v3.26.3
Debt
 9 Months Ended
Sep. 30, 2026
Debt [Abstract]  
Debt

Note 9 —Debt

 

The Company’s debt consisted of:

 

(In thousands)   September 30,
2026		     December 31,
2025		  
Related party debt:            
Convertible Notes   $ 72,000     $ 72,000  
Total related party debt     72,000       72,000  
Less: current portion     (72,000 )     (27,000 )
Related party debt, net of current   $ —     $ 45,000  
                 
Short-term debt:                
PPP Loan   $ 624     $ 620  
Convertible Note - Current     —       1  
Total short-term debt   $ 624     $ 621  
                 
Long-term debt:                
Convertible Note   $ 8,000       8,000  
Total long-term debt     8,000       8,000  
Less: current portion     (8,000 )     (3,000 )
Long-term debt, net of current   $ —     $ 5,000  

 

Convertible Notes

 

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. The May 2025 Notes are secured obligations of the Company and rank senior to all indebtedness of the Company except for the August 2025 Notes, which rank on parity with the May 2025 Notes. 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. The principal amount of the May 2025 Notes will be payable on the maturity date. The May 2025 Notes may be converted into Common Stock or, at the election of the holder, into pre-funded warrants, and, as of September 30, 2026, were subject to a beneficial ownership limitation for RSLGH of 49.99% and a beneficial ownership limitation for other holders of 4.99%, in each case subject to applicable Nasdaq listing rules. If a holder elects to convert the May 2025 Notes into Common Stock, the conversion price per share will be $23.53, equal to the most recent closing price of the Common Stock on the Nasdaq Capital Market at the time the May 2025 Notes were issued, subject to customary adjustments for certain corporate events. If a holder elects to convert the May 2025 Notes into pre-funded warrants, and for interest payments payable in the form of pre-funded warrants, the conversion price per pre-funded warrant will be equal to the $23.53 conversion price less the $0.001 exercise price of the warrant. The conversion of the May 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.

  

On August 25, 2025, the Company issued secured convertible notes with an aggregate original principal amount of $50.0 million (collectively the “August 2025 Notes” and, together with the May 2025 Notes, the “Convertible Notes”) to RSLGH and to certain other third-party accredited investors. The August 2025 Notes are secured obligations of the Company and rank senior to all indebtedness of the Company except for the May 2025 Notes, which rank on parity with the August 2025 Notes. 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. The August 2025 Notes may be converted into Common Stock or, at the election of the holder, into pre-funded warrants, and, as of September 30, 2026, were subject to a beneficial ownership limitation for RSLGH of 49.99% and a beneficial ownership limitation for other holders of 4.99%, in each case subject to applicable Nasdaq listing rules. If a holder elects to convert the August 2025 Notes into Common Stock, the conversion price per share will be $29.475, equal to the Minimum Price as such term is defined under Nasdaq Listing Rule 5635 at the time the August 2025 Notes were issued, subject to customary adjustments for certain corporate events. If a holder elects to convert the August 2025 Notes into pre-funded warrants, and for interest payments elected to be paid in the form of pre-funded warrants, the conversion price per pre-funded warrant will be equal to the $29.475 conversion price less the $0.001 exercise price of the warrant. 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.

 

On August 10, 2026, at a special meeting of the Company’s stockholders, the Company’s stockholders approved the issuance to RSLGH of shares of Common Stock underlying certain convertible promissory notes and pre-funded warrants, and shares issuable pursuant to shared services agreements, in accordance with Nasdaq Listing Rule 5635. Following the special meeting, the Company entered into an amendment agreement (the “Amendment”) with RSLGH and Vision Management Services, LLC (“VMS”), each a subsidiary of Green Thumb, amending the Convertible Notes, the pre-funded warrants, and the shared services agreements to remove beneficial ownership limitations, including the 49.99% beneficial ownership limitation, on the conversion of the Convertible Notes and the exercise of outstanding and future pre-funded warrants, effective as of October 10, 2026 (the “Amendment Effective Date”).

 

The Convertible Notes impose certain customary affirmative and negative covenants upon the Company, including covenants relating to ranking and reservation of shares. If an event of default under one or more of the Convertible Notes occurs and is not waived, the holder can elect to accelerate all or a portion of the then-outstanding principal amount of the applicable Note, plus accrued and unpaid interest, including default interest, which accrues at a rate per annum equal to 14% from the date of a default or event of default. The Company was in compliance with these covenants as of September 30, 2026.

 

The Company determined the Convertible Notes do not contain features that qualify as embedded derivatives in accordance with ASC 815. Borrowings under the Convertible Notes as of September 30, 2026 totaled $80.0 million, of which $72.0 million held by Green Thumb is recorded as Related party debt, current and $8.0 million is recorded within Long-term debt, current on the Company’s condensed consolidated balance sheet.

 

Related party interest expense incurred on the Convertible Notes was approximately $1.8 million and $1.4 million for the three months ended September 30, 2026 and 2025, respectively. Related party interest expense incurred on the Convertible Notes was approximately $5.4 million and $2.2 million for the nine months ended September 30, 2026 and 2025, respectively.

 

Interest expense incurred on the Convertible Notes related to unaffiliated third parties amounted to approximately $201 thousand and $123 thousand for the three months ended September 30, 2026 and 2025, respectively. Interest expense incurred on the Convertible Notes related to unaffiliated third parties amounted to approximately $604 thousand and $156 thousand for the nine months ended September 30, 2026 and 2025, respectively.

 

As of September 30, 2026, future minimum principal payments on all debt positions, excluding accrued interest amounts, were as follows:

 

Years ending December 31 (In thousands)      
Remaining 2026   $ 30,624  
2027     50,000  
Total future payments   $ 80,624