SCHEDULE: Green Thumb Affiliates Boost RYTHM Stake to 49.99%

Green Thumb Industries affiliates, including RSLGH, LLC, have increased their beneficial ownership in RYTHM, Inc. to 49.99% through various equity instruments and warrant issuances.

Summary

• Reporting Persons, including RSLGH, LLC and Green Thumb Industries Inc. (GTI), beneficially own an aggregate of 13,098,015 shares of RYTHM, Inc. Common Stock.
• This ownership represents 49.99% of RYTHM, Inc.'s outstanding Common Stock, based on approximately 2,002,568 shares outstanding as of October 20, 2025.
• The beneficial ownership includes 25,000 shares purchased on May 27, 2025, and 7,300 shares purchased on May 28, 2025.
• It also includes 666,661 shares acquired on November 5, 2024, and 6,169,702 shares underlying warrants acquired on the same date, subject to a 49.99% beneficial ownership limitation.
• Further holdings include 185,500 shares underlying warrants acquired on December 12, 2024, subject to a 4.99% limitation.
• Additional shares are derived from warrants issued as interest payments for the November 2024 Note (18,614 shares), the May 2025 Note (1,147,471 shares), and the August 2025 Note (1,526,718 shares), with some subject to a 49.99% limitation.
• The total also accounts for 3,166,561 shares underlying the November 2024 Note (subject to 49.99% limitation) and 43,145 shares potentially issuable as interest within 60 days from the November 2024 and May 2025 Notes.
• The latest additions include 141,343 shares underlying SSA Warrants, issued on October 20, 2025, as payment for amounts due under the Amended and Restated Shared Services Agreement, with the number of warrants determined by dividing the dollar amount due by $26.68.
• All Notes and SSA Warrants are subject to conversion or exercise restrictions as required by applicable Nasdaq rules.

Sentiment

Score: 7

Explanation: The filing is largely a factual update on beneficial ownership, reflecting the ongoing execution of previously established agreements. The significant and increasing stake by Green Thumb Industries and its affiliates can be viewed as a positive for RYTHM, Inc., indicating strong strategic backing and potential for future collaboration, but it does not contain new operational or financial performance data to significantly shift sentiment.

Positives

• A significant strategic investor, Green Thumb Industries Inc. (GTI), and its affiliates have consolidated a substantial ownership stake (49.99%) in RYTHM, Inc., indicating strong commitment and potential for strategic alignment.
• The continued acquisition of shares and warrants by the Reporting Persons suggests ongoing investment and belief in the Issuer's future.

Negatives

• The high concentration of beneficial ownership (49.99%) by a single group of Reporting Persons could limit the influence of other shareholders and potentially reduce liquidity.
• Beneficial ownership limitations (e.g., 49.99% or 4.99%) on various warrants and notes restrict immediate full conversion, potentially delaying the full realization of the Reporting Persons' stake.

Risks

• Conversion or exercise of the November 2024 Note, May 2025 Note, August 2025 Note, and SSA Warrants are subject to restrictions under applicable Nasdaq rules, which could impact the timing and extent of the Reporting Persons' equity stake.
• Beneficial ownership limitations imposed on certain warrants (e.g., 49.99% or 4.99%) may prevent the Reporting Persons from exceeding certain ownership thresholds without further regulatory or corporate actions.

Future Outlook

The Reporting Persons intend to continuously review and reconsider their positions in RYTHM, Inc. They may engage in communications with management and the board, discuss with other stockholders, explore potential business combinations or dispositions, and make recommendations regarding capitalization, ownership structure, or board composition. They also reserve the right to purchase additional securities or sell existing holdings based on market conditions and the Issuer's performance.

Industry Context

This filing highlights the deepening strategic relationship between Green Thumb Industries Inc. (GTI), a prominent multi-state operator in the U.S. cannabis industry, and RYTHM, Inc. GTI's affiliates increasing their beneficial ownership to nearly 50% suggests a strong intent for influence or control over RYTHM, Inc.'s operations and strategic direction. The mention of a Shared Services Agreement and Trademark and Recipe License Agreement further indicates an integrated operational and brand strategy, common in the fragmented and evolving cannabis market where larger players seek to consolidate or align with smaller entities to expand market reach and operational efficiencies.

Comparison to Industry Standards

• The accumulation of a near 50% stake by a strategic investor like Green Thumb Industries (GTI) in RYTHM, Inc. is a significant move, often seen in industries undergoing consolidation or where a larger player seeks to integrate a key partner or subsidiary. This level of ownership is comparable to strategic investments made by major cannabis companies like Curaleaf Holdings, Trulieve Cannabis Corp., or Cresco Labs in smaller, regional operators to expand their footprint or product lines.
• The use of convertible notes and warrants as a primary mechanism for increasing ownership is a common financing strategy in growth-oriented sectors, including cannabis, allowing for capital infusion while deferring immediate equity dilution. This is similar to how many emerging cannabis companies secure funding from institutional investors or strategic partners.
• The inclusion of beneficial ownership limitations (e.g., 49.99%) is standard practice to comply with regulatory thresholds, particularly in highly regulated industries like cannabis, where exceeding certain ownership percentages can trigger additional licensing or regulatory scrutiny.

Corporate Governance

Related Party Transactions

• The SSA Warrants were issued as payment pursuant to the Amended and Restated Shared Services Agreement, dated May 20, 2025, between RYTHM, Inc. and Vision Management Services, LLC (VMS), with VMS assigning its right to RSLGH, LLC (a Reporting Person).
• The filing references a Purchase Agreement, dated May 20, 2025, between VCP IP Holdings, LLC and Agrify Corporation, and a Trademark and Recipe License Agreement, dated May 20, 2025, between MC Brands LLC and GTI Core, LLC, indicating broader transactional relationships within the Green Thumb Industries ecosystem.
• A Purchase Agreement, dated August 27, 2025, between VCP23, LLC (a Reporting Person) and Agrify Corporation, and a Trademark and Recipe License Agreement, dated August 27, 2025, between VCP IP Holdings, LLC and GTI Core, LLC, further highlight related party dealings.

Stakeholder Impact

• Shareholders: The increased beneficial ownership by Green Thumb Industries affiliates could lead to greater strategic alignment and potential operational synergies, but also a more concentrated ownership structure.
• Employees: A strong strategic investor could provide stability and resources for growth, potentially impacting employment opportunities and company direction.
• Customers and Suppliers: Strategic integration with Green Thumb Industries could lead to changes in product offerings, supply chain, or market focus for RYTHM, Inc.

Next Steps

• Reporting Persons may review and reconsider their investment positions in RYTHM, Inc. at any time.
• Potential engagement in communications with RYTHM, Inc. management and board of directors.
• Possible discussions with other stockholders or third parties regarding RYTHM, Inc.'s business, including potential business combinations or dispositions.
• Consideration of recommendations or proposals to RYTHM, Inc. concerning changes to capitalization, ownership structure, or board composition.
• Future purchases or sales of RYTHM, Inc. securities by the Reporting Persons.

Key Dates

Recommendation

The filing is an update on beneficial ownership, not a report on financial performance or operational results. While the increased stake by Green Thumb Industries affiliates to nearly 50% is strategically significant and suggests strong backing, it does not provide new information to warrant a 'buy' or 'sell' recommendation based solely on this filing. Investors should 'hold' and monitor future strategic actions and financial disclosures from RYTHM, Inc. and Green Thumb Industries to assess the long-term implications of this concentrated ownership.

Keywords

RYTHM Inc., Green Thumb Industries, GTI, RSLGH LLC, Schedule 13D, beneficial ownership, warrants, convertible notes, equity stake, SEC filing, cannabis industry, strategic investment