MRMD 10-K & 10-Q changes, risk factors and insider trading

Our business faces significant risks and uncertainties. Certain important factors may have a material adverse effect on our business prospects, financial condition and results of operations, and they should be carefully considered. Accordingly, in evaluating our business, and a potential investment in our shares, we encourage you to consider the following discussion of risk factors in its entirety in addition to other information contained in or incorporated by reference into this Annual Report on Form 10-K and our other public filings with the United States Securities and Exchange Commission (“SEC”).SEC. Other events that we do not currently anticipate or that we currently deem immaterial may also affect our business, prospects, financial condition and results of operations.

In the United States, cannabis is largely regulated at the state level. Each state in which we operate or that we are currently proposing to operate authorizes, as applicable, medical and/or adult use cannabis production and distribution by licensed or registered entities. More than 40 states have legalized cannabis in some form. However, under United States federal law, the possession, use, cultivation, and transfer of cannabis and any related drug paraphernalia are illegal, and any such acts are criminalized under the Controlled Substances Act, as amended, which we refer to as the “CSA.” Cannabis remains illegal under United States federal law and is considered a Schedule I controlled substance under the CSA. In 2022, former President Biden directed the Drug Enforcement Administration (DEA) and the Department of Health and Human Services (“HHS”) to initiate an administrative process to review how cannabis is scheduled under federal law. HHS later recommended that cannabis be recategorized to Schedule III, and as of February 2025 the DEA was still reviewing the HHS recommendation, with preliminary hearings anticipated to commence this spring. In 2025, President Trump issued an executive order directing the Department of Justice to "take all necessary steps to complete the rulemaking process related to rescheduling marijuana to Schedule III of the CSA in the most expeditious manner in accordance with Federal law, including 21 U.S.C. 811." Should cannabis be rescheduled, it would mean cannabis would be defined as having accepted medical use within federal law. There are several other important implications of rescheduling. It would increase consumer trust in cannabis, likely resulting in an increase in our sales. Absent rescheduling, cannabis is still perceived by many to have a high potential for abuse and it is not generally approved or accepted for medical use.

Additionally, its rescheduling would eliminate IRS Tax Code 280E, a punitive tax stipulation imposed on businesses like ours that sells products categorized as Schedule I or II, Specifically, the code stipulates that “no deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities that comprise such trade or business) consists of trafficking in controlled substances within the meaning of Schedule I andor II of the Controlled Substances Act, which is prohibited by federal law or the law of any state in which such trade or business is conducted,” This provision has been applied by the United States Internal Revenue Service, or the “IRS,” to cannabis operations, prohibiting them from deducting expenses directly associated with cannabis businesses. The elimination of 280E is anticipated to save the company several million dollars paid annually in federal taxes.

At December 31, 20242025 we had 381.5396.9 million shares of common stock outstanding and are authorized to issue up to 700 million shares. Therefore, we are still authorized to issue a substantial number of additional shares of common stock without obtaining shareholder approval. In addition, weas currentlyof haveFebruary outstanding24, 4,908,3332026, there were 26,900,000 shares of an amended and restated class of Series B preferredConvertible stockPreferred Stock outstanding (which convert on a one-for-one basis into shares of our common stock) and 1,155,274 shares of Series C preferred stock (which convert on a five-for-one basis into shares of our common stock). Our Board of Directors is authorized to issue up to a total of 50 million shares of preferred stock (including the previously issued shares) with terms it designates without any further shareholder approval. In the event we elect to issue additional shares of common stock in connection with any financing, acquisition or otherwise or issue additional shares of preferred stock, current stockholders could find their holdings substantially diluted, which means they would own a smaller percentage of our company.

As of December 31, 2024,2025, there were potentially dilutive securities convertible into shares of common stock comprised of stock options convertibleexercisable intofor 34,271,921up to 19,155,921 shares of common stock; warrants convertibleexercisable intofor 38,089,476up to 21,548,936 shares of common stock; shares of Series B preferred stock convertible intofor up to 4,908,333 shares of common stock; shares(the of "Series CB preferredPreferred stock convertible into 5,776,370 shares of common stockStock"); and restricted stock units convertible intofor 7,706,125up to 9,887,289 shares of common stock. In addition, in February 2026, pursuant to the Restructuring and Exchange Agreement (described below), we cancelled the Series B Preferred Stock then outstanding and issued 26,900,000 shares of New Series B Preferred Stock convertible for up to 26,900,000 shares of common stock. Additional convertible securities will likely be granted to our officers, directors, employees, or consultants as part of their compensation and such convertible securities will likely be issued in connection with financings. The exercise of outstanding stock options and warrants and the conversion of our notes and debentures will dilute the percentage ownership of our other stockholders. Sales, or the expectation of sales, of a substantial number of shares of our common stock in the private or public markets could adversely affect the prevailing market price of our common stock.

We are a multi-state cannabis operator in the United States, headquartered in Norwood, Massachusetts, dedicated to improving lives every day through our high-quality products, our actions, and our values. We develop, own,own and manage seed to sale state-licensed, state-of-the-art, regulatory-compliant facilities for the cultivation, production,production and dispensing of medicinal and adult-use cannabis. We have created and continue to develop our own brands of premium cannabis flower, concentrates, edibles,edibles and other precision-dosed products utilizing our proprietary strains and formulations. We also license our proprietary brands, along with other top cannabis products, in select domestic markets.markets, although licensing revenues are not material to our overall results of operations. Cannabis remains illegal under United States federal law. Our operations are conducted in compliance with applicable state and local laws and regulations in the jurisdictions in which we operate.

We completed two acquisitions duringin 2024the thatyear wereended December 31, 2024, which we accounted for as asset purchases. On April 9, 2024, we acquired 100% of the membership interests of Allgreens Dispensary, LLC ("Allgreens"), which held a conditional adult useadult-use cannabis dispensary license in Illinois (the "Allgreens Acquisition").Illinois. On April 5, 2024, we acquired 100% of the membership interests of Our Community Wellness & Compassionate Care Center, Inc. ("MedLeaf"), which held a retail dispensary license in Maryland (the "MedLeaf Acquisition").Maryland. The MedLeaf dispensary had ceased operations since July 1, 2023, but we reopened it on August 19, 2024, upon receiving regulatory approval to commence adult use retail sales.

Management’s discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience, knowledge of current conditions and beliefs of what could occur in the future given available information. If actual results differ significantly from management’s estimates and projections, there could be a material effect on our condensed consolidated financial statements. We consider the following accounting policies to be both those most important to the portrayal of our financial condition and those that require the most subjective judgment: accounts receivable; valuation of inventory; estimated useful lives and depreciation and amortization of property and equipment and intangible assets; accounting for acquisitions and business combinations; loss contingencies and reserves; stock-based compensation; and accounting for income taxes.

We allocate the purchase price of acquired assets and companies to identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net amount of the acquisition date fair values of the assets acquired and the liabilities assumed and represents the expected future economic benefits from other assets acquired in the acquisition or business combination that are not individually identified and separately recognized. Significant judgments and assumptions are required in determining the fair value of assets acquired and liabilities assumed, particularly acquired intangible assets, which are principally based upon estimates of the future performance and cash flows expected from the acquired asset or business and applied discount rates. While we use our best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates and assumptions are inherently uncertain and subject to refinement. If different assumptions are used, it could materially impact the purchase price allocation and our financial position and results of operations. Any adjustments to assets acquired or liabilities assumed subsequent to the purchase price allocation period are included in operating results in the period in which the adjustments are determined. Intangible assets typically are comprised of trademarks and trade names, licenses and customer relationships, and non-compete agreements.

We are subject to ongoing business risks arising in the ordinary course of business that affect the estimation process of the carrying value of assets, the recording of liabilities, and the possibility of various loss contingencies. An estimated loss contingency is accrued when it is probable that a liability has been incurred or an asset has been impaired and the amount of loss can be reasonably estimated. We regularly evaluate current information available to determine whether such amounts should be adjusted and we record changes in estimates in the period they become known. We are subject to legal claims from time to time. We reserve for legal contingencies and legal fees when the amounts are probable and estimable.

•Other revenue - comprised of real estate rentalsrental toincome from our cannabis-licensed client, supply procurement fees from facilitating purchases of resources, supplies and equipment for our cannabis-licensed client and third parties, management fees for providing our cannabis-licensed clients with comprehensive oversight of their operations, and licensing fees from the licensing of our branded products to wholesalers and regulated dispensaries.

Our total revenue increased $9.4$2.1 million, or 6.3%,1.3%, in the year ended December 31, 2025 ("2025") compared to the year ended December 31, 2024 ("2024"). comparedThis increase was attributable to the year ended December 31, 2023 ("2023"), the result of higher product revenue, partially offset by lower other revenue.

Our total product revenue in 20242025 increased $10.1$4.4 million, or 7.0%,2.9%, comprised of $14.1$6.7 million of higher wholesale revenue that was partially offset by $4.0$2.3 million of lower retail revenue. The increase in wholesale revenue was primarily attributable to higher wholesale revenue generated in MarylandIllinois and toMaryland, coupled with the inclusion of wholesale revenue in IllinoisDelaware in 2024. Although wholesale revenue increased in every state, Maryland and Illinois accounted2025 for the majorityperiod ofsubsequent to the increase.FSC OurAcquisition Date. The decrease in retail operations reported higher revenue in Massachusetts2025 andwas Maryland;primarily however,attributable theseto increaseslower weresales in our Illinois dispensaries, partially offset by lowerthe inclusion of FSC retail salesrevenue infor certainthe ofperiod oursubsequent Illinoisto dispensaries.the FSC Acquisition Date.

Our cost of revenue represents the direct costs associated with therevenue generation of our revenue,generation, including licensing, packaging, supply procurement, manufacturing, supplies, depreciation, amortization of acquired intangible assets, and other product-related costs.

The increase in our personnel expenses in 20242025 compared to 20232024 was primarily duerelated to increased headcount in connection with our acquisitions and expanded presence, coupled with increases in certain employee benefit expenses. These increases were partially offset by cost reductions related to the hiringstrategic elimination and consolidation of additionalcertain staff to support higher levels of projected revenue from existing and expanded operations, as well as increased headcount arising from our other recent acquisitions.positions. Personnel costs increased to approximately 18% of revenue in 2025, compared to approximately 17% of revenue in 2024, compared to approximately 15% of revenue in 2023.2024.

The increasedecrease in our marketing and promotion expenses in 20242025 compared to 20232024 was primarily attributable to our continuedplanned reductions to these expenditures; however, we continue to focus on upgrading ourjudicious marketing initiatives in order tothat expand the branding and distribution of our licensed products. Marketing and promotion costsexpenses were 2.5% of revenue in 2025, compared to approximately 4% of revenue in both 2024 and 2023.2024.

The increase in our general and administrative expenses in 20242025 compared to 20232024 was primarily attributable to increaseshigher infacilities, facility-relatedstock-based expenses, depreciation and amortization of fixed assets,compensation and insurance and travel expenses. These increases principallywere relatelargely tooffset theby additiondecreases in certain other general and administrative expenses, such as depreciation, professional fees, and travel and entertainment. General and administrative expenses were approximately 16% of newrevenue facilitiesin each of 2025 and related fixed assets.2024.

Acquisition-related and other expenses include those expenses related to acquisitionsacquisitive activities and other significant transactions that we would otherwise not have incurred, and include professional and services fees, such as legal, audit, consulting, paying agentconsulting and other fees. We incurred $1.0 million ofOur acquisition-related and other expense in 2024,2025 primarily related to the FSC Acquisition and other acquisitive activities. Our acquisition-related and other expense in 2024 primarily related to the acquisitions of MedLeaf and Allgreens, whichcoupled were both consummated in April 2024, andwith non-cash expense for warrants to purchase our common stock issued to an entity in consideration for introductory and other services rendered in connection with certain acquisitivefunding and financing activities. We incurred $0.7 million of acquisition-related and other expense in 2023, primarily related to our acquisitive activities.transactions.

Overall, the increase in our operating expenses in 20242025 compared to 20232024 was primarily attributable to our higher bad debt, personnel, and general and administrative, and marketing and promotionadministrative expenses, partially offset by reversallower adjustmentsmarketing toand badpromotion, debtand acquisition-related and other expense.

Interest expense primarily relates to interest on mortgages and notes payable.payable, Interestas expensewell in 2024 includes interest onas the CREM Loan (as described below) and in 2023, the CA Credit Agreement (as described below) and, to a lesser extent, the CREM Loan.. Interest income primarily relates to our notes receivable.

Our net interest expense decreasedincreased by $2.2$0.5 million in 20242025 compared to 2023.2024. This decreaseincrease was primarily due to lower non-cashthe interest expenseon inadditional 2024,finance coupledleases withand lowerthe interestrefinancing ratesof onone of our CREM Loan compared to our previous financing facility.mortgages.

We had cash andcash, cash equivalents and restricted cash of $7.3$8.9 million and $14.6$7.3 million at December 31, 20242025 and 2023,2024, respectively. In addition to the discussions below of our cash flows from operating, investing, and financing activities, please also see our discussion of non-GAAP Adjusted EBITDA in the section “Non-GAAP Measurement” below, which discusses an additional financial measure not defined by GAAP, which our management also uses to measure our liquidity.

On November 16, 2023, Mari Holdings MD LLC, Hartwell Realty Holdings LLC, Kind Therapeutics USA, LLC, ARL Healthcare Inc., and MariMed Advisors, Inc., each a wholly-owned direct or indirect subsidiary of the Companyours (collectively, the "CREM Borrowers") entered into a Loan Agreement (the "CREM Loan Agreement"), by and among the CREM Borrowers,Borrowers and Needham Bank, a Massachusetts co-operative bank (the "CREM Lender") pursuant to which the CREM Lender loaned to the CREM Borrowers an aggregate principal amount of $58.7 million (the "CREM Loan Transaction"). TheWe Company hashave fully guaranteed the obligations of the CREM Borrowers under the CREM Loan Transaction and pledged to the CREM Lender itsour equity ownership in each CREM Borrower. The CREM Lender has a first priority security interest in all of the CREM Borrowers' operating assets in Maryland and Massachusetts and first priority mortgages on the CREM Borrowers' properties owned in Maryland and Massachusetts.

The CREM Loan Transaction maturesis infor a term of ten years and has an interest rate for the initial five years of 8.43% per annum. The interest rate will reset after five years to the FHLB Rate (the Classic Advance Rate for Fixed Rate advances for a period of five years for an amount greater than or equal to the loan amount, as such rate is defined and published by the Federal Home Loan Bank of Boston), plus 3.50%. As required, weWe made interest-only payments for the first twelve months of the term of the loan, with payments thereafter based upon a twenty-year amortization schedule.

The CREM Lender initially released $52.8 million to the CREM Borrowers (the "Initial CREM Distribution")., Thewith the remaining proceeds of $5.9 million wouldplaced be heldinto in escrow to complete the expansion of our Hagerstown, Maryland cultivation facility (the "Hagerstown Facility"). During the year ended December 31, 2024, $5.1 million of the escrowed portion of the loan proceeds was released to us. Any unused proceeds willwould be released to us after completion of the Hagerstown Facility expansion. We used $46.8 million of the Initial CREM Distribution to fully repay certain of our outstanding debt.debt obligations. These payments were comprised of $32.7 million to repay the CAprevious Termterm Loan,loan with Chicago Atlantic Admin, LLC, $11.9 million to repay the mortgage with Bank of New England for our New BedfordBedford, MA and Middleborough, MassachusettsMA properties (the "BNE Mortgage"), and $2.2 million to reduce the outstanding balance of the note we issued in connection with the Ermont2023 Acquisition.acquisition of Ermont, Inc. in Quincy, Massachusetts. Concurrent with the repayment of the BNE Mortgage, we refinanced these properties through the CREM Loan and accordingly, effective November 16, 2023, the mortgage on these properties is held by Needhamthe Bank,CREM Lender, which mortgage matures in 2033 and which outstanding amount is included as a component of the CREM Loan amount in our consolidated balance sheetsheets at each of December 31, 2023.2025 and 2024.

We are subject to ongoing business risks arising in the ordinary course of business that affect the estimation process of the carrying value of assets, the recording of liabilities, and the possibility of various loss contingencies. An estimated loss contingency is accrued when it is probable that a liability has been incurred or an asset has been impaired and the amount of loss can be reasonably estimated. We regularly evaluate current information available to determine whether such amounts should be adjusted and record changes in estimates in the period they become known. We are subject to legal claims from time to time. We reserve for legal contingencies and related legal fees when the amounts are probable and estimable.

Three and six months ended MarchJune 31,30, 2026 and 2025

We are typically considered the principal if we control the specified good or service before such good or service is transferred to our client, and typically considered the agent if we do not exertpossess such control. We may also be deemed to be the principal even if we engage another party (an agent) to satisfy some of the performance obligations on our behalf, provided we (i) take on certain responsibilities, obligations and risks, (ii) possess certain abilities and discretion, or (iii) fulfill other relevant indicators of the sale. If deemed an agent, we do not recognize revenue for the performance obligations we do not satisfy.

Revenue for the three and six months ended MarchJune 31,30, 2026 and 2025 was comprised of the following (in thousands, except percentages):

Our product sales increased by $1.7$2.3 million and $4.0 million, respectively, in the three and six months ended MarchJune 31,30, 20262026, compared to the three and six months ended MarchJune 31,30, 2025. The increase in retail sales in each of the current year periods was primarily attributable to our dispensaries in Delaware and Maryland,Maryland and, to a lesser extent, Ohio. These increases were partially offset by lower sales in our Massachusetts dispensaries and certain of our other dispensaries in Illinois and, to a lesser extent, our Massachusetts dispensaries.Illinois. The increase in our wholesale revenue in the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 was primarily attributable to higher wholesale revenue in Delaware and Illinois,Illinois and, to a lesser extent, Maryland, partially offset by lower wholesale revenue in Maryland.Missouri. TheBoth decreaseour inretail totaland otherwholesale revenue in the threesix months ended MarchJune 31,30, 2026 comparedbenefited tofrom the threeinclusion of a full six months ended March 31, 2025 was primarily attributable to the cessation of revenue recognition from managementDelaware, fees,as rentalthe incomeprior andyear othersix-month componentsperiod included only four months of othersuch income from FSC prior to its acquisition by us in March 2025.revenue.

Our cost of revenue, gross profit and gross margin for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands, except percentages):

The increaseincreases in our cost of revenue in both the three and six months ended MarchJune 31,30, 2026 compared to the threesame monthsprior endedyear March 31, 2025periods was primarily due to increases in certain production-related expenses, coupled with higher employee- and facilities-relatedemployee-related expenses. ThisThese increaseincreases were partially offset by reductions in certain inventory-related expenses. These increases primarily resulted from the inclusion of FSC expenses for the full quartersix-month period in 2026 and the expansion of our production footprint in Maryland.

Our operating expenses are comprised of personnel, marketing and promotion, general and administrative, acquisition-related and other, and bad debt expenses. Our operating expenses for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands, except percentages):

The decrease in ourOur marketing and promotion expenses increased slightly in the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 20252025, wasand primarilydecreased attributableslightly in the six months ended June 30, 2026 compared to ourthe plannedsix reductionsmonths toended theseJune expenditures;30, however,2025. weWe continue to focus on judicious marketing initiatives that expand the branding and distribution of our licensed products.

The increaseincreases in our general and administrative expenses in each of the three and six months ended MarchJune 31,30, 2026 compared to the respective three and six months ended MarchJune 31,30, 2025 were primarily attributable to higher facility-related,facility-related employeeexpenses, travelprofessional and entertainment,fees and depreciation expenses.expense. These increases in both current year periods were largelypartially offset by decreasesreductions in certainexpense otherrelated generalto our employee equity incentive program and administrative expenses, such as stock-based compensation, amortization of acquired intangible assets, and insurance.assets.

Acquisition-related and other expenses include those expenses related to acquisitive activities and other significant transactions that we would otherwise not have incurred, and include professional and services fees, such as legal, audit, consulting, paying agent and other fees. Our acquisition-related and other expenses in the three and six months ended MarchJune 31,30, 2026 primarily related to multiple pre-acquisitive and similar activities. Our acquisition-related and other expenses in the three and six months ended MarchJune 31,30, 2025 primarily related to the FSC Acquisition.Acquisition and other acquisitive activities.

We recorded $0.1$0.5 million and $0.6 million of bad debt expense in the three and six months ended MarchJune 31,30, 20262026, respectively, to reserve for certain trade receivable accounts. We recorded $1.4$0.2 million and $1.6 million of bad debt expense in the three and six months ended MarchJune 31,30, 2025, comprisedrespectively. ofThe $1.3six-month amount included $1.5 million of expense to fully reserve an amountamounts due from atwo credit card service providerproviders (the "Service Provider ReceivableReceivables") and $0.1 million of expense to reserve for certain trade accounts receivable accounts. TheOf the $1.5 million Service Provider Receivables, $1.3 million and the related reserve waswere reportedincluded as a componentcomponents of Other assets and $0.2 million and the related reserve were included as components of Accounts receivable in ourthe condensed consolidated balance sheetsbalances at each of MarchJune 31,30, 2026 and December 31, 2025.

Interest expense primarily relatesrelated to interest on mortgages and notes payable, as well as the CREM Loan (described below). Interest income primarily relatesrelated to our notes receivable.

Our net interest expense increased byin $0.2 million inboth the three and six months ended MarchJune 31,30, 2026 compared to the threerespective monthsprior endedyear Marchperiods. 31,These 2025.increases This increase waswere primarily due to the inclusion in the three months of March 31, 2026 of interest onrelated to new finance leases and automobile financing entered into inafter the thirdsecond quarter of 2025.

WeIn the first quarter of 2026, we recognized a gain on the extinguishment of debt of $0.7 million in connection with the Series B Restructuring Agreement described in the “Overview” section above.

We recorded income tax provisions of $2.7$4.7 million and $2.8$3.5 million in the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

We are subject to income taxes in the jurisdictions in which we operate, and consequently, income tax expense is a function of the allocation of taxable income by jurisdiction and the various activities that impact the timing of taxable events. As we operate in the federally illegal cannabis industry, we are subject to the limitations of the U.S. Internal Revenue Code of 1986, as amended (the “IRC”), Section 280E, under which taxpayers are only allowed to deduct expenses directly related to cost of goods sold of non-medical cannabis products. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E and a higher effective tax rate than most industries. As a result, our effective tax rate can be highly variable and may not necessarily correlate to pre-tax income or loss.

On April 23, 2026, the U.S. Department of Justice (the “DOJ”) issued a final order that placed both FDA-approved drugs containing cannabis and cannabis subject to a qualifying state medical list in Schedule III of the Controlled Substances Act. As a result, business conducted within these categories is no longer subject to IRC Section 280E, allowing for full deduction of ordinary and necessary business expenses. Due to the timing of when the final order was issued, we did not recordrecorded the impact in our income tax provision for the three months ended MarchJune 31,30, 2026. The impact of this change in 280E applicability was a reduction in income tax expense of approximately $786,000 in each of the three and six months ended June 30, 2026. We continue to monitor guidance from the DOJ and the U.S. Internal Revenue Service (the "IRS") to properly record and disclose any impact in our future financial statements.

In February 2026, the IRS filed a lien against FSC in connection with an approximate $1 million tax liability for the years 2023 and 2024,2024 tax periods, which periods were prior to the FSC Acquisition Date. We recorded this liability as part of the allocation of the purchase consideration for FSC. In June 2025, the IRS filed a lien against us in connection with an approximate $6 million 2023 tax liability. We are disputing these assessments through Collection Due Process Hearings and pursuing resolutions, including potential reductions or collection alternatives. While the matters are pending, IRS enforcement is generally stayed. Although the liabilities are fully accrued in the accompanying condensed consolidated financial statements, unfavorable outcomes could materially impact our operations and financial position.

We had cash, cash equivalents and restricted cash aggregating $7.9$8.4 million and $8.9 million at MarchJune 31,30, 2026 and December 31, 2025, respectively. In addition to the discussions below of our cash flows from operating, investing and financing activities, please also see our discussion of non-GAAP Adjusted EBITDA in the section “Non-GAAP Measurement” below, which discusses an additional financial measure not defined by GAAP which our management also uses to measure our liquidity.

The CREM Lender initially released $52.8 million to the CREM Borrowers (the "Initial CREM Distribution"), with the remaining proceeds of $5.9 million placed into in escrow to complete the expansion of our Hagerstown, Maryland cultivation facility (the "Hagerstown Facility"). Any unused proceeds would be released to us after completion of the Hagerstown Facility expansion. We used $46.8 million of the Initial CREM Distribution to fully repay certain of our outstanding debt obligations. These payments were comprised of $32.7 million to repay the previous term loan with Chicago Atlantic Admin, LLC, $11.9 million to repay the mortgage with Bank of New England for our New Bedford, MA and Middleborough, MA properties (the "BNE Mortgage"), and $2.2 million to reduce the outstanding balance of the note we issued in connection with the 2023 acquisition of Ermont, Inc. in Quincy, Massachusetts. Concurrent with the repayment of the BNE Mortgage, we refinanced these properties through the CREM Loan and accordingly, effective November 16, 2023, the mortgage on these properties is held by the CREM Lender, which mortgage matures in 2033 and which outstanding amount is included as a component of the CREM Loan amount in our consolidated balance sheets at MarchJune 31,30, 2026 and December 31, 2025.

Our operating activities provided $0.9$3.2 million and $1.3$1.6 million of cash in the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The change in cash from operating activities in the current year period compared to the prior year was primarily attributable to higher revenue, partially offset by expenses arising from expanding our geographic presence. These higher costs primarily relate to cultivation/manufacturing, personnel and facility-related expenses.

Our investing activities used $0.8$1.3 million and $0.1$0.7 million of cash in the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. During the threesix months ended MarchJune 31,30, 2026, we used $0.4 million for each of purchases of cannabis licenses and for capital expenditures. During the three months ended March 31, 2025, we used $0.3$0.7 million of cash for capital expenditures and $0.1$0.6 million for purchases and renewals of cannabis licenses. During the six months ended June 30, 2025, we used $0.6 million of cash for capital expenditures and $0.4 million in the aggregate for advances toward future business acquisitions and purchases and renewals of cannabis licenses. These amounts were partially offset by $0.2 million of cash acquired in connection with the FSC Acquisition and approximately $26,000 of proceeds from notes receivable.

Our financing activities used $1.1$2.4 million and $1.3$2.1 million of cash in the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. During the threesix months ended MarchJune 31,30, 2026, we made $1.1$2.3 million of aggregate principal payments on our outstanding mortgages, promissory notes and finance leases, and approximately $49,000$80,000 of distribution payments. During the threesix months ended MarchJune 31,30, 2025, we made $1.2$4.0 million of aggregate principal payments on our outstanding mortgages, promissory notes and finance leases, and approximately $58,000$81,000 of distribution payments.

Based on our current expectations, we believe our current cash and future funding opportunities will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next twelve months. The rate at which we consume cash is dependent on the cash needs of our future operations, including our contractual obligations at MarchJune 31,30, 2026, and our ability to raise additional cash through financing activities. Our contractual obligations at MarchJune 31,30, 2026 were primarily comprised of our outstanding CREM Loan, mortgages, promissory notes, and operating and finance leases. Our CREM Loan, mortgage and promissory note obligations totaled approximately $79 million at MarchJune 31,30, 2026.

The table below reconciles income (loss) from operations to Adjusted EBITDA for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):