What changed in RYTHM, Inc.'s 2025 10-K compared to 2024?

Across the narrative sections we track, RYTHM, Inc. (RYM) added 527 paragraphs, removed 746, and edited 290 between the 2024 and 2025 10-K filings. The biggest movers are Item 1. Business (+278/−366), Item 7. Management's Discussion & Analysis (+71/−198), Item 1A. Risk Factors (+169/−174).

Did RYTHM, Inc. add new Risk Factors in the 2025 10-K?

Yes — Item 1A Risk Factors shows 169 new/edited paragraphs and 174 removed paragraphs versus the 2024 10-K.

What changed in RYTHM, Inc.'s MD&A (Item 7) in 2025?

Item 7 Management's Discussion & Analysis shows 71 new/edited paragraphs and 198 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did RYTHM, Inc. update its Cybersecurity disclosure (Item 1C) in 2025?

Item 1C Cybersecurity has 4 paragraph-level changes between the 2024 and 2025 filings.

Did RYTHM, Inc.'s Legal Proceedings (Item 3) change in 2025?

Item 3 shows 1 added/edited paragraphs and 1 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this RYM 10-K diff come from?

The source filings are RYTHM, Inc.'s official 2024 and 2025 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in RYTHM, Inc.'s 10-K — 2024 vs 2025

Paragraph-level year-over-year comparison of RYTHM, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+527 added−746 removedSource: 10-K (2026-03-03) vs 10-K (2025-03-21)

Top changes in RYTHM, Inc.'s 2025 10-K

527 paragraphs added · 746 removed · 290 edited across 7 sections

Item 1. Business+278 / −366 · 124 edited
Item 7. Management's Discussion & Analysis+71 / −198 · 36 edited
Item 1A. Risk Factors+169 / −174 · 124 edited
Item 1C. Cybersecurity+4 / −3 · 3 edited
Item 2. Properties+2 / −2

Item 1. Business

Business — how the company describes what it does

124 edited+154 added−242 removed94 unchanged

2024 filing

2025 filing

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Fair value information for each of these instruments as well as other balances of the Company are as follows: ● Cash and cash equivalents, accounts payable, and accrued expenses approximate their fair value based on the short-term nature of these instruments. ● Accounts receivable are presented net of an allowance for estimated credit losses, which approximates fair value. ● The carrying value of lease liabilities approximates fair value due to the implicit discount rates used in the determination of the lease liabilities being consistent with the Company’s incremental borrowing rates at the time of lease inception and accounting for the duration of the leases. ● Long-term debt and related party debt, including the debt that has undergone troubled debt restructuring, is carried at amortized cost, dictated by the prevailing market interest rates at the time of each transaction in accordance with ASC Topic 470, Debt (“ASC 470”). ● The Company’s warrant liabilities are marked-to-market each reporting period with the changes in fair value of warrant liabilities recorded in other income (expense), net in the accompanying consolidated statements of operations until the warrants are exercised.

Fair value information for each of these instruments as well as other balances of the Company are as follows: ● Cash and cash equivalents, accounts payable, and accrued expenses approximate their fair value based on the short-term nature of these instruments. ● Accounts receivable are presented net of an allowance for estimated credit losses, which approximates fair value. ● The carrying value of lease liabilities approximates fair value due to the implicit discount rates used in the determination of the lease liabilities being consistent with the Company’s incremental borrowing rates at the time of lease inception and accounting for the duration of the leases. ● Long-term debt and related party debt, including the debt that has undergone troubled debt restructuring, is carried at amortized cost, dictated by the prevailing market interest rates at the time of each transaction in accordance with ASC Topic 470, Debt (“ASC 470”). ● The Company’s warrant liabilities are marked-to-market for each reporting period with the changes in fair value of warrant liabilities recorded in other income (expense), net in the accompanying consolidated statements of operations until the warrants are exercised.

Accordingly, the Warrants are precluded from being classified within equity and classified as a liability with subsequent changes in fair value recognized each reporting period in earnings. The fair value of the Related Party Pre-Funded Warrants on the issuance date was $5,600,334 determined as the intrinsic value.

Accordingly, the Related Party Pre-Funded Warrants are precluded from being classified within equity and classified as a liability with subsequent changes in fair value recognized each reporting period in earnings. The fair value of the Related Party Pre-Funded Warrants on the issuance date was $5,600,334 determined as the intrinsic value.

As a result of the warrant amendments and the subsequent issuance of 189,645 shares of Common Stock to Ionic at an effective purchase price of $2.109 per share of Common Stock, the number of shares of Common Stock underlying the Related Party Pre-Funded Warrant held by CP was adjusted to 5,452,288 and the number of shares of Common Stock underlying the Related Party Pre-Funded Warrant held by GIC Acquisition was adjusted to 1,085,122.

As a result of the warrant amendments and the subsequent issuance of 189,645 shares of Common Stock to Ionic at an effective purchase price of $2.109 per share of Common Stock, the number of shares of Common Stock underlying the Related Party Pre-Funded Warrant held by CP Acquisitions was adjusted to 5,452,288 and the number of shares of Common Stock underlying the Related Party Pre-Funded Warrant held by GIC Acquisition was adjusted to 1,085,122.

On August 30, 2024, CP partially exercised its Pre-Funded Warrant and entities affiliated with Raymond Chang and I-Tseng Jenny Chan received an aggregate of 383,127 shares of Common Stock upon the exercise. On September 27, 2024, the Company executed an amendment to the Related Party Pre-Funded Warrants to remove the Adjustment Provisions.

On August 30, 2024, CP Acquisitions partially exercised its Pre-Funded Warrant and entities affiliated with Raymond Chang and I-Tseng Jenny Chan received an aggregate of 383,127 shares of Common Stock upon the exercise. On September 27, 2024, the Company executed an amendment to the Related Party Pre-Funded Warrants to remove the Adjustment Provisions.

Two of Bowdoin’s subcontractors, Hannon Electric, Inc. and Electric Supply Center Corp, have filed separate suits against Agrify in the amount of $1.498 million and $93 thousand, respectively. These amounts are part of the $7.0 million claimed in Bowdoin’s Complaint. The Bowdoin suit and the subcontractor suits have been consolidated. The Company has denied liability in all such suits.

Two of Bowdoin’s subcontractors, Hannon Electric, Inc. and Electric Supply Center Corp, have filed separate suits against the Company in the amount of $1.498 million and $93 thousand, respectively. These amounts are part of the $7.0 million claimed in Bowdoin’s Complaint. The Bowdoin suit and the subcontractor suits have been consolidated. The Company has denied liability in all such suits.

On December 12, 2024, the Company acquired certain assets from Double or Nothing, LLC (“Double or Nothing”), the owner and creator of the Señorita brand of hemp-derived drinks as part of the Company’s strategic plan to reposition itself as a distributor of hemp-derived beverages (and similar products).

Known for its clean, fresh taste and commitment to high-quality, natural ingredients, Señorita offers a low-sugar, low-calorie alternative to alcoholic beverages and is available at top retailers including Total Wine, ABC Fine Wine & Spirits, and Binny’s in nine U.S. states and Canada, with plans for expansion and future availability in premier on-premises destinations.

Known for its clean, fresh taste and commitment to high-quality, natural ingredients, Señorita offers a low-sugar, low-calorie alternative to alcoholic beverages and is available at top retailers including Total Wine, ABC Fine Wine & Spirits, and Binny’s in eleven U.S. states and Canada, with plans for expansion and future availability in premier on-premises destinations.

On February 9, 2022, a former sales Vice President of the Company filed suit against the Company claiming he is owed back wages, commission and is entitled to equity in the company, under theories of liability under Massachusetts labor laws including retaliation, breach of contract, breach of covenant of good faith and fair dealing, fraudulent inducement, tortious interference and unjust enrichment.

Labor Law Dispute On February 9, 2022, a former sales Vice President of the Company filed suit against the Company claiming he is owed back wages, commission and is entitled to equity in the company, under theories of liability under Massachusetts labor laws including retaliation, breach of contract, breach of covenant of good faith and fair dealing, fraudulent inducement, tortious interference and unjust enrichment.

Diluted loss/income per share adjusts basic loss per share for the potentially dilutive impact of convertible notes, stock options, restricted stock units and warrants.

Diluted loss per share adjusts basic loss per share for the potentially dilutive impact of convertible notes, stock options, restricted stock units and warrants.

Net loss per share, assuming dilution, is equal to basic net loss per share for the years ended December 31, 2024 and 2023 because the effect of dilutive securities outstanding during the periods, including convertible notes, options, restricted stock units and warrants computed using the treasury stock method, is anti-dilutive.

Net loss per share, assuming dilution, is equal to basic net loss per share for the years ended December 31, 2025 and 2024 because the effect of dilutive securities outstanding during the periods, including convertible notes, options, restricted stock units and warrants computed using the treasury stock method, is anti-dilutive.

This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying Common Stock, expected option life, and expected volatility in the market value of the underlying Common Stock. No stock options were granted during the years ended December 31, 2024 and 2023.

As the Company has reported losses for the years ended December 31, 2024 and 2023, all potentially dilutive securities including convertible notes, stock options, restricted stock units and warrants, are anti-dilutive, and accordingly, basic net loss per share equals diluted net loss per share for those periods.

As the Company has reported losses for the years ended December 31, 2025 and 2024, all potentially dilutive securities including convertible notes, stock options, restricted stock units and warrants, are anti-dilutive, and accordingly, basic net loss per share equals diluted net loss per share for those periods.

Goodwill Goodwill is defined as the excess of cost over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is tested for impairment annually, and more frequently if events and circumstances indicate that the asset might be impaired.

F-11 Goodwill Goodwill is defined as the excess of cost over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is tested for impairment annually, and more frequently if events and circumstances indicate that the asset might be impaired.

The standard will require disclosures about significant segment expense categories and amounts for each reportable segment, for all periods presented. Additionally, the standard requires public entities to disclose the title and position of the Chief Operating Decision Maker (“CODM”) in the consolidated financial statements.

The standard requires disclosures about significant segment expense categories and amounts for each reportable segment, for all periods presented. Additionally, the standard requires public entities to disclose the title and position of the Chief Operating Decision Maker (“CODM”) in the consolidated financial statements.

The operating results of the Cultivation Business were reported as a net loss from discontinued operations in the consolidated statements of operations through December 31, 2024, the date of disposition, and were considered material. The net loss from discontinued operations for the period ended December 31, 2023 represents the Cultivation Business’ operating results from the prior year.

The operating results of the Cultivation Business were reported as a net loss from discontinued operations in the consolidated statements of operations through December 31, 2025, the date of disposition, and were considered material. The net loss from discontinued operations for the period ended December 31, 2024 represents the Cultivation Business’ operating results from the prior year.

Additionally, prior to its sale on December 31, 2024, our proprietary micro-environment-controlled Agrify Vertical Farming Units (“VFUs”) enabled cultivators to produce high quality products for the cannabis industry. The Company was formed in the State of Nevada on June 6, 2016 as Agrinamics, Inc., and subsequently changed its name to Agrify Corporation.

Additionally, prior to its sale on December 31, 2024, the Company’s proprietary micro-environment-controlled Agrify Vertical Farming Units (“VFUs”) enabled cultivators to produce high quality products for the cannabis. The Company was formed in the State of Nevada on June 6, 2016 as Agrinamics, Inc., and subsequently changed its name to Agrify Corporation.

Convertible Notes Payable The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with ASC 815.

F-12 Convertible Notes Payable The Company evaluates its convertible instruments to determine if those contracts or embedded components of those contracts qualify as derivative financial instruments to be separately accounted for in accordance with ASC 815.

The fair value of the warrant liabilities are estimated using a Black-Scholes option-pricing model. ● As detailed in Note 12 - Stockholders’ Equity (Deficit), during the year ended December 31, 2024, the Company amended Pre-Funded Warrants that had been issued to a related party such that they again became liability classified.

The fair value of the warrant liabilities are estimated using a Black-Scholes option-pricing model. ● As detailed in Note 14 - Stockholders’ Equity, during the year ended December 31, 2024, the Company amended Pre-Funded Warrants that had been issued to a related party such that they again became liability classified.

Our effective tax rate will change from quarter to quarter based on recurring and non-recurring factors including, but not limited to, the geographical mix of earnings, enacted tax legislation, and state and local income taxes.

Our effective tax rate may change from quarter to quarter based on recurring and non-recurring factors including, but not limited to, the geographical mix of earnings, enacted tax legislation, and state and local income taxes.

The lease term was determined assuming the exercise of options that were reasonably certain to occur. Leases with an original lease term of 12 months or less at inception were not reflected in the Company’s consolidated balance sheet and those lease costs are expensed on a straight-line basis over the respective term.

The lease term was determined by assuming the exercise of options that were reasonably certain to occur. Leases with an original lease term of 12 months or less at inception are not reflected in the Company’s consolidated balance sheets and those lease costs are expensed on a straight-line basis over the respective term.

The following table summarizes the activity related to our unrecognized tax benefits (in thousands): (In thousands) Year ended December 31, 2024 Unrecognized benefit – beginning of period $ — Prior period tax position increases 1,100 Current period tax position increases 91 Unrecognized benefit – end of period $ 1,191 Our policy is to recognize interest and penalties related to income taxes as components of interest expense and other expense, respectively.

The following table summarizes the activity related to our unrecognized tax benefits (in thousands): Year ended December 31, 2025 Unrecognized benefit – beginning of period $ 1,191 Prior period tax position increases (decreases) $ - Current period tax position increases (decreases) $ (91 ) Unrecognized benefit – end of period $ 1,100 Our policy is to recognize interest and penalties related to income taxes as components of interest expense and other expense, respectively.

Note 18 — Commitments and Contingencies Legal Matters From time to time, the Company may become involved in material legal proceedings or be subject to claims arising in the ordinary course of our business.

Note 23 — Commitments and Contingencies Legal Matters From time to time, the Company may become involved in material legal proceedings or be subject to claims arising in the ordinary course of our business.

The reverse stock splits had no impact on the number of shares of Common Stock that the Company is authorized to issue pursuant to its articles of incorporation or on the par value per share of the Common Stock.

The reverse stock split had no impact on the number of shares of Common Stock that the Company is authorized to issue pursuant to its articles of incorporation or on the par value per share of the Common Stock.

Due to the nature of the Company’s contracts, these reporting requirements are not applicable because the majority of the Company’s remaining contracts meet certain exemptions as defined in ASC 606 through 606, including (i) performance obligation is part of a contract that has an original expected duration of one year or less and (ii) the right to invoice practical expedient.

Due to the nature of the Company’s contracts, these reporting requirements are not applicable because the majority of the Company’s remaining contracts meet certain exemptions as defined in ASC 606-10-50-14 through 606-10-50-14A, including (i) performance obligation is part of a contract that has an original expected duration of one year or less and (ii) the right to invoice practical expedient.

In the normal course of business, the Company is subject to examinations by federal, foreign, and state and local jurisdictions, where applicable. There are currently no pending tax examinations. The Company’s tax years are still open under statute from 2019 to the present in the U.S. and from 2019 to present in the Company’s foreign operations.

As required by the uncertain tax position guidance in ASC Topic 740 (“ASC 740”), Income Tax the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

As required by the uncertain tax position guidance in ASC 740, Income Tax the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit.

We incurred no interest or penalties related to unrecognized tax benefits in the years ended December 31, 2024 or 2023. We do not anticipate any significant changes in our uncertain tax positions within twelve months of this reporting date.

We incurred no interest or penalties related to unrecognized tax benefits for the years ended December 31, 2025 or 2024. We do not anticipate any significant changes in our uncertain tax positions within twelve months of this reporting date.

On an ongoing basis, the Company evaluates estimates, which include estimates related to accruals, stock-based compensation expense, reported amounts of revenues during the reported period, fair value of warrant liabilities, sales tax liabilities, valuation of deferred tax assets, net realizable value of inventory and collectability of trade accounts, intangible assets, goodwill, and litigation.

As the sale of the Cultivation Business represented a strategic shift that will have a major effect on the Company’s operations and financial results, they have been presented in discontinued operations in accordance with ASC 205, Presentation of Financial Statements, separate from continuing operations for the years ended December 31, 2024 and 2023, as applicable.

As the sale of the Cultivation Business and the exit of the Extraction Business represented a strategic shift that will have a major effect on the Company’s operations and financial results, they have been presented in discontinued operations in accordance with ASC 205, Presentation of Financial Statements , separate from continuing operations for the years ended December 31, 2025 and 2024, as applicable.

Related Party Warrant Issuance On May 21, 2024, in connection with the Consolidated Note Amendment, the Company issued 492,204 and 525,114 Pre-Funded Warrants to GIC Acquisitions and CP (the “Related Party Pre-Funded Warrants”), respectively, in exchange of notes payable amounting approximately to $2.29 million and $11.5 million, respectively.

Related Party Warrant Issuance On May 21, 2024, in connection with the amendment of previously outstanding notes, the Company issued 492,204 and 525,114 Pre-Funded Warrants to GIC Acquisitions and CP (the “Related Party Pre-Funded Warrants”), respectively, in exchange of notes payable amounting approximately to $2.29 million and $11.5 million, respectively.

Stock-Based Compensation The Company measures all stock options and other stock-based awards granted to employees, directors and consultants based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. Forfeitures are recognized as incurred.

Stock-Based Compensation The Company measures restricted stock units and stock options awards granted to employees, directors and consultants based on the fair value on the date of the grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. Forfeitures are recognized as incurred.

The measurement of fair value of the Placement Agents Warrants were determined utilizing a Black-Scholes model considering all relevant assumptions as of the date of issuance (i.e., share price of $7.80, exercise price of $5.70, term of five years, volatility of 128%, risk-free rate of 4.32%, and expected dividend rate of 0%).

The measurement of fair value of the Placement Agents Warrants was determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $7.80, exercise price of $5.70, term of five years, volatility of 128%, risk-free rate of 4.32%, and expected dividend rate of 0%).

All share and per share information included in this Annual Report on Form 10-K has been retroactively adjusted to reflect the impact of these reverse stock splits.

All share and per share information included in this Annual Report on Form 10-K has been retroactively adjusted to reflect the impact of this reverse stock split.

Note 13 — Stock-Based Compensation and Employee Benefit Plans 2022 Omnibus Equity Incentive Plan On April 29, 2022, the Company’s Board of Directors, and on June 8, 2022, the Company’s stockholders, adopted and approved the 2022 Omnibus Equity Incentive Plan (the “2022 Plan”), which provides for the grant of stock options, stock appreciation right awards, performance share awards, restricted stock awards, restricted stock unit awards, other stock-based awards and cash-based awards.

Note 15 — Stock-Based Compensation 2022 Omnibus Equity Incentive Plan On April 29, 2022, the Company’s Board of Directors, and on June 8, 2022, the Company’s stockholders, adopted and approved the 2022 Omnibus Equity Incentive Plan (the “2022 Plan”), which provides for the grant of stock options, stock appreciation right awards, performance share awards, restricted stock awards, restricted stock unit awards, other stock-based awards and cash-based awards.

Under the Purchase Agreement, CP acquired assets from the Company relating to the Company’s Vertical Farming Units (“VFUs”), including the related Agrify total-turnkey (“TTK”) solution assets and Agrify Insights TM software solutions (collectively the “Cultivation Business”). The sale of the Cultivation Business occurred following signing on December 31, 2024.

Under the Purchase Agreement, CP acquired assets from the Company relating to the Company’s VFUs, including the related Agrify total-turnkey (“TTK”) solution assets and Agrify Insights TM software solutions (collectively the “Cultivation Business”). The sale of the Cultivation Business occurred following signing on December 31, 2024.

Litigation On February 22, 2023, Bowdoin Construction Corp. (“Bowdoin”) filed a complaint in the Superior Court of Massachusetts in Norfolk County, Massachusetts, naming the Company (the “Bowdoin Complaint”), Bud & Mary’s and certain related parties as defendants, captioned Bowdoin Construction Corp. v. Agrify Corporation, Bud & Mary’s Cultivation, Inc. and BMLC2, LLC, case no. 2382CV00173.

(“Bowdoin”) filed a complaint in the Superior Court of Massachusetts in Norfolk County, Massachusetts (the “Bowdoin Complaint”), naming the Company, Bud & Mary’s and certain related parties as defendants, captioned Bowdoin Construction Corp. v. Agrify Corporation, Bud & Mary’s Cultivation, Inc. and BMLC2, LLC, case no. 2382CV00173.

The Placement Agents Warrants will be exercisable on a cash basis, unless there is not an effective registration statement covering the issuance of the shares issuable upon exercise of the Placement Agents Warrants or if shareholder approval for the full exercise of the Placement Agents Warrants are not received, in which case the Placement Agents Warrants will also be exercisable on a cashless exercise basis at Alexander Capital’s election.

The Placement Agents Warrants were exercisable on a cash basis, unless there was not an effective registration statement covering the issuance of the shares issuable upon exercise of the Placement Agents Warrants or if shareholder approval for the full exercise of the Placement Agents Warrants was not received, in which case the Placement Agents Warrants would also be exercisable on a cashless exercise basis at Alexander Capital’s election.

F-6 Common Stock Preferred Stock Preferred A Stock Additional Paid-in- Accumulated Total Stockholders’ Equity (Deficit) attributable Non- Controlling Total Stockholders’ Equity Shares Amount Shares Amount Shares Amount Capital Deficit to Agrify Interests (Deficit ) Balance at January 1, 2024 113,416 $ — — $ — — $ — $ 250,857 $ (265,797 ) $ (14,940 ) $ 230 $ (14,710 ) Stock-based compensation — — — — — — 1,165 — 1,165 — 1,165 Issuance of Common Stock and Pre-Funded Warrants through public offering 184,000 — — — — — 2,123 — 2,123 — 2,123 Issuance of held-back shares from Sinclair acquisition 39 — — — — — — — — — — Cashless exercise of High Trail Warrants 208,814 — — — — — — — — — — Issuance of vested RSUs, net of shares held back to offset tax 71 — — — — — — — — — — Exercise of Pre-Funded Warrants 647,373 — — — — — 1,355 — 1,355 — 1,355 Issuance of common shares (IONIC Stock Subscription Payable) 189,645 — — — — — 345 — 345 — 345 Exercise of liability classified warrants, net of forfeitures 52,681 — — — — — 1,680 — 1,680 — 1,680 Exercise of Placement Agent Warrants 4,482 — — — — — 26 — 26 — 26 Issuance of Common Stock in connection with private placement, net 203,988 1 — — — — 25,792 — 25,793 — 25,793 Senorita Acquisition 97,300 — — — — — 18,836 — 18,836 — 18,836 Issuance of vested RSUs 72,397 — — — — — — — — — — Stock split share adjustment (283 ) 1 — — — — (1 ) — — — — Deemed Contribution from troubled debt restructuring with related party — — — — — — 676 — 676 — 676 Issuance of equity classified Pre-Funded Warrants — — — — — — 6,791 — 6,791 — 6,791 Excess of related party debt and Pre-Funded Warrants conversion — — — — — — 10,044 — 10,044 — 10,044 Conversion of related party debt into Pre-Funded Warrants — — — — — — 13,980 — 13,980 — 13,980 Conversion of Convertible Note 178,109 — — — — — 1,731 — 1,731 — 1,731 Net loss — — — — — — — (41,746 ) (41,746 ) — (41,746 ) Balance December 31, 2024 1,952,032 $ 2 — $ — — $ — $ 335,400 $ (307,543 ) $ 27,859 $ 230 $ 28,089 The accompanying notes are an integral part of these consolidated financial statements.

(Formerly known as Agrify Corporation) CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (In thousands, except share and per share data) Common Stock Additional Paid-In- Accumulated Total Stockholders’ Equity Shares Amount Capital Deficit (Deficit) Balance at January 1, 2024 113,416 $ — $ 250,857 $ (265,567 ) $ (14,710 ) Issuance of Common Stock in connection with private placement, net 203,988 1 25,792 — 25,793 Senorita Acquisition 97,300 — 18,836 — 18,836 Conversion of related party debt into Pre-Funded Warrants — — 13,980 — 13,980 Excess of related party debt and Pre-Funded Warrants conversion — — 10,044 — 10,044 Issuance of equity classified Pre-Funded Warrants — — 6,791 — 6,791 Issuance of Common Stock and Pre-Funded Warrants through public offering 184,000 — 2,123 — 2,123 Conversion of Convertible Note 178,109 — 1,731 — 1,731 Exercise of liability classified warrants, net of forfeitures 52,681 — 1,680 — 1,680 Exercise of Pre-Funded Warrants 647,373 — 1,355 — 1,355 Stock-based compensation — — 1,165 — 1,165 Contribution from troubled debt restructuring with related party — — 676 — 676 Issuance of common shares (IONIC Stock Subscription Payable) 189,645 — 345 — 345 Exercise of Placement Agent Warrants 4,482 — 26 — 26 Stock split share adjustment (283 ) 1 (1 ) — — Cashless exercise of High Trail Warrants 208,814 — — — — Issuance of vested RSUs 72,397 — — — — Issuance of vested RSUs, net of shares held back to offset tax 71 — — — — Issuance of held-back shares from Sinclair acquisition 39 — — — — Net loss — — — (41,746 ) (41,746 ) Balance at December 31, 2024 1,952,032 $ 2 $ 335,400 $ (307,313 ) $ 28,089 The accompanying notes are an integral part of these consolidated financial statements.

The Placement Agents Warrants have a five-year term and exercise price of 100% of the offering price, and are subject to adjustment for stock splits, reverse stock splits, stock dividends, and similar transactions.

The Placement Agents Warrants had a five-year term and exercise price of 100% of the offering price, and were subject to adjustment for stock splits, reverse stock splits, stock dividends, and similar transactions.

Therefore, the weighted-average number of shares of Common Stock outstanding used to calculate both basic and diluted net loss per share attributable to holders of the Company’s Common Stock is the same.

The weighted-average number of shares of Common Stock outstanding used to calculate both basic and diluted net loss per share attributable to Common Stockholders is the same.

However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. F-42 AGRIFY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Bud & Mary’s Litigation On September 15, 2022, the Company provided a notice of default to Bud & Mary’s Cultivation, Inc.

However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Bud & Mary’s Litigation On September 15, 2022, the Company provided a notice of default to Bud & Mary’s Cultivation, Inc.

The Company charges maintenance and repairs to expense as incurred. When the Company retires or disposes of assets, the carrying cost of these assets and related accumulated depreciation or amortization are eliminated from the consolidated balance sheets and any resulting gain or loss is included in the consolidated statements of operations in the period of retirement or disposal.

When the Company retires or disposes of assets, the carrying cost of these assets and related accumulated depreciation or amortization are eliminated from the consolidated balance sheets and any resulting gain or loss is included in the consolidated statements of operations in the period of retirement or disposal.

The Señorita brand offers consumers hemp-derived tetrahydrocannabinol (“THC”) beverages that mirror well-known cocktails like a margarita – in four flavors – classic Lime Jalapeño Margarita, Mango Margarita, Paloma and Ranch Water.

Basis of Presentation and Principles of Consolidation Accounting for Wholly-Owned Subsidiaries The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of Agrify Corporation and its wholly-owned subsidiaries, as described above, in accordance with the provisions required by the Consolidation Topic 810 (“ASC 810”) of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”).

Note 2 — Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of RYTHM and its wholly-owned subsidiaries, as described above, in accordance with the provisions required by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) the Consolidation Topic 810 (“ASC 810”).

F-33 AGRIFY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company issued 4,482 warrants to purchase Common Stock to Alexander Capital (the “Placement Agents Warrants”). The Placement Agents Warrants were classified as equity and recorded under additional paid-in capital in the consolidated balance sheets.

The Company issued 4,482 warrants to purchase Common Stock to Alexander Capital (the “Placement Agents Warrants”). The Placement Agents Warrants were classified as equity warrants and recorded under additional paid-in capital in the consolidated balance sheets.

F-34 AGRIFY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On August 12, 2024, the stockholders of the Company approved a proposal to amend the Related Party Pre-Funded Warrants to add the Adjustment Provisions at a future date. Pursuant to that approval, on August 28, 2024, the Company entered into amendments to the Related Party Pre-Funded Warrants to insert the Adjustment Provisions.

F-25 On August 12, 2024, the stockholders of the Company approved a proposal to amend the Related Party Pre-Funded Warrants to add the Adjustment Provisions at a future date. Pursuant to that approval, on August 28, 2024, the Company entered into amendments to the Related Party Pre-Funded Warrants to insert the Adjustment Provisions.

The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectation of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.

The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative pre-tax income or loss in recent history, expectation of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.

During the year ended December 31, 2024, the Company performed a qualitative analysis for its goodwill impairment test.

During the years ended December 31, 2025 and 2024, the Company performed a qualitative analysis for its goodwill impairment test.

Net loss per share calculations for all periods have been adjusted to reflect the reverse stock splits effected on July 5, 2023 and October 8, 2024. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, to provide enhanced segment disclosures.

Net loss per share calculations for the year ended December 31, 2024 have been adjusted to reflect the reverse stock splits effected on October 8, 2024. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, to provide enhanced segment disclosures.

This matter is subject to the Cultivation sale escrow litigation reserve agreement where the Company was required to fund $1.5 million in January 2025 into escrow for the benefit of settling this and other claims.

This matter is subject to the sale of the Cultivation Business escrow litigation reserve agreement where the Company funded $1.5 million in January 2025 into escrow for the benefit of settling this and other claims. McCutchan, Inc.

As of December 31, 2024, future minimum principal payments on all debt positions, excluding accrued interest amounts, were as follows: Years ending December 31 (In thousands) 2025 $ 10,522 Total future payments $ 10,522 Note 11 — Leases The determination if any arrangement contained a lease at its inception was done based on whether or not the Company has the right to control the asset during the contract period.

As of December 31, 2025, future minimum principal payments on all debt positions, excluding accrued interest amounts, were as follows: Years ending December 31 (In thousands) 2026 $ 30,621 2027 50,000 Total future payments $ 80,621 Note 11 — Leases The determination as to whether any arrangement contained a lease at its inception was performed based on whether or not the Company has the right to control the asset during the contract period.

F-16 AGRIFY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC Topic 740, Income Taxes (“ASC 740”), which requires, among other things, an asset and liability approach to calculating deferred income taxes.

F-15 Income Taxes The Company accounts for income taxes pursuant to the provisions of ASC Topic 740, Income Taxes (“ASC 740”), which requires, among other things, an asset and liability approach to calculating deferred income taxes.

Net Loss Per Share The Company presents basic and diluted net loss per share attributable to holders of the Company’s Common Stock in conformity with the one-class method. The Company computes basic loss per share by dividing net loss available to Common Stockholders by the weighted-average number of Common Stock outstanding.

F-16 Net Loss Per Share The Company presents basic and diluted net loss per share in conformity with the one-class method. The Company computes basic loss per share by dividing net loss by the weighted-average number of Common Stock outstanding.

Any fractional shares in connection with these reverse stock splits were rounded up to the nearest whole share and no stockholders received cash in lieu of fractional shares.

No fractional shares of Common Stock were issued as a result of this reverse stock split. Any fractional shares in connection with this reverse stock splits were rounded up to the nearest whole share and no stockholders received cash in lieu of fractional shares.

F-13 AGRIFY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For issued or modified warrants that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance.

For issued or modified warrants that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance.

Federal net operating loss (“NOL”) carryforwards generated after tax year 2021 are subject to an 80% limitation on taxable income, do not expire and will carryforward indefinitely. State net operating loss carryforwards in the amount of $115.8 million begin expiring in 2039 and approximately $12.8 million have an indefinite life.

Federal net operating loss carryforwards in the amount of $48.5 million have an indefinite life. Federal NOL carryforwards generated after tax year 2021 are subject to an 80% limitation on taxable income, do not expire and will carryforward indefinitely.

The assets and liabilities related to the Cultivation Business have been separately classified in the accompanying consolidated balance sheet as of December 31, 2023.

The assets and liabilities related to the Extraction Business have been separately classified in the accompanying consolidated balance sheets as of December 31, 2025 and December 31, 2024.

The results of the Cultivation Business is presented as discontinued operations in the Consolidated Statements of Operations and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of the Cultivation Business to discontinued operations in the Consolidated Balance Sheet as of December 31, 2023.

The results of the Cultivation Business are presented as discontinued operations in the consolidated statements of operations and, as such, have been excluded from continuing operations. Further, the Company reclassified the assets and liabilities of the Cultivation Business associated with discontinued operations in the consolidated balance sheets as of December 31, 2025 and December 31, 2024.

Bifurcated embedded conversion options, variable-share settlement features, and any related freestanding instruments are recorded as a discount to the host instrument which is amortized to interest expense over the life of the respective note using the effective interest method.

F-17 AGRIFY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Recently Announced Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid.

For further discussion, refer to Note 6. Cash and Cash Equivalents Cash and cash equivalents consist principally of cash and deposits with maturities of three months or less as of December 31, 2024 and December 31, 2023. All cash equivalents are carried at cost, which approximates fair value.

For further discussion, refer to Note 17 included elsewhere in the notes to the consolidated financial statements. Cash and Cash Equivalents Cash and cash equivalents consist principally of cash and deposits with original maturities of three months or less as of December 31, 2025 and December 31, 2024. All cash equivalents are carried at cost, which approximates fair value.

Leases with a term greater than 12 months were reflected as non-current right-of-use assets and current and non-current lease liabilities in the Company’s consolidated balance sheets.

Leases with a term greater than 12 months are reflected as non-current right-of-use assets and current and non-current lease liabilities in the Company’s consolidated balance sheets. As of December 31, 2025 and 2024, the Company had no active finance leases.

F-14 AGRIFY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, marketable securities, accounts receivable, contingent considerations, long-term debt, related party debt, and warrant liabilities.

F-13 Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, marketable securities, accounts receivable, contingent considerations, long-term debt, related party debt, and warrant liabilities. Refer to Note 12 - Fair Value Measures, included elsewhere in the notes to the consolidated financial statements for details of the Company’s financial instruments.

This matter is subject to the Cultivation sale escrow litigation reserve agreement where the Company funded $1.5 million in January 2025 into escrow for the benefit of settling this and other claims. F-34 Bowdoin Construction Corp. Litigation On February 22, 2023, Bowdoin Construction Corp.

F-39 AGRIFY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following items comprise the Company’s net deferred tax assets and liabilities as of December 31, 2024 and December 31, 2023: (In thousands) December 31, 2024 December 31, 2023 Deferred tax assets: Net operating loss carryforward $ 48,662 $ 35,491 Accruals, reserves, and other 4,422 11,559 Stock-based compensation 442 706 Research and development tax credit carryforward — — Lease liability 126 464 Fixed assets 116 246 Intangible assets 3,475 3,104 Capitalized sec. 174 R&E 1,731 2,068 Credits 1,221 — Uncertain tax positions (1,221 ) — Total Deferred Tax Asset 58,974 53,638 Valuation allowance (58,852 ) (53,219 ) Deferred income tax assets, net of Valuation Allowance 122 419 Deferred tax liabilities: Right-of-Use Asset (122 ) (419 ) Total Deferred Tax Liability (122 ) (419 ) Net Deferred Tax Asset/(Liability) $ — $ — The Company continually evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is more likely than not.

The following items comprise the Company’s net deferred tax assets and liabilities as of December 31, 2025 and December 31, 2024: (In thousands) December 31, 2025 December 31, 2024 Deferred tax assets: Net operating loss carryforward $ 12,659 $ 48,662 Accruals, reserves, and other 2,725 4,422 Stock-based compensation 1,265 442 Lease liability 10 126 Fixed assets — 116 Intangible assets 5,589 3,475 Capitalized sec. 174 R&E 1,221 1,731 Credits 1,100 1,221 Uncertain tax positions (1,100 ) (1,221 ) Total Deferred Tax Asset 23,469 58,974 Valuation allowance (23,465 ) (58,852 ) Deferred income tax assets, net of Valuation Allowance 4 122 Deferred tax liabilities: Right-of-Use Asset (4 ) (122 ) Amortization Total Deferred Tax Liability (4 ) (122 ) Net Deferred Tax Asset/(Liability) $ — $ — The Company continually evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is more likely than not.

The following table presents restricted stock unit activity under the 2022 Plan for the year ended December 31, 2024: Number of Shares Weighted- Average Grant Date Fair Value Unvested at January 1, 2023 513 $ 3,461.25 Granted — — Vested (161 ) 3,462.00 Forfeited (209 ) 3,462.00 Unvested at December 31, 2023 143 $ 3,462.00 Granted 238,874 9.60 Vested (85,921 ) 9.15 Forfeited (50,229 ) 7.05 Unvested at December 31, 2024 102,867 $ 17.42 As of December 31, 2024, total unrecognized compensation expense related to unvested restricted stock units was $1.4 million, which is expected to be recognized over a weighted average period of 0.74 years. 2022 Employee Stock Purchase Plan On April 29, 2022, the Company’s Board of Directors, and on June 8, 2022, the Company’s stockholders, adopted and approved the 2022 Employee Stock Purchase Plan (“ESPP”).

The following table presents restricted stock unit activity under the 2022 Plan for the year ended December 31, 2025: Number of Shares Weighted- Average Grant Date Fair Value Unvested at January 1, 2024 143 $ 3,461.25 Granted 238,874 9.60 Vested (85,921 ) 9.15 Forfeited (50,229 ) 7.05 Unvested at December 31, 2024 102,867 $ 17.42 Granted 129,250 37.80 Vested (91,258 ) 19.66 Forfeited (14,109 ) 4.57 Unvested at December 31, 2025 126,750 $ 38.08 As of December 31, 2025, total unrecognized compensation expense related to unvested restricted stock units was $4.1 million, which is expected to be recognized over a weighted average period of 1.5 years.

Write-offs of potentially slow-moving or damaged inventory are recorded through specific identification of obsolete or damaged material. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization.

Write-offs of potentially slow-moving, damaged, or expiring inventory are recorded through specific identification of expired or damaged material. The Company takes a physical inventory count at least annually at all significant inventory locations. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization.

The Green Thumb Note will mature on November 5, 2025 and has a 10.0% annualized interest rate, with interest to be paid on the first calendar day of each September and March while the Green Thumb Note is outstanding, in cash, beginning January 1, 2025. The principal amount of the Green Thumb Note will be payable on the maturity date.

The August 2025 Notes will mature on February 25, 2027 and accrue interest at a 10.0% annualized rate, with interest to be paid on the first calendar day of each September and March, while the August 2025 Notes are outstanding beginning March 1, 2026. The principal amount of the August 2025 Notes will be payable on the maturity date.

Cash deposits with financial institutions generally exceed federally insured limits. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts.

Cash equivalents primarily consist of money market funds with original maturities of three months or less, which are invested primarily with U.S. financial institutions. Cash deposits with financial institutions generally exceed federally insured limits. Management believes minimal credit risk exists with respect to these financial institutions and the Company has not experienced any losses on such amounts.

The total amount of unrecognized tax benefits at December 31, 2024 is $1.2 million. If recognized, none of the unrecognized tax benefits would impact our effective tax rate.

Our unrecognized tax benefits at December 31, 2025 relate entirely to research and development tax credits. The total amount of unrecognized tax benefits at December 31, 2025 is $1,100. If recognized, none of the unrecognized tax benefits would impact our effective tax rate.

Level 3: Unobservable inputs for which there is little or no market data which require the Company to develop its own assumptions about how market participants would price the asset or liability.

Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar instruments in active markets or for similar markets that are not active. Level 3: Unobservable inputs for which there is little or no market data which require the Company to develop its own assumptions about how market participants would price the asset or liability.

They were remeasured to their fair value upon modification resulting in an increase to the fair value of $18,392,143. The fair value as of September 27, 2024 of $20,770,707 was reclassified to equity. During the year ended December 31, 2025, 120,723 warrants were issued in lieu of cash interest payments of $1.8 million.

The amounts determined for the Company’s right-of-use assets and lease liabilities generally do not assume that renewal options or early-termination provisions, if any, are exercised unless it is reasonably certain that the Company will exercise such options. Contract Liabilities Contract Liabilities includes amounts collected, billed in excess of revenue or customer deposits that the Company can recognize.

The amounts determined for the Company’s right-of-use assets and lease liabilities generally do not assume that renewal options or early-termination provisions, if any, are exercised unless it is reasonably certain that the Company will exercise such options. The Company did not have any leases as part of continuing operations as of years ended December 31, 2025 and 2024.

The Company excluded the following potential Common Stock equivalents presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to Common Stockholders for the periods indicated because including them would have had an anti-dilutive effect: Year Ended December 31, 2024 2023 Shares subject to outstanding stock options 210 664 Shares subject to unvested restricted stock units 102,867 142 Shares subject to outstanding warrants 7,576,573 358,687 7,679,650 359,493 Note 17 — Segment Reporting The Company operates in one consolidated segment.

The Company excluded the following potential Common Stock equivalents presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect: Year Ended December 31, 2025 2024 Shares subject to outstanding warrants 10,892,112 7,576,573 Shares subject to unvested restricted stock units 126,750 102,867 Shares subject to outstanding stock options 75 210 Total shares subject to potential common stock equivalents. 11,018,937 7,679,650 Note 21 — Related Parties Some of the current and former officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities that become available.

The grant date fair value of these Placement Agents Warrants was estimated to be $31 thousand on February 27, 2024, and is reflected within additional paid-in capital as of December 31, 2024.

The grant date fair value of these Placement Agents Warrants was estimated to be $31 thousand on February 27, 2024, and was originally recorded within additional paid-in capital. As the Placement Agents Warrants were exercised during the year ended December 31, 2024, the related amounts remain within equity as part of the total proceeds from the issuance of Common Stock.

Reclassifications The Company effected a 1-for-20 reverse stock split of its Common Stock on July 5, 2023 and a 1-for-15 reverse stock split of its Common Stock on October 8, 2024. All share and per share information has been retroactively adjusted to give effect to the reverse stock split for all periods presented unless otherwise indicated.

We began recognizing licensing revenue under this agreement in November 2025. Reverse Stock Splits On October 8, 2024, the Company effected a 1-for-15 reverse stock split of its Common Stock. All share and per share information has been retroactively adjusted to give effect to the reverse stock splits for the year ended December 31, 2024, unless otherwise indicated.

F-41 AGRIFY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 16 — Net Loss Per Share Net loss per share calculations for all periods have been adjusted to reflect the Company’s reverse stock splits. Net loss per share was calculated based on the weighted-average number of the Company’s Common Stock outstanding.

Note 20 — Net Loss Per Share Net loss per share calculations for the year ended December 31, 2024 have been adjusted to reflect the Company’s reverse stock split. Net loss per share was calculated based on the weighted-average number of the Company’s Common Stock outstanding.

Note 15 — Income Taxes For financial reporting purposes, the net pre-tax book income and/or loss from continuing and discontinued operations for the U.S. and foreign entities, in the aggregate, was: (In thousands) December 31, 2024 December 31, 2023 United States $ (41,746 ) $ (18,650 ) Foreign — — Total $ (41,746 ) $ (18,650 ) F-38 AGRIFY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Income tax expense (benefit) from continuing and discontinued operations consisted of the following for the years ended December 31, 2024 and December 31, 2023: (In thousands) December 31, 2024 December 31, 2023 Current: Federal $ — $ — State (2 ) 2 Foreign — — Subtotal (2 ) 2 Deferred: Federal — — State — — Foreign — — Subtotal — — Total $ (2 ) $ 2 The reconciliation between the Company’s effective tax rate on income from continuing operations discontinued operations and the statutory tax rate for the years ended December 31, 2024 and December 31, 2023 is as follows: (In thousands) December 31, 2024 December 31, 2023 Current tax at U.S. statutory rate $ (8,767 ) $ (3,925 ) Nondeductible/nontaxable items 3,336 (336 ) State taxes (872 ) (458 ) Rate change (717 ) 1,613 True-up and other 1,383 2,621 Valuation allowance 5,635 487 Income tax expense (benefit) $ (2 ) $ 2 Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Note 19 — Income Taxes For financial reporting purposes, the net pre-tax book income and/or loss for the U.S. and foreign entities, in the aggregate, was: (In thousands) December 31, 2025 December 31, 2024 United States (33,257 ) (41,746 ) Foreign — — Total (33,257 ) (41,746 ) Income tax expense consisted of the following for the years ended December 31, 2025 and December 31, 2024: (In thousands) December 31, 2025 December 31, 2024 Current: Federal $ — $ — State — (2 ) Foreign — — Subtotal — (2 ) Deferred: Federal $ — — State — — Foreign — — Subtotal — — Total $ — $ (2 ) F-30 The reconciliation between the Company’s effective tax rate on income from continuing operations and the statutory tax rate for the years ended December 31, 2025 and December 31, 2024 is as follows: December 31, 2025 December 31, 2024 (In thousands) $ % $ % Current tax at U.S. statutory rate (6,986 ) 21.01 % (8,767 ) 21.00 % Non-deductible loss on fair value of warrants — 0.00 % 3,759 -9.00 % Other nondeductible/nontaxable items (54 ) 0.16 % (423 ) 1.01 % Illinois taxes (997 ) 3.00 % — 0.00 % Other state taxes (749 ) 2.25 % (872 ) 2.09 % Rate change (597 ) 1.80 % (717 ) 1.72 % True-up and other (federal) 39,104 -117.58 % 1,383 -3.31 % True-up and other (state) 5,666 -17.04 % — 0.00 % Valuation allowance (federal) (31,209 ) 93.84 % 2,067 Valuation allowance (state) (4,178 ) 12.56 % 3,568 Income tax (expense) benefit $ — $ (2 ) Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The provision for income taxes represents Federal, state and local income taxes. The effective rate differs from statutory rates due to the effect of certain nondeductible expenses.

The provision for income taxes represents Federal, state and local income taxes. The effective rate differs from statutory rates due to the Company’s loss position and the valuation allowance offsetting deferred tax assets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

124 edited+45 added−50 removed110 unchanged

2024 filing

2025 filing

Biggest changeAny products we may produce or license that are intended to be Farm Bill compliant but exceed the limits of psychoactive material allowable under the Farm Bill could subject us to action by regulatory authorities and/or to lawsuits by consumers, which may have a material adverse effect on us and the trading price of our Common Stock. 13 Risks Relating to our Industry The 2018 Farm Bill, which federally legalized hemp and hemp products, could be amended to severely restrict or prohibit the Company’s hemp-derived THC products.

Biggest changeRisks Relating to our Industry The 2018 Farm Bill, which federally legalized hemp and hemp products, was amended in a way that would severely restrict or prohibit the Company’s hemp-derived THC products.

If we are unable to hire, assimilate and retain qualified personnel in the future, such inability could adversely affect our operations. We rely on third parties, including our largest shareholder, to provide numerous capabilities that we depend upon on to operate, and a disruption of these systems could adversely affect our business.

If we are unable to hire, assimilate and retain qualified personnel in the future, such inability could adversely affect our operations. We rely on third parties, including our largest shareholder, to provide numerous capabilities that we depend upon to operate, and a disruption of these systems could adversely affect our business.

Further, if we found it necessary to replace any such service provider, disruptions arising from the transition of functions to an alternative provider, or the costs developing our own functions if we were unable to find an alternate provider, may have a material adverse effect on our results of operations or financial condition.

Further, if we found it necessary to replace any such service provider, disruptions arising from the transition of functions to an alternative provider, or the costs of developing our own functions if we were unable to find an alternate provider, may have a material adverse effect on our results of operations or financial condition.

Hemp-derived products are federally illegal if they exceed 0.3% delta-9-THC on a dry weight basis. Hemp-derived products which exceed a delta-9 THC concentration of 0.3% on a dry weight basis are federally illegal under the Controlled Substances Act (the “CSA”).

Hemp-derived THC products are federally illegal if they exceed 0.3% delta-9-THC on a dry weight basis. Hemp-derived THC products which exceed a delta-9-THC concentration of 0.3% on a dry weight basis are federally illegal under the Controlled Substances Act (the “CSA”).

In addition, the approval of medical and recreational marijuana by many states has created a situation in which it may be difficult or impossible for regulators and courts to determine whether the delta-9-THC levels reflected in consumers’ blood tests are the result of hemp-derived products or marijuana products. This may result in regulatory actions or lawsuits.

In addition, the approval of medical and recreational marijuana by many states has created a situation in which it may be difficult or impossible for regulators and courts to determine whether the delta-9-THC levels reflected in consumers’ blood tests are the result of hemp-derived THC products or marijuana products. This may result in regulatory actions or lawsuits.

Due to our manufacturing and sale of our products, may also be subject to a variety of claims including product warranty, product liability, and consumer protection claims related to product defects, among other litigation. We may also be subject to claims involving health and safety, hazardous materials usage, other environmental impacts, or service disruptions or failures.

Due to our manufacturing and sale of our products, we may also be subject to a variety of claims including product warranty, product liability, and consumer protection claims related to product defects, among other litigation. We may also be subject to claims involving health and safety, hazardous materials usage, other environmental impacts, or service disruptions or failures.

States are passing their own laws regulating, restricting or prohibiting hemp-derived products, creating a difficult regulatory patchwork within which to operate. State and local authorities have been active over the last few years implementing their own laws regulating the cultivation, manufacturing, testing, marketing, and sale of both intoxicating and non-intoxicating hemp products. Some states ban these products altogether.

States are passing their own laws regulating, restricting, or prohibiting hemp-derived THC products, creating a difficult regulatory patchwork within which to operate. State and local authorities have been active over the last few years, implementing their own laws regulating the cultivation, manufacturing, testing, marketing, and sale of both intoxicating and non-intoxicating hemp products. Some states ban these products altogether.

Specifically, while we have banking relationships and believe that the services can be procured from other institutions, we may, in the future, have difficulty maintaining existing or securing new bank accounts or clearing services. Our failure to establish or maintain business relationships could have a material adverse effect on our business, financial condition and results of operations.

Specifically, while we have banking relationships and believe that the services we rely on can be procured from other institutions, we may, in the future, have difficulty maintaining existing or securing new bank accounts or clearing services. Our failure to establish or maintain business relationships could have a material adverse effect on our business, financial condition, and results of operations.

Failure to comply with or to obtain the necessary licenses, permits, certificates, authorizations or accreditations could result in restrictions on our ability to operate in the hemp-derived products industry, which could have a material adverse effect on our business, financial condition or results of operations. We are dependent on the popularity of consumer acceptance of our brand portfolio.

Failure to comply with or to obtain the necessary licenses, permits, certificates, authorizations or accreditations could result in restrictions on our ability to operate in the hemp-derived products industry, which could have a material adverse effect on our business, financial condition or results of operations. 17 We are dependent on the popularity of consumer acceptance of our brand portfolio.

Additionally, actions we may take to mitigate the impact of any disruption or potential disruption in our supply of raw materials or finished inventory, including increasing inventory in anticipation of a potential supply or production interruption, may adversely affect our business, financial condition and results of operations. 12 We may not be able to obtain or maintain necessary permits and authorizations.

Additionally, actions we may take to mitigate the impact of any disruption or potential disruption in our supply of raw materials or finished inventory, including increasing inventory in anticipation of a potential supply or production interruption, may adversely affect our business, financial condition and results of operations. We may not be able to obtain or maintain necessary permits and authorizations.

We also face competition from the illicit market and illegal dispensaries and cultivation operations that are unlicensed, not regulated and that are selling cannabis or hemp products. Any inability or unwillingness of law enforcement authorities to enforce existing laws prohibiting the unlicensed production and sale of cannabis or hemp products could result in increased competition for us.

We also face competition from the illicit market and illegal dispensaries and cultivation operations that are unlicensed, not regulated and that are selling cannabis or hemp-derived products. Any inability or unwillingness of law enforcement authorities to enforce existing laws prohibiting the unlicensed production and sale of cannabis or hemp-derived products could result in increased competition for us.

These possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders or that result in our investors losing all of their investment in our company. 6 If we are able to raise additional capital, we do not know what the terms of any such capital raising would be.

These possibilities, to the extent available, may be on terms that result in significant dilution to our shareholders or that result in our investors losing all of their investment in our company. If we are able to raise additional capital, we do not know what the terms of any such capital raising would be.

This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. We incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating results .

This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. 21 We incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating results .

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling their shares. The financial and operational projections that we may make from time to time are subject to inherent risks .

These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our Common Stock, and therefore stockholders may have difficulty selling their shares. 22 The financial and operational projections that we may make from time to time are subject to inherent risks .

Some of these inputs may only be available from a single supplier or a limited group of suppliers, or be sourced abroad. If a sole source supplier was to go out of business, we might be unable to find a replacement for such source in a timely manner, or at all.

Some of these inputs may only be available from a single supplier or a limited group of suppliers, or be sourced abroad. If a limited source supplier was to go out of business, we might be unable to find a replacement for such source in a timely manner, or at all.

Large chain stores, manufacturers, retailers, beverage and other consumer products companies that also recognize the potential for financial success through acquisitions and investment in the hemp-derived beverage industry could strategically acquire competitors or invest in creating their own brands.

Large chain stores, manufacturers, retailers, and beverage and other consumer products companies that also recognize the potential for financial success through acquisitions and investment in the hemp-derived THC industry could strategically acquire competitors or invest in creating their own brands.

The FDA has previously declined to issue regulations for the manufacture and sale of hemp-derived products. For example, in 2023, the FDA denied three citizen petitions asking the FDA to conduct rulemaking to allow the marketing of CBD, another hemp-derived cannabinoid, as dietary supplements.

The FDA has previously declined to issue regulations for the manufacture and sale of hemp-derived THC products. For example, in 2023, the FDA denied three citizen petitions asking the FDA to conduct rulemaking to allow the marketing of CBD, another hemp-derived cannabinoid, as dietary supplements.

If we fail to satisfy the rules and continued listing requirements of Nasdaq, such as the requires relating to corporate governance, shareholder approval, shareholders’ equity or our minimum closing bid price, Nasdaq will take steps to delist our common stock.

If we fail to satisfy the rules and continued listing requirements of Nasdaq, such as the requirements relating to corporate governance, shareholder approval, shareholders’ equity or our minimum closing bid price, Nasdaq will take steps to delist our common stock.

There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the cannabis or hemp markets or any particular product, or consistent with earlier publicity.

There can be no assurance that future scientific research and findings, regulatory proceedings, litigation, media attention, or other research findings or publicity will be favorable to the cannabis or hemp markets or any particular product, or consistent with earlier publicity.

We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. Any such an increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results.

We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. Any such increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results.

The varied state regulatory framework for hemp products poses risks to manufacturing, marketing, selling, and shipping hemp-derived products around the country, whether wholesale or direct to consumers via online or brick and mortar retail locations.

The varied state regulatory framework for hemp products poses risks to manufacturing, marketing, selling, and shipping hemp-derived THC products around the country, whether wholesale or direct to consumers via online or brick-and-mortar retail locations.

Consumer perception of our products may be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention and other publicity regarding the consumption of cannabis and hemp-derived products.

Consumer perception of our products may be significantly influenced by scientific research or findings, regulatory investigations, litigation, media attention, and other publicity regarding the consumption of cannabis and hemp-derived THC products.

Hemp-derived products may be shown to have negative health and/or safety impacts upon consumers The health and safety impacts of hemp-derived products have not yet been established via traditional scientific and/or clinical studies.

Hemp-derived THC products may be shown to have negative health and/or safety impacts upon consumers. The health and safety impacts of hemp-derived THC products have not yet been established via traditional scientific and/or clinical studies.

Termination of any strategic alliances, including our shared services agreement with Green Thumb, could significantly disrupt our business. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations. 7 Past and potential future divestitures or other transactions could adversely affect our costs, revenues, profitability and financial position.

Termination of any strategic alliances, including our shared services agreement with Green Thumb, could significantly disrupt our business. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations. 12 Past and potential future divestitures or other transactions could adversely affect our costs, revenues, profitability and financial position.

Any or all these events could have a material adverse effect on our business, financial condition and results of operations. 15 Inconsistent public opinion and perception of the cannabis and hemp industries may hinder market growth and state regulation, which would adversely impact our growth plans and current operations and result in an adverse effect on our business, financial condition and results of operations.

Any or all these events could have a material adverse effect on our business, financial condition, and results of operations. 8 Inconsistent public opinion and perception of the cannabis and hemp industries may hinder market growth and state regulation, which would adversely impact our growth plans and current operations and result in an adverse effect on our business, financial condition, and results of operations.

Since our inception, we have strategically acquired several businesses, and plan to continue to make strategic acquisitions, some of which may be material.

Since our inception, we have strategically acquired several businesses, and we may continue to make strategic acquisitions, some of which may be material.

While FTC enforcement actions related to CBD were historically limited to warnings, in December 2020, the agency initiated its first formal enforcement action against six CBD companies for allegedly making unsupported health claims, leading to settlement agreements that required them to cease such claims and pay monetary judgments.

While FTC enforcement actions related to CBD were historically limited to warnings, in December 2020, the agency initiated its first formal enforcement action against six CBD companies for allegedly making unsupported health claims, leading to settlement agreements that required those companies to cease such claims and pay monetary judgments.

Our cash flow and existing capital resources may be insufficient to repay our debt at maturity, in which case we would have to extend such maturity date, or otherwise repay, refinance, and/or restructure the obligations under the Note, including with proceeds from the sale of assets, and additional equity or debt capital.

Our cash flow and existing capital resources may be insufficient to repay our debt at maturity, in which case we would have to extend such maturity date, or otherwise repay, refinance, and/or restructure the obligations under the Notes, including with proceeds from the sale of assets, and additional equity or debt capital.

Cannabis and hemp may be seen by companies in other industries as an attractive alternative to their products, including alcohol, and as an alternative to various commercial pharmaceuticals. Many industries that could view the emerging cannabis and hemp industries as economic threats are well established, with vast economic and federal and state lobbying resources.

Cannabis and hemp may be seen by companies in other industries as an attractive alternative to their products, such as alcohol, and as an alternative to various commercial pharmaceuticals. Many industries that could view the emerging cannabis and hemp industries as economic threats are well established, with vast economic and federal and state lobbying resources.

We have obtained and applied for U.S. trademark and service mark registrations and will continue to evaluate the registration of additional trademarks and service marks or, as appropriate. We cannot guarantee that any of our pending trademark applications will be approved by the applicable governmental authorities.

We have obtained and applied for certain U.S. and state trademark and service mark registrations and will continue to evaluate the registration of additional trademarks and service marks or, as appropriate. We cannot guarantee that any of our pending trademark applications will be approved by the applicable governmental authorities.

Further, states in which the Company currently sells its hemp-derived products could decide in the future to ban these products altogether.

Further, states in which the Company currently sells its hemp-derived THC products could decide in the future to ban these products altogether.

If a sole source supplier were to be acquired by a competitor, that competitor may elect not to sell to us in the future. Manufacturing delays or unexpected transportation delays, particularly from materials we source abroad, can also cause us to incur significantly increased costs.

If a limited source supplier were to be acquired by a competitor, that competitor may elect not to sell to us in the future. Manufacturing delays or unexpected transportation delays, particularly from materials we source abroad, can also cause us to incur significantly increased costs.

The Food and Drug Administration (“FDA”) has taken the position that ingestible products over which it has jurisdiction, including foods, beverages, and dietary supplements, that contain cannabinoids such as THC, including hemp-derived delta-9 THC, are not permitted under the Federal Food, Drug, and Cosmetic Act (“FDCA”).

The Food and Drug Administration (“FDA”) has taken the position that ingestible products over which it has jurisdiction, including foods, beverages, and dietary supplements, that contain cannabinoids such as THC, including hemp-derived THC, are not permitted under the Federal Food, Drug, and Cosmetic Act (“FDCA”).

Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis or hemp-derived products in general, or our products specifically, or associating the consumption of cannabis or hemp-derived products with illness or other negative effects or events, could have such a material adverse effect.

Further, adverse publicity reports or other media attention regarding the safety, efficacy, and quality of hemp-derived THC products in general, or our products specifically, or associating the consumption of cannabis or hemp-derived THC products with illness or other negative effects or events, could have a material adverse effect.

The inability to open bank accounts may make it difficult for some of our customers to operate and their reliance on cash can result in a heightened risk of theft, which could harm their businesses and, in turn, harm our business.

The inability to open bank accounts may make it difficult for some of our customers or licensees to operate and their reliance on cash can result in a heightened risk of theft, which could harm their businesses and, in turn, harm our business.

If its past or present activities are found to violate such regulations, the Company could face enforcement actions, including civil or criminal penalties, fines, damages, operational restrictions or restructuring, asset seizures, and the denial of regulatory approvals.

If its past or present activities are found to violate such laws, the Company could face enforcement actions, including civil or criminal penalties, fines, damages, operational restrictions or restructuring, asset seizures, and the denial of regulatory approvals.

The FDA may decide in the future to increase enforcement activities, regardless of whether a company has made health claims related to its products or markets to children, which could impact the Company’s offering of hemp-derived THC beverages and materially impact operations and revenue. The FDA could issue new regulations that prohibit or strictly limit the sale of hemp-derived products.

The FDA may decide in the future to increase enforcement activities, regardless of whether a company makes health claims related to its products or markets to children, which could impact the Company’s offering of hemp-derived THC beverages and materially impact operations and revenue. The FDA could issue new regulations that prohibit or strictly limit the sale of hemp-derived THC products.

The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our potential products. 9 Our products may be subject to product recalls.

The Federal Trade Commission (“FTC”) and FDA frequently collaborate on enforcement where their jurisdictions overlap, particularly in regulating the advertising, labeling, and promotion of food, cosmetics, medical devices, and OTC drugs.

While we have attempted to identify many risks specific to the cannabis and hemp industries, you should carefully consider that there are other risks that cannot be foreseen or are not described in this report, which could materially and adversely affect our business and financial performance.

While we have attempted to identify many risks specific to the hemp industry, you should carefully consider that there are other risks that cannot be foreseen or are not described in this report, which could materially and adversely affect our business and financial performance.

In doing so, these larger competitors could produce and sell competing products at a lower price and establish a larger brand presence. We may not have the personnel, products, marketing and distribution capabilities, and/or financial resources to compete effectively against such larger competitors.

In doing so, these larger competitors could produce and sell competing products at a lower price and establish a larger brand presence than we have. We may lack the personnel, products, marketing, and distribution capabilities, and/or financial resources to compete effectively against such larger competitors.

Failure to adhere to existing or evolving regulations in any jurisdiction could materially impact the Company’s business. There is also a risk that authorities in these jurisdictions may determine that the Company was or is not in compliance with local laws.

Failure to adhere to existing or evolving laws in any jurisdiction could materially impact the Company’s business. There is also a risk that authorities in these jurisdictions may determine that the Company was or is not in compliance with their laws.

In the CBD market, the FTC has joined the FDA in issuing warning letters to companies whose advertisements lacked competent and reliable scientific evidence, thereby violating the FTC Act, 15 U.S.C. § 41 et seq. The FTC has also independently issued warning letters to CBD companies for making exaggerated or misleading claims without sufficient scientific backing.

In the CBD market, the FTC has joined the FDA in issuing warning letters to companies that lacked competent and reliable scientific evidence supporting their advertisements, thereby violating the FTC Act, 15 U.S.C. § 41 et seq. The FTC has also independently issued warning letters to CBD companies for making exaggerated or misleading claims without sufficient scientific backing.

After we are no longer an “emerging growth company,” we expect to incur additional management time and cost to comply with the more stringent reporting requirements applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

After we are no longer a “smaller reporting company,” or “emerging growth company” we expect to incur additional management time and cost to comply with the more stringent reporting requirements applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

Other state laws permit hemp-derived products but impose new regulatory frameworks containing licensing and labeling requirements, age gates, amount and potency restrictions, allowable types of products, and restricting where the products may be sold.

Other state laws permit hemp-derived THC products but impose new regulatory frameworks containing licensing and labeling requirements, age gates, amount and potency restrictions, allowable types of products, and restrictions on where the products may be sold.

As a relatively new industry, there are relatively few operators in the hemp-derived beverage industry whose business models we can follow or build upon. Similarly, there is no or limited information about comparable companies available for potential investors to review in making a decision about whether to invest in us.

Because the hemp-derived THC industry is new, there are relatively few operators in the industry whose business models we can follow or build upon. Similarly, there is no or limited information about comparable companies available for potential investors to review in making a decision about whether to invest in us.

These actions may require that we abandon or divest certain assets or businesses that no longer fit within our evolving strategic direction, as we did with the sale of our cultivation business.

These actions may require that we abandon or divest certain assets or businesses that no longer fit within our evolving strategic direction, as we did with the sale of our cultivation business and exit of our extraction business.

Our business depends in part on client licensing Our business is partly dependent on certain of our customers obtaining various licenses from various municipalities and state licensing agencies. There can be no assurance that any or all licenses necessary for our customers to operate their businesses will be obtained, retained, or renewed.

Our business is partly dependent on certain of our customers obtaining various licenses from various municipalities and state licensing agencies. There can be no assurance that any or all licenses necessary for our customers to operate their businesses will be obtained, retained, or renewed.

If any of our products or products sold at our retail stores are recalled due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall.

If any of our products are recalled due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall.

The FDA appears to believe that certain hemp-derived products may have significant adverse health impacts upon human beings, especially in regard to potential liver toxicity or liver damage.

The FDA appears to believe that certain CBD products may have significant adverse health impacts upon human beings, especially in regard to potential liver toxicity or liver damage.

Third parties with whom we do business may perceive themselves as being exposed to reputational risk because of their relationship with us due to our cannabis and hemp-related business activities and may as a result, refuse to do business with us.

Third parties with whom we do business may perceive themselves as being exposed to reputational, and even legal, risk because of their relationship with us due to our hemp- and limited cannabis-related licensing activities and may, as a result, refuse to do business with us.

Despite efforts to protect our proprietary rights through intellectual property laws, licenses, and confidentiality agreements, unauthorized parties may still copy or otherwise obtain and use our technology. Companies frequently enter into litigation based on allegations of infringement, misappropriation, or violations of intellectual property rights or other laws.

Despite our efforts to protect our proprietary rights through intellectual property laws, licenses and confidentiality arrangements, unauthorized parties may still copy or otherwise obtain and use our trademarks, recipes or other intellectual property. Companies frequently enter into litigation based on allegations of infringement, misappropriation, or violations of intellectual property rights or other laws.

These acquisitions may involve a number of financial, accounting, managerial, operational, legal, compliance, and other risks and challenges, including the following, any of which could adversely affect our results of operations: ● any acquired business could under-perform relative to our expectations and the price that we paid for it, or not perform in accordance with its anticipated timetable; ● we may incur or assume significant debt in connection with our acquisitions; ● acquisitions could cause our results of operations to differ from our own or the investment community’s expectations in any given period, or over the long term; and ● acquisitions could create demands on our management that they may be unable to effectively address, or for which we may incur additional costs.

Kovler cannot serve us or is no longer willing to do so, or if Green Thumb no longer provides personnel support to us under the shared services agreement, we may not be able to find alternatives in a timely manner or at all. This may have a material adverse effect on our business.

Asher cannot serve us or are no longer willing to do so, or if Green Thumb no longer provides personnel support to us under the shared services agreements, we may not be able to find alternatives in a timely manner or at all. This may have a material adverse effect on our business.

Our inability to deal with this growth may have a material adverse effect on our business, prospects, revenue, results of operation and financial condition. We rely on third parties for certain products sold to our customers, which could limit our control over the quality of the products . The products sold by our Señorita business are co-manufactured by third parties.

Inconsistent public opinion and perception of cannabis and hemp hinders growth of the cannabis and hemp industries, which could have a material adverse effect on our business plans, financial condition and results of operations.

Inconsistent public opinion and perception of cannabis and hemp hinder growth of the hemp industry, which could have a material adverse effect on our business plans, financial condition, and results of operations.

If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Item 1B. Unresolved Staff Comments. None

At December 31, 2024, we had approximately $31.2 million of cash and cash equivalents. Our operating plan may change because of factors currently unknown to us, and we may need to seek additional funds sooner than planned.

As of December 31, 2025, we had approximately $32.2 million of cash and cash equivalents. Our operating plan may change because of factors currently unknown to us, and we may need to seek additional funds sooner than planned.

Our growth and success are dependent upon the continued contributions made by our Chairman of the Board and Interim Chief Executive Officer, Benjamin Kovler, and by other individuals who are employees of Green Thumb and who provide services to us under a shared services agreement. We rely on Mr.

Our growth and success are significantly affected by the continued contributions made by our Chairman of the Board and Interim Chief Executive Officer, Benjamin Kovler, by our Chief Financial Officer, Brad Asher and by other individuals who are employees of Green Thumb and who provide services to us under a shared services agreement. We rely on Mr.

The FDA has not evaluated THC, and therefore does not consider it to be GRAS (Generally Recognized as Safe) for use in foods, including beverages. The FDA has also found that because THC is in certain drugs approved by FDA, it cannot be used in foods/beverages or dietary supplements.

The FDA has not evaluated THC as a food ingredient, and therefore does not consider it to be GRAS (Generally Recognized as Safe) for use in foods, including beverages. The FDA has also found that because THC is in certain drugs approved by the FDA, it is precluded from use in foods/beverages or dietary supplements.

In addition, any failure to make scheduled payments of interest and principal on our outstanding indebtedness would likely harm our ability to incur additional indebtedness on acceptable terms. Our cash flow and capital resources may be insufficient to pay interest and principal on our debt in the future.

This immediate payment may negatively impact our financial condition. In addition, any failure to make scheduled payments of interest and principal on our outstanding indebtedness would likely harm our ability to incur additional indebtedness on acceptable terms. Our cash flow and capital resources may be insufficient to pay interest and principal on our debt in the future.

We face competition from the illicit market as well as larger competitors and licensed medical and adult use cannabis dispensaries. The U.S. cannabis industry is, and is expected to continue to be, competitive.

We face competition from the illicit market as well as larger competitors and licensed medical and adult-use cannabis dispensaries. The U.S. cannabis and hemp industries are, and are expected to continue to be, competitive.

If a licensing body were to determine that a customer of ours had violated applicable rules and regulations, there is a risk the license granted to that customer could be revoked, which could adversely affect our operations.

The cannabis and hemp industries could face strong opposition from other industries We believe that established businesses in other industries may have a strong economic interest in opposing the development of the cannabis and hemp industries.

The cannabis and hemp industries could face strong opposition from other industries. We believe that established businesses in other industries may perceive strong economic interests in opposing the development of the cannabis and hemp industries.

The 2018 Farm Bill, which has been extended through September 30, 2025 without modification, legally defined hemp as Cannabis Sativa L. containing less than 0.3% delta-9 THC on a dry weight basis, effectively legalizing hemp in the United States. The 2018 Farm Bill is the legal basis for the Company’s entry into the hemp-derived THC product market.

The 2018 Farm Bill, which is the legal basis for the Company’s entry into the hemp-derived THC product market, legally defined hemp as Cannabis Sativa L. containing less than 0.3% delta-9-THC on a dry weight basis, effectively legalizing hemp in the United States.

If these regulatory changes occurred, the revenue streams we expect to receive from our businesses and assets would be at risk and, as a result, could have a material adverse effect on our business, financial condition and results of operations. Hemp-derived THC products are not permitted under the FDCA.

If these regulatory changes occur, the revenue streams we expect to receive from our businesses and assets would be at risk and, as a result, such changes could have a material adverse effect on our business, financial condition, and results of operations. 6 Hemp-derived THC products are not permitted under the Federal Food, Drug, and Cosmetic Act.

Kovler’s expertise in business operations and the cannabis and hemp industries when we are developing or acquiring new products and services. If Mr.

Kovler’s expertise in business operations and the cannabis and hemp industries when we are developing or acquiring new products and services and on Mr. Asher’s financial and reporting expertise. If Mr. Kovler or Mr.

Any inroads these companies make in halting or impeding legislative initiatives that would be beneficial to the cannabis and hemp industries could have a detrimental impact on some of our customers and, in turn, on our operations. 9 Our business depends in part on our customers obtaining and/or maintaining appropriate licensing.

The third parties with whom we do business may perceive that they are exposed to reputational risk because of our cannabis and/or hemp-related business activities. Any third-party service provider could suspend or withdraw its services if it perceives that the potential risks exceed the potential benefits of providing such services to us.

The third parties with whom we do business may perceive that they are exposed to reputational, or possibly even legal, risk because of our hemp- or limited cannabis-related business activities. Any third-party service provider or customer could suspend or withdraw its business if it perceives that the potential risks exceed the potential benefits of doing business with us.

During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective.

If we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective.

A total of 7.6 million warrants were issued and outstanding as of March 17, 2025. Investors may experience dilution in the value of their investment upon the exercise of the warrants and any equity awards that may be granted or issued pursuant to the 2022 Omnibus Equity Incentive Plan.

A total of approximately 10.9 million warrants were issued and outstanding as of March 3, 2026. Investors may experience dilution in the value of their investment upon the exercise of the warrants and any equity awards that may be granted or issued pursuant to the 2022 Omnibus Equity Incentive Plan.

If we are unsuccessful in obtaining such extension, or entering into such repayment, refinance, or restructure prior to maturity, or any other default existed under the Note, the Investor could accelerate the indebtedness under the Note, foreclose against its collateral, or seek other remedies, which would jeopardize our ability to continue our current operations. 8 We are dependent on key inputs and suppliers; and fluctuations in the cost or availability of materials we use in our products and supply chain could negatively affect our results.

If we are unsuccessful in obtaining such extension, or entering into such repayment, refinance, or restructure prior to maturity, or any other default existed under the Notes, the holder could accelerate the indebtedness under the Notes, foreclose against its collateral, or seek other remedies, which would jeopardize our ability to continue our current operations and raise substantial doubt about the Company’s ability to continue as a going concern. 13 We are dependent on key inputs and suppliers; and fluctuations in the cost or availability of materials we use in our products and supply chain could negatively affect our results.

We do not typically have any direct control over these third-party co-manufacturers. These third-party co-manufacturers could experience quality control issues, equipment problems, data loss, and other events relating to the products they produce that could impact the quality of those products.

The products sold by our hemp-derived beverage business are co-manufactured by third parties. We do not typically have any direct control over these third-party co-manufacturers. These third-party co-manufacturers could experience quality control issues, equipment problems, data loss, and other events relating to the products they produce that could impact the quality of those products.

Although we intend to continue to maintain insurance to protect against certain risks in such amounts as we consider to be reasonable, our insurance will not cover all the potential risks associated with our operations. We may also be unable to maintain insurance to cover these risks at economically feasible premiums.

The utilization of our NOLs could be subject to annual limitations under Section 382 and 383 of the Internal Revenue Code (“IRC” or the “Code”) of 1986, and similar state tax provisions due to ownership change limitations that may have occurred previously or that could occur in the future.

The utilization of our net operating loss (“NOL”) carryforwards is subject to limitations under Section 382 of the Internal Revenue Code (“IRC” or the “Code”) of 1986, and similar state tax provisions due to ownership change limitations that may have occurred previously or that could occur in the future.

If we are unable to assert that our internal control over financial reporting is effective, or if our auditors are unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy and completeness of our financial reports, which would have a material adverse effect on the price of our Common Stock.

Losses from these events may cause us to incur significant costs that could have a material adverse effect upon our financial performance and results of operations. We participate in an evolving industry The cannabis and hemp industries are not yet well-developed, and many aspects of these industries’ development and evolution cannot be accurately predicted.

Losses from these events may cause us to incur significant costs that could have a material adverse effect upon our financial performance and results of operations. We participate in an evolving and volatile industry. The hemp industry is still new, and many aspects of the industry’s development and evolution cannot be accurately predicted.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to annually furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

New FDA regulations could also require financial investment in additional compliance mechanisms which could impact our profitability and the market price for our Common Stock. Other federal agencies may take enforcement actions against companies selling hemp-derived products.

New FDA regulations could materially and negatively impact the Company’s operations and revenue. New FDA regulations could also require the Company to make financial investments in additional compliance mechanisms which could impact our profitability and the market price for our Common Stock. Other federal agencies may take enforcement actions against companies selling hemp-derived THC products.

In particular, we currently rely on Green Thumb for significant legal, accounting and operational support through a shared services agreement. Our ability to complete strategic alliances is dependent upon, and may be limited by, the availability of suitable candidates and capital.

In particular, we currently have shared services agreements with Green Thumb for significant legal, accounting and operational support, including sales and marketing support. Our ability to complete strategic alliances is dependent upon, and may be limited by, the availability of suitable candidates and capital.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeA mitigation plan is developed for each identified high risk, with progress reported to the technology management team and tracked as part of our overall risk management program overseen by Board and its Audit Committee. 24 To date, cybersecurity threats, including those resulting from any previous cybersecurity incidents, have not materially affected our Company, including our business strategy, results of operations, or financial condition.

We do not believe that cybersecurity threats resulting from any previous cybersecurity incidents of which we are aware are reasonably likely to materially affect our Company. Governance Our Board oversees our risk management process, including as it pertains to cybersecurity risks, directly and through its committees.

We do not believe that cybersecurity threats resulting from any previous cybersecurity incidents of which we are aware are reasonably likely to materially affect our Company. 23 Governance Our Board oversees our risk management process, including as it pertains to cybersecurity risks, directly and through its committees.

Our technology management team assesses risks based on probability and potential impact to key business systems and processes. Risks that are considered high are addressed promptly and documented to be incorporated into our overall risk management program.

Our technology management team and Audit Committee assess risks based on probability and potential impact to key business systems and processes. Risks that are considered high are addressed promptly and documented to be incorporated into our overall risk management program.

Added

To date, cybersecurity threats, including those resulting from any previous cybersecurity incidents, have not materially affected our Company, including our business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Removed

Item 2. Properties. Our corporate headquarters is in Troy, Michigan where we occupy approximately 15,825 square feet of office, warehousing, and light industrial space under a lease that expires in 2026. We lease properties located within various geographic regions in which we conduct business. All of our facilities are leased.

Added

Item 2. Properties. Our corporate headquarters is in Rolling Meadows, Illinois where we occupy corporate office space. We operate an asset-light business model and do not own any real property. We do not have any material property leases, and we rely on third-party manufacturers, distributors, and service providers to support our operations.

Removed

We believe our facilities are adequate for our needs and believe that we should be able to renew any of our existing leases or secure similar property without an adverse impact on our operations.

Added

As previously disclosed, the Company’s lease for office space in Troy, Michigan was scheduled to expire in 2026. In March 2025, the Company terminated the lease prior to its scheduled expiration. The termination did not have a material impact on the Company’s consolidated financial statements.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFor information related to significant legal proceedings in which we are involved, see the discussion under the caption Legal Matters in Note 18 - Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10K, which information is incorporated by reference into this Item 3. Item 4. Mine Safety Disclosures.

Biggest changeFor information related to significant legal proceedings in which we are involved, see the discussion under the caption Legal Matters in Note 23 - Commitments and Contingencies to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, which information is incorporated by reference into this Item 3.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRecent Sales of Unregistered Securities There were no sales of unregistered securities during the year ended December 31, 2024 that were not previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q. Item 6. [Reserved]. 26

Biggest changeRecent Sales of Unregistered Securities There were no sales of unregistered securities during the year ended December 31, 2025 that were not previously disclosed in a Current Report on Form 8-K or Quarterly Report on Form 10-Q.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . Market Information Our Common Stock is traded on the Nasdaq Capital Market under the symbol “AGFY.” Holders of Record As of March 15, 2025, there were 55 holders of record of our Common Stock.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . Market Information Our Common Stock is traded on the Nasdaq Capital Market under the symbol “RYM.” Holders of Record As of March 3, 2026, there were 53 holders of record of our Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. 37 Comparison of Years Ended December 31, 2024 and 2023 The following table summarizes our results of operations for the years ended December 31, 2024 and 2023: Year Ended December 31, (In thousands) 2024 2023 Revenue $ 9,680 $ 15,142 Cost of goods sold 9,015 11,124 Gross profit 665 4,018 Selling, general and administrative 12,305 16,057 Research and development 743 2,295 Change in contingent consideration (2,180 ) (1,322 ) Gain on early termination of lease (39 ) — Loss on disposal on property and equipment 51 12 Total operating expenses 10,880 17,042 Operating loss from continuing operations (10,215 ) (13,024 ) Interest expense, net (256 ) (2,145 ) Change in fair value of warrant liabilities (17,902 ) 4,695 Loss on extinguishment of long-term debt, net — (4,311 ) Other income, net 19 1,358 Total other expense, net (18,139 ) (403 ) Loss from continuing operations before income taxes (28,354 ) (13,427 ) Income tax (expense) benefit 2 (2 ) Loss from continuing operations, net of income taxes (28,352 ) (13,429 ) Loss from discontinued operations (1,501 ) (5,221 ) Loss on disposal of Cultivation business (11,893 ) — Loss from discontinued operations, net of income taxes (13,394 ) (5,221 ) Net loss (41,746 ) (18,650 ) Income attributable to non-controlling interest — 1 Net loss attributable to Agrify Corporation $ (41,746 ) $ (18,649 ) Net loss per share attributable to Common Stockholders – basic and diluted (1) $ (40.92 ) $ (187.64 ) Weighted average common shares outstanding - basic and diluted (1) 1,020,185 99,391 Revenues We generate revenue from sales extraction equipment and solutions and hemp-derived beverages.

Biggest changeRefer to information provided under the heading “Liquidity and Capital Resources” below for further details. 26 Comparison of Years Ended December 31, 2025 and 2024 The following table summarizes our results of operations for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Revenue $ 17,283 $ 18 Cost of goods sold 7,093 89 Gross profit (loss) 10,190 (71 ) Selling, general and administrative 34,055 7,182 Impairment of long-lived assets 8,471 — Change in contingent consideration — (2,180 ) Total operating expenses 42,526 5,002 Operating loss from continuing operations (32,336 ) (5,073 ) Interest expense, net (3,203 ) (256 ) Change in fair value of warrant liabilities 299 (17,902 ) Other income, net 500 — Total other expense, net (2,404 ) (18,158 ) Loss from continuing operations before income taxes (34,740 ) (23,231 ) Income tax provision — 2 Loss from continuing operations, net of income taxes (34,740 ) (23,229 ) Loss from discontinued operations (2,054 ) (6,624 ) Gain on disposal of Extraction business 3,537 (11,893 ) Income (loss) from discontinued operations, net of income taxes 1,483 (18,517 ) Net loss $ (33,257 ) $ (41,746 ) Net loss per share – basic and diluted $ (16.68 ) $ (40.92 ) Weighted average common shares outstanding - basic and diluted 1,993,947 1,020,185 Revenues We generate revenue from sales of hemp-derived THC products (non-licensing) and related party Licensing Revenue.

Financial Overview Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial position and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of financial statements in conformity with U.S.

Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial position and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. The preparation of financial statements in conformity with U.S.

Cash Flows from Investing Activities For the year ended December 31, 2024, net cash used in investing activities was approximately $0.1 million, which included cash inflows of $0.3 million from the proceeds from repayment of loan receivable, and cash outflows of $0.4 million related to issuance of loans receivable.

For the year ended December 31, 2024, net cash used in investing activities was approximately $0.1 million, which included cash inflows of $0.3 million from the proceeds from repayment of loan receivable, and cash outflows of $0.4 million related to issuance of loans receivable.

GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, we evaluate estimates, which include estimates related to accruals, stock-based compensation expense, recoverability of goodwill and reported amounts of revenues and expenses during the reported period.

GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, we evaluate estimates, which include estimates related to accruals, stock-based compensation expense, recoverability of goodwill, intangible assets, and other assets, and reported amounts of revenues and expenses during the reported period.

Net cash was increased by changes in operating assets and liabilities of $7.0 million.

Net cash was increased by changes in operating assets and liabilities of $7.1 million.

Unless otherwise stated or the context otherwise requires, references in this report to “Agrify”, the “Company,” “we,” “us,” “our,” or similar references mean Agrify Corporation and its subsidiaries on a consolidated basis. Overview Agrify is a developer of branded innovative solutions for the cannabis and hemp industries.

Unless otherwise stated or the context otherwise requires, references in this report to “RYTHM”, the “Company,” “we,” “us,” “our,” or similar references mean RYTHM, Inc. and its subsidiaries on a consolidated basis. Overview RYTHM is a developer of branded innovative solutions for the cannabis and hemp industries.

Securities and Exchange Commission and pre-funded warrants offering of $2.1 million, proceeds from the issuance of Common Stock through stock subscription of $0.3 million, offset by payments on insurance financing loans of $0.4 million. For the year ended December 31, 2023, net cash used in financing activities was $4.2 million.

Other SG&A expenses include, but are not limited to, professional fees for legal, consulting, depreciation and amortization and accounting services, as well as facility-related costs. SG&A expenses decreased by $3.8 million, or 23%, for the year ended December 31, 2024, compared to the same period in 2023.

Other SG&A expenses include, but are not limited to, professional fees for legal and accounting services and depreciation and amortization costs. SG&A expenses increased by $27 million, or 374%, for the year ended December 31, 2025, compared to the same period in 2024.

As the sale of the Cultivation Business represented a strategic shift that will have a major effect on our operations and financial results, they have been presented in discontinued operations separate from continuing operations for the years ended December 31, 2024 and 2023 in the Company’s consolidated statements of operations and applicable footnotes in accordance with ASC 205, Presentation of Financial Statements. 34 Revenue Recognition Overview We generate revenue from equipment sales and hemp-derived beverage sales.

As the discontinuation of the Extraction Business and the sale of the Cultivation Business represented strategic shifts that had a major effect on our operations and financial results, they have been presented in discontinued operations separate from continuing operations for the years ended December 31, 2025 and 2024 in the Company’s consolidated statements of operations and applicable footnotes in accordance with ASC 205, Presentation of Financial Statements .

Summary Statement of Cash Flows The following table presents the major components of net cash flows from and used in operating, investing, and financing activities for the years ended December 31, 2024 and 2023: (In thousands) December 31, 2024 December 31, 2023 Net cash (used in) provided by: Operating activities - continuing operations $ (11,583 ) $ (30,975 ) Investing activities- continuing operations (54 ) 25,179 Financing activities- continuing operations 42,373 (4,227 ) Net increase (decrease) in cash and cash equivalents $ 30,736 $ (10,023 ) Cash Flows from Operating Activities For the year ended December 31, 2024, our operating cash flows included a net loss of $41.7 million, a $17.9 million change in the fair value of warrant liabilities, $11.9 million related to loss on disposal of the Cultivation Business, $1.4 million of depreciation and amortization, $1.2 million of stock based compensation expense, offset by a decrease of $5.9 million related to gain on settlement of contingent liability, $2.2 million decrease related to accrued acquisition liabilities due to issuance of held-back-shares, change in provision for credit losses of $0.3 million, change in provision for inventory of $0.7, and a gain on early termination of lease of $0.1 million.

For the year ended December 31, 2024, our operating cash flows included a net loss of $41.7 million, a $17.9 million change in the fair value of warrant liabilities, $11.9 million related to loss on disposal of the Cultivation Business, $1.4 million of depreciation and amortization, $1.2 million of stock based compensation expense, offset by a decrease of $5.9 million related to gain on settlement of contingent liability, $2.2 million decrease related to accrued acquisition liabilities due to issuance of held-back-shares, change in provision for credit losses of $0.3 million, change in provision for inventory of $0.7 million, and a gain on early termination of lease of $0.1 million.

There are many factors that may negatively impact our available sources of funds in the future, including the ability to generate cash from operations, raise debt capital and raise cash from the issuance of our securities. The amount of cash generated from operations is dependent upon factors such as the successful execution of our business strategy and general economic conditions.

Cash Flows from Financing Activities For the year ended December 31, 2024, net cash provided by financing activities was $42.4 million.

Cash Flows from Financing Activities For the year ended December 31, 2025, net cash provided by financing activities was $79.7 million, which resulted from proceeds from May and August 2025 Notes. For the year ended December 31, 2024, net cash provided by financing activities was $42.4 million.

The Note will mature on November 5, 2025 and has a 10.0% annualized interest rate, with interest to be paid on the first calendar day of each September and March while the Note is outstanding, in cash, beginning January 1, 2025. The principal amount of the Note will be payable on its maturity date.

The Note will mature on November 5, 2025 (the “Maturity Date”) and contains a 10.0% annualized interest rate, with interest to be paid on the first calendar day of each September and March while the Note is outstanding, in cash, beginning January 1, 2025.

The May 2025 Notes will mature on November 22, 2026 and accrue interest at a 10.0% annualized rate, with interest to be paid on the first calendar day of each September and March while the May 2025 Notes are outstanding, in pre-funded warrants, beginning September 1, 2025.

Change in fair value of warrant liability Change in fair value of the warrant liability increased by $22.6 million, or 481%, for the year ended December 31, 2024, compared to the same period in 2023. The increase is related to the measurement of certain warrants upon reclassification to equity.

Change in fair value of warrant liability Change in fair value of the warrant liability decreased by $18.2 million, or 102%, for the year ended December 31, 2025, compared to the same period in 2024. The increase is related to the fair value remeasurement of warrants.

We base our estimates on historical experience and other market-specific or other relevant assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from those estimates or assumptions. Refer to Note 2 included elsewhere in the notes to the consolidated financial statements, for further information. Results of Operations We have incurred recurring losses to date.

Additionally, prior to its sale on December 31, 2024, our proprietary micro-environment-controlled Agrify Vertical Farming Units (“VFUs”) enabled cultivators to produce high quality products for the cannabis industry. Agrify was incorporated in the state of Nevada on June 6, 2016, originally incorporated as Agrinamics, Inc. (or “Agrinamics”).

If additional financing is required from outside sources, we may not be able to raise such capital on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, operating results and financial condition may be adversely affected.

If we are unable to raise additional capital when desired, our business, operating results and financial condition may be adversely affected.

The comparative decrease in revenue was primarily driven by increased discounting. 38 Cost of Goods Sold Cost of goods sold represents a combination of the following: internal and outsourced labor and material costs associated with the assembly of extraction equipment, as well as labor and parts costs associated with the sale or provision of other products and services.

Of the revenue recognized for the year ended December 31, 2025, $8.2 million was attributable to related parties. 27 Cost of Goods Sold Cost of goods sold represents a combination of the following: internal and outsourced labor and material costs associated with the assembly of extraction equipment, as well as labor and parts costs associated with the sale or provision of other products and services.

The conversion of the Note will be subject to certain customary conditions and the receipt of stockholder approval to the extent necessary under Nasdaq listing rules.

The conversion of the August 2025 Notes into Common Stock and/or pre-funded warrants is subject to certain customary conditions and, to the extent necessary, the receipt of stockholder approval under Nasdaq listing rules.

Income Tax (Expense) Benefit Year Ended December 31, (In thousands) 2024 2023 Change % Change Income tax (expense) benefit $ 2 $ (2 ) $ — — % Effective tax rate — % — % Liquidity and Capital Resources As of December 31, 2024, our principal sources of liquidity are cash and cash equivalents totaling $31.2 million.

Income Tax Provision Year Ended December 31, (In thousands) 2025 2024 Change % Change Income tax provision $ — $ 2 $ (2 ) (100 )% Effective tax rate 0.00 % (0.01 )% Change in loss on provision for income taxes decreased by $2 thousand for the year ended December 31, 2025, compared to the same period in 2024. 29 Liquidity and Capital Resources As of December 31, 2025, our principal sources of liquidity are cash and cash equivalents totaling $32.2 million.

Gross Profit Year Ended December 31, (In thousands) 2024 2023 Change % Change Gross profit $ 665 $ 4,018 $ (3,353 ) (83 )% Gross profit totaled $0.7 million, or 7%, of total revenue during the year ended December 31, 2024 compared to a gross profit of $4.0 million, or 27% of total revenue during the year ended December 31, 2023.

Gross Profit Year Ended December 31, (In thousands) 2025 2024 Change % Change Gross profit (loss) 10,190 (71 ) 10,261 (14452 )% Gross profit totaled $10 million, or 59%, of total revenue during the year ended December 31, 2025 compared to a gross loss of $71 thousand of total revenue during the year ended December 31, 2024.

The comparative $3.4 million year-over-year decrease in gross profit was primarily driven by increased discounting of on hand inventory.

The comparative $10.3 million year-over-year increase in gross profit was primarily driven by the changes in product lines of the business.

Our Señorita brand offers consumers hemp-derived tetrahydrocannabinol (“THC”) beverages that mirror well-known cocktails like a margarita – in three flavors – classic Lime Jalapeño Margarita, Mango Margarita, and Paloma. for its clean, fresh taste and commitment to high-quality, natural ingredients, Señorita offers a low-sugar, low-calorie alternative to alcoholic beverages and is available at top retailers including Total Wine, ABC Fine Wine & Spirits, and Binny’s in nine U.S. states and Canada, with plans for expansion and future availability in premier on-premises destinations.

Known for its clean, fresh taste and commitment to high-quality, natural ingredients, Señorita offers a low-sugar, low-calorie alternative to alcoholic beverages and is available in fifteen U.S. states and Canada including at top retailers such as Total Wine, ABC Fine Wine & Spirits, and Binny’s. The RYTHM branded beverage comes in two fruit-driven flavors with effect-based ingredients.

The amount of cash generated from operations is dependent upon factors such as the successful execution of our business strategy and general economic conditions. 40 We may opportunistically raise debt capital, subject to market and other conditions. Additionally, as part of our growth strategies, we may also raise debt capital for strategic alternatives and general corporate purposes.

We may opportunistically raise debt capital, subject to market and other conditions. Additionally, as part of our growth strategies, we may also raise debt capital for strategic alternatives and general corporate purposes. If additional financing is required from outside sources, we may not be able to raise such capital on terms acceptable to us or at all.

Selling, General and Administrative Expenses Year Ended December 31, (In thousands) 2024 2023 Change % Change Selling, general and administrative $ 12,305 $ 16,057 $ (3,752 ) (23 )% Selling, General and administrative expenses (“SG&A”) consist principally of salaries and related costs for personnel, including stock-based compensation and travel expenses, associated with executive and other administrative functions.

Selling, General and Administrative Expenses Year Ended December 31, (In thousands) 2025 2024 Change % Change Selling, general and administrative $ 34,055 $ 7,182 $ 26,873 374 % Selling, General and administrative expenses (“SG&A”) consist principally of marketing costs and support services performed by Green Thumb, as well as stock-based compensation and travel expenses associated with executive and other administrative functions.

In addition to beverages, Agrify has also historically been a leading provider of innovative cultivation and extraction solutions for the cannabis industry. Our comprehensive extraction product line, which includes hydrocarbon, alcohol, solventless, post-processing, and lab equipment, empowers producers to maximize the quantity and quality of extract required for premium concentrates.

Prior to the exit of the extraction business on March 30, 2025, the Company’s comprehensive extraction product line (“the Extraction Business”), which included hydrocarbon, alcohol, solventless, post-processing, and lab equipment, empowered cannabis producers to maximize the quantity and quality of extract required for premium concentrates.

Loss on extinguishment of notes payable Change in loss on extinguishment of notes payable decreased by $4.3 million, or 100%, for the year ended December 31, 2024, compared to the same period in 2023.

Cost of goods sold increased by $7 million for the year ended December 31, 2025 compared to the same period in 2024.

The Note is a secured obligation and ranks senior to all indebtedness of the Company except for indebtedness held by Mack, as described in Note 12 – Stockholder’s Equity (Deficit).

The November 2024 Note is a secured obligation of the Company and ranks senior to all indebtedness of the Company except for the May 2025 Notes and the August 2025 Notes (both as defined below), which rank on parity with the November 2024 Note.

The following table provides a breakdown of our revenue from continuing operations for the years ended December 31, 2024 and 2023: Year Ended December 31, (In thousands) 2024 2023 Change % Change Ancillary products and services $ 55 $ 444 $ (389 ) (88 )% Extraction solutions 11,844 15,669 (3,825 ) (24 )% Hemp-derived beverages 18 — 18 100 % Sales discounts on extraction solutions (2,237 ) (971 ) (1,266 ) (130 )% Total revenue $ 9,680 $ 15,142 $ (5,462 ) (142 )% Revenues decreased by $5.5 million, or 142%, for the year ended December 31, 2024, as compared to the same period in 2023.

The following table provides a breakdown of our revenue from continuing operations for the years ended December 31, 2025 and 2024: Year Ended December 31, (In thousands) 2025 2024 Change % Change Non-licensing Revenue 9,504 18 9,486 52700 % Licensing Revenue 7,779 — 7,779 — % Total revenue $ 17,283 $ 18 $ 17,265 95917 % Revenues increased by $17.3 million for the year ended December 31, 2025, as compared to the same period in 2024.

Convertible Note On November 5, 2024, we issued a Secured Convertible Note (the “Note”) to RSLGH, LLC (the “Investor”), a subsidiary of Green Thumb Industries Inc. (“Green Thumb”). The Note is a secured obligation and ranks senior to all of our indebtedness except for certain indebtedness set forth in the Note.

Indebtedness Convertible Notes On November 5, 2024, the Company issued a secured convertible note (the “November 2024 Note”) to RSLGH, LLC (“RSLGH”), a subsidiary of Green Thumb, a related party.

The following table provides a breakdown of our cost of goods sold from continuing operations for the years ended December 31, 2024 and 2023: Year Ended December 31, (In thousands) 2024 2023 Change % Change Ancillary products and services $ 1,804 $ 2,252 $ (448 ) (20 )% Extraction solutions 7,123 8,872 (1,749 ) (20 )% Hemp-derived beverages 88 — 88 100 % Total cost of goods sold $ 9,015 $ 11,124 $ (2,109 ) (19 )% Cost of goods sold decreased by $2.1 million, or 19%, for the year ended December 31, 2024, as compared to the same period in 2023.

The following table provides a breakdown of our cost of goods sold from continuing operations for the years ended December 31, 2025 and 2024: Year Ended December 31, (In thousands) 2025 2024 Change % Change Non-licensing Revenue 7,093 89 7,004 7870 % Total cost of goods sold $ 7,093 $ 89 $ 7,004 — Cost of goods sold represents costs associated with the hemp-derived products sales (non-licensing).

The decrease is attributable to the reductions in personnel, consulting services and materials purchased. 39 Other Expense, Net Year Ended December 31, (In thousands) 2024 2023 Change % Change Interest expense, net $ (256 ) $ (2,145 ) $ 1,889 (88 )% Other income, net 19 1,358 (1,339 ) (99 )% Change in fair value of warrant liabilities (17,902 ) 4,695 (22,597 ) (481 )% Loss on extinguishment of notes payable — (4,311 ) 4,311 (100 )% Total other expense, net $ (18,139 ) $ (403 ) $ (17,736 ) 4401 % Interest expense, net Interest expense was approximately $0.3 million for the year ended December 31, 2024 compared to interest expense of approximately $2.1 million for the same period in 2023.

Of the SG&A expense incurred for the year ended December 31, 2025, $10.6 million was attributable to related parties. 28 Other Expense, Net Year Ended December 31, (In thousands) 2025 2024 Change % Change Interest expense, net $ (3,203 ) $ (256 ) $ (2,947 ) 1151 % Change in fair value of warrant liabilities 299 (17,902 ) 18,201 (102 )% Other income, net 500 — 500 — % Total other expense, net $ (2,404 ) $ (18,158 ) $ 15,754 (87 )% Interest expense, net Interest expense, net was approximately $3.2 million for the year ended December 31, 2025 compared to interest expense, net of approximately $0.3 million for the same period in 2024.

On May 21, 2024, we and CP entered into the Consolidated Note Amendment, pursuant to which CP could elect, in lieu of shares of Common Stock issuable upon conversion of the Restated Note, to instead receive Pre-Funded Warrants. The conversion price applicable to the Pre-Funded Warrants remained unchanged at $21.90.

On May 22, 2025, the Company and RSLGH entered into a second amendment to the November 2024 Note, which amended the terms to, among other things, permit RSLGH to elect, subject to any required approvals under Nasdaq listing rules, to receive pre-funded warrants in lieu of shares of Common Stock upon conversion of the November 2024 Note at a conversion price equal to the existing conversion price of $3.158 less the $0.001 exercise price of each pre-funded warrant.

The significant decrease in our interest expense was primarily driven by the reduction in notes payable due to conversion. Other income, net Other income, net decreased by $1.3 million, or (99)%, for the year ended December 31, 2024, compared to the same period in 2023.

Other income, net Other income, net increased by $0.5 million, for the year ended December 31, 2025, compared to the same period in 2024. The comparative change is primarily attributable to the employee retention credit refunds received for the year ended December 31, 2025.

Net cash was increased by changes in operating assets and liabilities of $13.7 million.

Net cash was increased by changes in operating assets and liabilities of $7.0 million. Cash Flows from Investing Activities For the year ended December 31, 2025, net cash used in investing activities was $55.1 million, which primarily resulted from the related party transactions with MC Brands and VCP.

Removed

On September 16, 2019, Agrinamics amended its articles of incorporation to reflect a name change to Agrify Corporation. Reverse Stock Splits On July 5, 2023, we effected a 1-for-20 reverse stock split of our common stock.

Added

The Company’s portfolio of consumer-packaged goods brands includes RYTHM, incredibles, Dogwalkers, Beboe, &Shine, Doctor Solomon’s, Good Green and Señorita. Our Señorita brand offers consumers hemp-derived tetrahydrocannabinol (“THC”) beverages and are sold at top retailers, online and through direct-to-retail partnerships.

Removed

All share and per share information has been retroactively adjusted to give effect to the reverse stock split for all periods presented unless otherwise indicated. On October 8, 2024, we effected a 1-for-15 reverse stock split of our common stock.

Added

The Señorita brand mirrors well-known cocktails like a margarita – in four flavors – classic Lime Jalapeño Margarita, Mango Margarita, Paloma and Ranch Water.

Removed

All share and per share information has been retroactively adjusted to give effect to the reverse stock splits for all periods presented unless otherwise indicated. No fractional shares of common stock were issued as a result of these reverse stock splits.

Added

Other hemp-derived products including incredibles and Beboe edible products are primarily sold online and through direct-to-retail partnerships. In addition to the sale of hemp-derived products (“Non-licensing Revenue”), the Company licenses its brands to be manufactured and distributed in exchange for a licensing fee (“Licensing Revenue”).

Removed

Any fractional shares in connection with these reverse stock splits were rounded up to the nearest whole share and no stockholders received cash in lieu of fractional shares.

Added

RYTHM has also historically been a leading provider of innovative cultivation and extraction solutions for the cannabis industry.

Removed

The reverse stock splits had no impact on the number of shares of common stock that we are authorized to issue pursuant to our articles of incorporation or on the par value per share of the common stock.

Added

Please refer to Item 1 and the notes to the consolidated financial statements for details on recent developments and significant transactions during the period.

Removed

Proportional adjustments were made to the number of shares of Common Stock issuable upon exercise or conversion of our outstanding stock options and warrants, the exercise price or conversion price (as applicable) of our outstanding stock options and warrants, and the number of shares reserved for issuance under our equity incentive plan.

Added

Our consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

Removed

All share and per share information included in this Annual Report on Form 10-K has been retroactively adjusted to reflect the impact of these reverse stock splits. 27 Recent Developments February 2025 Changes in Directors On February 5, 2025 the Company announced that Peter Shapiro and Sanjay Tolia were appointed to our Board of Directors (the “Board”) effective January 31, 2025.

Added

The comparative increase in revenue was primarily driven by the transactions with MC Brands and VCP in May and August 2025, respectively in addition to all revenue for the year ended December 31, 2024 from the Cultivation Business and Extraction Business being presented as part of discontinued operations.

Removed

The Company also announced Richard Drexler’s departure from the Board effective as of January 31, 2025.

Added

The comparative increase in cost of goods sold was primarily driven by the hemp-derived THC edibles operations associated with the MC Brands transaction in May 2025, in addition to all cost of goods sold for the year ended December 31, 2024 from the Cultivation Business and Extraction Business being presented as part of discontinued operations.

Removed

Public Offering On February 27, 2024, we entered into a placement agency agreement with Alexander Capital, LP as placement agent, pursuant to which we agreed to issue and sell an aggregate of 184,000 shares of Common Stock, and, in lieu of Common Stock to certain investors that so chose, Pre-Funded Warrants (“Pre-Funded Warrants”) to purchase 264,245 shares of Common Stock.

Added

The comparative change is primarily attributable to marketing and consulting costs to support the growth of the hemp-derived THC products sales (non-licensing) in addition to the presentation of SG&A expense from the Cultivation Business and Extraction Business for the year ended December 31, 2024 as part of discontinued operations.

Removed

The public offering price for each share of Common Stock was $5.70, and the offering price for each Pre-Funded Warrant was $5.69, which equals the public offering price per share of the Common Stock, less the $0.001 per share exercise price of each Pre-Funded Warrant.

Added

The change is attributable mainly to the increase of $72.0 million principal under the Convertible Notes. Included interest expense, net for the year ended December 31, 2025 is $4.1 million incurred from a related party.

Removed

The Offering was made pursuant to a registration statement on Form S-1 that we filed with the SEC on January 26, 2024 and was declared effective on February 14, 2024. Raymond Chang, our former Chairman and Chief Executive Officer, participated in the offering on the same terms as other investors.

Added

The year ended December 31, 2025 includes $1.2 million of interest income earned on cash deposits with no comparable amount earned in the year ended December 31, 2024.

Removed

The net proceeds from the public offering were approximately $2.2 million, after deducting placement agent fees and commissions and expenses. The public offering closed on February 28, 2024.

Added

The Company is required to evaluate whether there are conditions or events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued.

Removed

Debt Modification; Warrant Amendments On May 21, 2024, we and CP entered into an amendment to the Convertible Note (the “Consolidated Note Amendment”), pursuant to which CP could elect, in lieu of shares of Common Stock issuable upon conversion of the Convertible Note, to instead receive Pre-Funded Warrants. The conversion price applicable to the Pre-Funded Warrants remained unchanged at $21.90.

Added

Substantial doubt exists when conditions and events, considered in aggregate, indicate that it is probable that a company will be unable to meet its obligations as they become due within one year after the date that the consolidated financial statements are issued. We have a history of recurring net losses and negative cash flow in operating activities.

Removed

Immediately following the execution of the Consolidated Note Amendment, CP elected to convert $11.5 million of outstanding principal into a Pre-Funded Warrant exercisable at issuance for up to 525,114 shares of Common Stock having a fair value of approximately $2.9 million (the “CP Warrant Conversion”).

Added

However, we believe our positive working capital as of December 31, 2025 inclusive of $32.2 million of cash and cash equivalents, anticipated contractual Licensing Revenue and ability to address our Convertible Notes will be sufficient to meet our cash requirements through at least the 12-month period following the date that these consolidated financial statements were issued.

Removed

On May 21, 2024, we and GIC Acquisition, LLC (“GIC”), the holder of an unsecured promissory note (the “GIC Note”), amended and restated the GIC Note (the “Restated GIC Note”) to increase the aggregate principal amount to approximately $2.29 million, extend the maturity date to December 31, 2025, and provide that the Restated Junior Note may be converted into Common Stock of the Company or, at GIC’s election, Pre-Funded Warrants, in each case at a conversion price of $4.65.

Added

Contractual debt maturities of $80 million exist through February 2027, with $72 million of the Convertible Notes held by Green Thumb, a related party. The election of these notes to be payable in cash upon maturity could raise substantial doubt about the Company’s ability to continue as a going concern.

Removed

Immediately following the execution of the Restated GIC Note, GIC elected to convert all of the outstanding principal under the Restated GIC Note into a Pre-Funded Warrant exercisable at issuance for up to 492,204 shares of Common Stock having a fair value of approximately $2.7 million (the “GIC Warrant Conversion”, and, collectively with the CP Warrant Conversion, the “Related Party Warrant Conversions”).

Added

However, while these contractual maturities require management attention, management believes it is probable that the obligations will be addressed through extension or conversion consistent with historical practice. As such, our financial statements have been prepared on a going concern basis.

Removed

On June 30, 2024, we executed an amendment to the Pre-Funded Warrants, pursuant to which we revised certain provisions of the Pre-Funded Warrants to (i) remove the adjustment to the exercise price of the Pre-Funded Warrants when there is a bona fide equity financing with the primary purpose of raising capital (the “Adjustment Provisions”) and (ii) increase the threshold for a change of control from 50% to greater than 50%.

Added

The November 2024 Note matured on November 5, 2025 and accrued interest at a 10.0% annualized rate. The principal amount of the November 2024 Note was converted into pre-funded warrant on the maturity date. The November 2024 Note provided for advances of up to $20 million in the aggregate, of which $10 million was advanced upon issuance.

Removed

On August 12, 2024, our stockholders approved a proposal to amend the Pre-Funded Warrants to add the Adjustment Provisions at a future date. Pursuant to that approval, on August 28, 2024, we entered into amendments to the Pre-Funded Warrants to insert the Adjustment Provisions.

Added

The November 2024 Note was amended on May 8, 2025 to issue pre-funded warrants in lieu of cash interest, with 18,614 pre-funded warrants issued on May 8, 2025 and an additional 11,373 pre-funded warrants issued on September 1, 2025, which were issued in lieu of the cash interest that would otherwise be payable under the November 2024 Note.

Removed

As a result of the warrant amendments and the subsequent issuance of 189,645 shares of Common Stock to Ionic Ventures, LLC (“Ionic”) at an effective purchase price of approximately $2.109 per share of Common Stock, the number of shares of Common Stock underlying the Pre-Funded Warrant held by CP was adjusted to 5,452,288 and the number of shares of Common Stock underlying the Pre-Funded Warrant held by GIC was adjusted to 1,085,122.

Added

The number of pre-funded warrants is equal to the cash interest amount otherwise payable on the November 2024 Note divided by the closing share price on May 8, 2025, the effective date of the amendment. No changes were made to the conversion price of the principal amount of the November 2024 Note.

Removed

On August 30, 2024, CP partially exercised its Pre-Funded Warrant and entities affiliated with Mr. Chang and Ms. Chan received an aggregate of 383,127 shares of Common Stock upon the exercise.

Added

On November 3, 2025, the holder of the November 2024 Note elected to convert the outstanding principal and interest, into pre-funded warrants. The outstanding principal and accrued interest amounts of $10 million and $175 thousand respectively, resulted in the issuance of 3,167,564 and 55,433 pre-funded warrants, respectively.

Removed

On September 27, 2024, we further amended the Pre-Funded Warrants to remove the Adjustment Provisions from each warrant and (ii) preventing the holders from any additional exercise of either of the Pre-Funded Warrants at any time between September 27, 2024 and October 9, 2024. 28 Change in Accounting Firm On June 20, 2024 after an evaluation process, the Audit Committee of our Board (the “Audit Committee”) dismissed Marcum LLP as our independent registered public accounting firm and appointed MATSUURA (“Matsuura”) as our independent registered public accounting firm for the fiscal year ending December 31, 2024, in each case effective as of June 25, 2024.

Added

On May 22, 2025, the Company issued secured convertible notes with an aggregate original principal amount of $30.0 million (collectively the “May 2025 Notes”) to RSLGH and to certain other third-party accredited investors.

Removed

On June 30, 2024, the audit practice of Matsuura was combined in a transaction pursuant to which Matsuura merged its operations with GuzmanGray, a professional corporation (“GuzmanGray”). On July 19, 2024, Matsuura resigned as our auditors and the Audit Committee appointed GuzmanGray as our independent registered public accounting firm effective as of the Effective Date.

Added

The May 2025 Notes are secured obligations of the Company and rank senior to all indebtedness of the Company except for the the August 2025 Notes, which ranks on parity with the May 2025 Notes.

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Top changes in RYTHM, Inc.'s 2025 10-K

Item 1. Business

Item 1A. Risk Factors

Item 1C. Cybersecurity

Item 2. Properties

Item 3. Legal Proceedings

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Other RYM 10-K year-over-year comparisons