12. Related Party Note Payable.

On August 15, 2024, and as amended on September 27, 2024 and January 15, 2025, the Company entered into an unsecured Delayed Draw Term Note (the “2024 Note”) with Air T Inc. (“Air T”) pursuant to which Air T agreed to advance from time to time until August 15, 2026, initially not on a revolving basis, up to $3,750,000 to fund the Company’s operations. In January 2026, the 2024 Note was amended to allow for borrowing on a revolving basis. The 2024 Note had a maturity date of August 15, 2029, subject to Air T’s right to demand payment on or after February 15, 2026. Air T Inc. beneficially owns approximately 34% of the Company’s outstanding common stock and is a member of a group of stockholders that collectively owns approximately 60% of the Company’s outstanding common stock. Amounts outstanding under the 2024 Note bore interest at a fixed rate of 8.0%, subject to a 3.0% increase upon certain events of default, payable on the maturity date. As of June 30, 2025, the Company had $3,350,000 of principal outstanding and $209,000 of paid-in-kind interest outstanding under the 2024 Note. The 2024 Note is included in total current liabilities on the condensed consolidated balance sheets as of June 30, 2025.

On September 15, 2025, the Company entered into unsecured Promissory Notes (collectively, the “2025 Notes”) with Air T, AO Partners I, L.P. (“AO Partners Fund”), and Gary S. Kohler (“Kohler,” and, together with Air T and AO Partners Fund, the “2025 Note Lenders”), pursuant to which the 2025 Note Lenders loaned the Company a total of $4,000,000, in the amounts of $1,100,156, $1,699,844, and $1,200,000, respectively. Kohler is Chief Investment Officer and Portfolio Manager of BCCM Advisors, LLC, which beneficially owns approximately 10.4% of the Company’s outstanding common stock. Proceeds from the 2025 Notes were used to fund operations of the Bloomia business. Amounts outstanding under the 2025 Notes bore interest at a fixed rate of 13.5% per year payable at the scheduled maturity date of June 1, 2027. The 2025 Notes restricted the Company’s ability to obtain additional indebtedness, either directly or through its subsidiaries, other than existing indebtedness and usual and customary indebtedness incurred in the operation of the Company’s business, which restrictions could be waived by the 2025 Note Lenders holding a majority interest in the 2025 Notes. No closing or origination fees were paid to any 2025 Note Lender.

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Interest expense incurred related to both the 2024 Note and 2025 Notes was $453,000 in the year ended June 30, 2026. Interest expense incurred related to the 2024 Note was $140,000 for the six months ended June 30, 2025. Interest expense incurred related to both the 2024 Note and 2025 Notes is included in non-cash paid in-kind interest expense on the condensed consolidated statements of cash flows.

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On April 1, 2026, in connection with the Company’s rights offering, $7,100,000 of principal and accrued interest for the related party notes, including the 2024 Note and the 2025 Notes, were converted into shares of common stock pursuant to the terms of the rights offering. As a result, as of April 1, 2026, the Company has no obligations outstanding under the 2024 Note and the 2025 Notes.

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On April 13, 2026, the Company entered into an unsecured Promissory Note (the “2026 Note”) with Kohler, pursuant to which Kohler loaned the Company the principal amount of $1,000,000. Proceeds from the 2026 Note were used towards the initial payment towards the Discounted Prepayment Amount on the Seller Note as described in Note 10 to these consolidated financial statements. The principal amount of the 2026 Note bears interest at a fixed rate of 11.5% per annum, which increases to 14.5% if there is an event of default under the 2026 Note (with the 2026 Note containing customary events of default for a promissory note of this type). The 2026 Note is scheduled to mature on March 31, 2029, at which time all principal and accrued and unpaid interest is due and payable in full. The Company has the right to prepay the 2026 Note in whole or in part at any time without penalty. Amounts paid or prepaid under the 2026 Note may not be reborrowed by the Company. No closing or origination fees were paid in connection with the 2026 Note. As of June 30, 2026, the 2026 Note had a balance of $1,025,000, of which $25,000 was accrued PIK interest.