, (i) the New Series B Holders have the option to convert their shares of New Series B Preferred Stock into shares of common stock on a one -for-one basis, without the payment of additional consideration, and (ii) the Company has the option to convert all, but not less than all, of the shares of New Series B Preferred Stock into shares of common stock, on a one -for-one basis, if the VWAP exceeds $ 2.00 per share for at least twenty consecutive trading days prior to the date on which the Company gives notice of such conversion to the New Series B Holders and the average daily volume of shares traded is at least 400,000 shares.

On February 25, 2031, all outstanding shares of New Series B Preferred Stock shall automatically convert into common stock as follows:

If the sixty-day VWAP is less than or equal to $ 0.25 per share, the Company shall have the option to:

• convert all shares of Series B Stock into shares of the Company's common stock at a conversion ratio of 1 :1 ( 4,908,333 shares), subject to adjustment upon the occurrence of certain events, and pay cash to the Series B Holders equal to the difference between the sixty-day VWAP and $ 3.00 per share;

• pay cash to the Series B Holders equal to $ 3.00 per share ($ 14,725,000 ).

• convert all shares of New Series B Preferred Stock into shares of common stock at a conversion ratio of 1 :1 ( 26,900,000 shares), subject to adjustment upon the occurrence of certain events, and pay cash to the New Series B Holders equal to the difference between the sixty-day VWAP and $ 0.25 per share;

• pay cash to the New Series B Holders equal to $ 0.25 per share ($ 6.725 million).

If the sixty-day VWAP is greater than $ 0.25 per share, the Company shall have the option to:

• convert all shares of Series B Stock into shares of the Company's common stock at a conversion price per share equal to $ 3.00 per share divided by the sixty-day VWAP;

• pay cash to the Series B Holders equal to $ 3.00 per share ($ 14,725,000 );

• convert a number of shares of Series B Stock, such number at the Company's sole discretion, into shares of the Company's common stock valued at the sixty-day VWAP (the "Conversion Value") and pay cash to the Series B Holders equal to the difference between $ 14,725,000 and the Conversion Value (shares issued multiplied by the sixty-day VWAP).

The Company shall at all times when the Series B Stock is outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Series B Stock, such number of its duly authorized shares of common stock as shall from time to time be sufficient to effect the conversion of all outstanding Series B Stock.

• convert all shares of New Series B Preferred Stock into shares of common stock at a conversion price per share equal to $ 0.25 per share divided by the sixty-day VWAP;

• pay cash to the New Series B Holders equal to $ 0.25 per share ($ 6.725 million);

• convert a number of shares of New Series B Preferred Stock, such number at the Company's sole discretion, into shares of the common stock valued at the sixty-day VWAP (the "Conversion Value") and pay cash to the New Series B Holders equal to the difference between $ 6.725 million and the Conversion Value (shares issued multiplied by the sixty-day VWAP).

The Company shall at all times when New Series B Preferred Stock is outstanding, reserve and keep available such number of its duly authorized shares of common stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of New Series B Preferred Stock.

The Company evaluated the transaction and determined that the transaction represented an extinguishment of the Series B Stock and the issuance of new financial instruments with substantially different economic terms and legal rights.

The New Notes require contractual cash repayment, bear stated cash interest and do not contain equity conversion features.

Accordingly, the New Notes met the definition of debt and were recorded as liabilities at fair value as of the date of issuance (see Note 9) .

The New Series B Preferred Stock does not require unconditional redemption at a fixed date, contains contingent cash settlement features and provides the Company with settlement discretion, as described above.

Accordingly, the Company determined that the New Series B Preferred Stock should be classified as mezzanine equity.

The New Notes, net of debt discount, are included as components of liabilities and the New Series B Preferred Stock is reported as mezzanine equity in the condensed consolidated balance sheets at March 31, 2026.

The Company recorded the New Notes and the New Series B Preferred Stock at their respective fair values at the transaction date and allocated the total consideration transferred based on their relative fair values.

The Company recognized a non-cash gain on the extinguishment of $ 0.7 million in the three months ended March 31, 2026, representing the excess of the carrying value of the Series B Obligation over the aggregate fair value of the New Notes and New Series B Preferred Stock.

The New Notes, net of debt discount, are included as components of liabilities (see Note 9) and the New Series B Preferred Stock is reported as mezzanine equity in the condensed consolidated balance sheets at March 31, 2026.

Series C Convertible Preferred Stock

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.

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.

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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 September 30, 2025.

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

As a result of the Conversion, no shares of Series C Stock were outstanding at either March 31, 2026 or December 31, 2025.

(11) STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

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Stock Options

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

A summary of stock option activity during the three months ended March 31, 2026 is below:

Shares Weighted average exercise price

1 unchanged sentence

Expired ( 1,115,000 ) $ 0.57

Outstanding at September 30, 2025 31,510,921 $ 0.80

Outstanding at March 31, 2026 18,040,921 $ 0.84

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

At September 30, 2025, the stock options outstanding had a weighted average remaining life of approximately eight months .

The Company did not grant any stock options during the nine months ended September 30, 2025.

At March 31, 2026, the stock options outstanding had a weighted average remaining life of approximately six months .

The Company did not grant any stock options during the three months ended March 31, 2026.

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 nine months ended September 30, 2025 was as follows:

A summary of RSU activity for the three months ended March 31, 2026 was as follows:

RSUs Weighted average grant date fair value

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Forfeited ( 156,043 ) $ 0.12

Outstanding at September 30, 2025 8,531,790 $ 0.18

Outstanding at March 31, 2026 8,801,920 $ 0.12

Of the 2,063,790 RSUs reported as vested in the table above, 61,868 shares, with an aggregate fair value of approximately $ 5,400 , were surrendered to the Company to satisfy the tax withholding obligations that arose in connection with the vesting of such RSUs.

At September 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 nine months ended September 30, 2025, the Company also issued 26,749 shares of restricted common stock with an aggregate fair value of approximately $ 3,000 , under a royalty agreement.

At March 31, 2026, 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.

Stock-Based Compensation

The Company recorded stock-based compensation of $ 0.4 million and $ 0.3 million in the three months ended September 30, 2025 and 2024, respectively, and $ 1.5 million and $ 0.8 million in the nine months ended September 30, 2025 and 2024, respectively.

The Company recorded stock-based compensation of $ 0.3 million and $ 0.5 million in the three months ended March 31, 2026 and 2025, respectively.

(12) SEGMENT INFORMATION

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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:

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

• depreciation and amortization of property and equipment;

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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.

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 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, Income from operations, and a reconciliation of Income from operations to Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Three months ended Nine months ended

September 30,

2025 September 30,

2024 September 30,

2025 September 30,

The table below provides the Company's Net loss, Income (loss) from operations, and a reconciliation of Income (loss) from operations to Adjusted EBITDA for the three months ended March 31, 2026 and 2025 (in thousands):

Three months ended

2026 March 31,

$ ( 3,767 ) $ ( 5,479 )

GAAP Income from operations $ 1,599 $ 1,345 $ 1,705 $ 4,077

GAAP Income (loss) from operations $ 125 $ ( 910 )

Depreciation and amortization of property and equipment 2,153 1,807

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Stock-based compensation 325 547

Severance 224 — 224 —

Acquisition-related and other 169 112

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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.

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.

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, 2025 and 2024 was comprised of the following (in thousands):

Three months ended Nine months ended

September 30,

2025 September 30,

2024 September 30,

2025 September 30,

Revenue for the three months ended March 31, 2026 and 2025 was comprised of the following (in thousands):

Three months ended

2026 March 31,

Product sales - retail $ 21,727 $ 20,730

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Total revenue $ 39,481 $ 37,906

Customer Loyalty Program – Adjustments to Correct Error in Prior Periods

The Company has a customer loyalty program (the “Loyalty Program”) under which customers earn points based on qualifying purchases that can be redeemed for discounts on future purchases.

Applying Accounting Standards Codification 606, Revenue from Contracts with Customers (“ASC 606”), a portion of the transaction price is allocated to the loyalty points based on their relative standalone selling price, and revenue is deferred until the points are redeemed or expire.

During the third quarter of 2025, the Company determined that it was not accounting for the Loyalty Program in accordance with ASC 606 and, accordingly, calculated the amounts that should have been recorded in prior periods.

These amounts were deemed immaterial to the Company’s condensed consolidated financial statements.

The Company has adjusted its financial statements to reflect the impact of adjustments to prior periods, which adjustments are reflected in the condensed consolidated financial statements included herein.

The Company recorded deferred revenue of $ 1.7 million and $ 1.3 million at September 30, 2025 and December 31, 2024, respectively.

The Company recorded decreases to revenue of approximately $ 83,000 and $ 237,000 in the three and nine months ended September 30, 2025, respectively, an increase to revenue of approximately $ 4,000 in the three months ended September 30, 2024 and a decrease to revenue of approximately $ 202,000 in the nine months ended September 30, 2024.

The Company recorded additional marketing and promotion expense of approximately $ 16,000 and $ 46,000 in the three and nine months ended September 30, 2025, respectively, a nominal credit to marketing and promotion expense in the three months ended September 30, 2024 and additional marketing and promotion expense of approximately $ 38,000 in the nine months ended September 30, 2024.

The Company’s deferred revenue for the Loyalty Program is reported separately in its condensed consolidated balance sheets.

Customer Loyalty Program

The Company has a customer loyalty program (the "Loyalty Program") under which customers who participate in the Loyalty Program earn points based on qualifying purchases that can be redeemed for discounts on future purchases.

A portion of the transaction price is allocated to the loyalty points based on their relative standalone selling price, and revenue is deferred until the points are redeemed or expire.

(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, 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 September 30, 2025 or December 31, 2024.

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, 2026 or 2025.

The Company did not have any customers that accounted for 10% or more of the Company’s accounts receivable balance at either March 31, 2026 or December 31, 2025.

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

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Right-of-use assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term, utilizing the Company’s incremental borrowing rate.

The Company’s lease terms may include options

to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

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

At September 30, 2025, the Company was the lessee under nine operating leases and thirty-seven finance leases.

At March 31, 2026, the Company was the lessee under nine operating leases and thirty-three 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 August 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 and nine months ended September 30, 2025 and 2024 were as follows (in thousands):

Three months ended Nine months ended

September 30,

2025 September 30,

2024 September 30,

2025 September 30,

The components of lease expense for the three months ended March 31, 2026 and 2025 were as follows (in thousands):

Three months ended

2026 March 31,

Operating lease expense $ 522 $ 533

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Total finance lease expense $ 553 $ 413

The weighted average remaining lease terms and weighted average discount rates for the Company's operating leases and finance leases at September 30, 2025 and December 31, 2024 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, 2026 and December 31, 2025 were as follows:

2026 December 31,

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Finance leases 11.1 % 10.9 %

Future minimum lease payments as of September 30, 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 March 31, 2026 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 $ 69,000 and $ 64,000 for the three months ended September 30, 2025 and 2024, respectively, and $ 213,000 and $ 168,000 for the nine months ended September 30, 2025 and 2024, respectively.

Expenses incurred under this lease were approximately $ 70,000 and $ 77,000 for the three months ended March 31, 2026 and 2025, 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 in each of the three months ended September 30, 2025 and 2024, and $ 4.3 million and $ 3.5 million in the nine months ended September 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.

Purchases from this entity totaled $ 1.4 million in each of the three months ended March 31, 2026 and 2025.

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 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 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 $ 154,000 and $ 178,000 for the three months ended September 30, 2025 and 2024, respectively, and approximately $ 472,000 and $ 427,000 for the nine months ended September 30, 2025 and 2024, respectively .

During the three months ended September 30, 2025 and 2024, one of the Company’s majority-owned subsidiaries paid or accrued distributions of approximately $ 2,000 and $ 1,900 , respectively, to the CEO, who owns a minority equity interest in such subsidiary.

This majority-owned subsidiary made distribution payments of approximately $ 5,000 to the CEO in each of the nine-month periods ended September 30, 2025 and 2024.

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, 2025, this majority-owned subsidiary recorded distributions of approximately $ 2,500 and $ 7,500 to the CEO and COO, respectively.

During the nine months ended September 30, 2025, this majority-owned subsidiary recorded distributions of approximately $ 7,500 and $ 22,500 to the CEO and COO, respectively.

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

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

At September 30, 2025 and December 31, 2024, the Company had an outstanding accounts payable balance of approximately $ 616,000 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.

The aggregate royalties earned by the

entity under this agreement were approximately $ 174,000 and $ 163,000 for the three months ended March 31, 2026 and 2025, respectively .

During the three months ended March 31, 2026 and 2025, one of the Company’s majority-owned subsidiaries paid or accrued distributions of $ 1,995 and $ 1,785 , respectively, to the CEO, who owns a minority equity interest in such subsidiary.

The CEO and COO own 5 % and 15 %, respectively, of the membership units of Mari Holdings Metropolis, LLC, one of the Company's majority-owned subsidiaries.

During the three months ended March 31, 2026, this majority-owned subsidiary recorded distributions of $ 5,000 and $ 15,000 to the CEO and COO, respectively.

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

At March 31, 2026 and December 31, 2025, the Company had an outstanding accounts payable balance of approximately $ 224,000 and $ 448,000 , 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, which is included in the previously described balances.

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, which amount was outstanding at each of March 31, 2026 and December 31, 2025.

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

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

In addition, the Company had outstanding payables to the CEO aggregating approximately $ 259,000 and $ 50,000 at March 31, 2026 and December 31, 2025, respectively, for amounts that the CEO had advanced to the Company for certain operating activities.

At March 31, 2026, 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 nine months ended September 30, 2025 and 2024 (in thousands, except percentages):

Three months ended Nine months ended

September 30, September 30,

2025 2024 2025 2024

The following table summarizes the Company's income tax provision and effective tax rates for the three months ended March 31, 2026 and 2025 (in thousands, except percentages):

Three months ended

Loss before income taxes $ ( 1,116 ) $ ( 2,648 )

1 unchanged sentence

Effective tax rate ( 238 ) % ( 107 ) %

The effective tax rates for the three and nine months ended September 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.

The effective tax rates for the three months ended March 31, 2026 and 2025 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.

Internal Revenue Code of 1986, as amended (the "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 nine months ended September 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 tax liability.

On April 23, 2026, the U.S.

Department of Justice (the "DOJ") issued a final order that placed both FDA-approved drugs containing cannabis and cannabis subject to a qualifying state medical list in Schedule III of the Controlled Substances Act.

As a result, business conducted within these categories is no longer subject to IRC Section 280E, allowing for full deduction of ordinary and necessary business expenses.

Due to the timing of when the final order was issued, the Company did not record the impact in its income tax provision for the three months ended March 31, 2026.

The Company continues to monitor guidance from the DOJ and the U.S.

Internal Revenue Service (the "IRS") to properly record and disclose any impact in its future financial statements.

In February 2026, the IRS filed a lien against FSC in connection with an approximate $ 1 million tax liability for the years 2023 and 2024, which periods were prior to the FSC Acquisition Date.

The Company recorded this liability as part of the allocation of the purchase consideration for FSC.

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

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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.

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

The Company is disputing the assessment through a CDP Hearing and pursuing a resolution, including potential reduction or collection alternatives.

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

(18) COMMITMENTS AND CONTINGENCIES

Litigation Risk

From time to time, the Company may become involved in litigation or regulatory proceedings in the ordinary course of it business.

The cannabis industry is highly regulated, and many aspects o the Company's business involve substantial risk of liability.

Further, as an employer of a significant number of full- and part-time employees, from time to time in the ordinary course of business, the Company aces claims and threatened claims from former employees alleging wrongful termination and other similar alleged wrongdoing, which the Company disputes and which are not material.

Bankruptcy Claim

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In the third quarter of 2023, the Company recorded an increase of $ 2.0 million in building and building improvements and a corresponding accrued liability in the same amount for electrical work performed at the Company's New Bedford and Middleborough properties between December 2017 and June 2023.

The electrical work was performed by an electrical contractor that is owned and/or controlled by the family of a non-officer/director Company stockholder who beneficially owned more than 5 % of the Company's common stock when the electrical work began.

The electrical work was performed by an electrical contractor that was owned and/or controlled by the family of a non-officer/director Company stockholder who beneficially owned more than 5 % of the Company's common stock when the electrical work began.

The electrical work was primarily paid for by an entity that is indirectly controlled by that individual and another non-officer/director Company stockholder who also beneficially owned more than 5 % of the Company's common stock when the electrical work began.

The Company repaid the two shareholders $ 300,000 each as salary between 2021 and 2023 (at the rate of $ 100,000 each per year), which payments have since terminated.

The Company repaid the two shareholders $ 300,000 each as salary between 2021 and 2023 (at the rate of $ 100,000 each per year).

Discussions to reach agreement with the entity that paid for the electrical work and all other interested parties to address this liability and related payment terms are ongoing.

1 unchanged sentence

Equity Transactions

Subsequent to September 30, 2025, the Company issued an aggregate of 621,108 net shares of common stock upon the settlement of RSUs that vested prior to the filing of this report.

Disposition of Missouri Operations

On October 28, 2025, the Company announced that it had completed a strategic review of its Missouri business operations and decided to exit the market, effective immediately.

Since 2024, the Company had managed the operations of a licensed cannabis operator and distributed its brands in the state pursuant to a Managed Services and Licensing Agreement, while awaiting approval from the state for a license transfer.

Following the strategic review, the Company determined that it will discontinue management of the facility and will no longer pursue the license transfer.

As a result of this decision, the Company expects to recognize a loss on disposal for the related assets in the fourth quarter of 2025 approximating $ 1 million.

The Company is in the process of finalizing the measurement of this loss.

Subsequent to March 31, 2026, the Company issued an aggregate of 359,469 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