SCHEDULE: Green Thumb Affiliates Boost RYTHM Stake via Warrants

Green Thumb Industries' affiliates have increased their beneficial ownership in RYTHM, Inc. to 49.99% through the issuance of interest-bearing warrants.

Summary

• RSLGH, LLC and its affiliates, including Green Thumb Industries Inc. (collectively, the "Reporting Persons"), beneficially own an aggregate of 13,211,928 shares of RYTHM, Inc. Common Stock.
• This beneficial ownership represents 49.99% of the outstanding shares of Common Stock, based on approximately 2,149,148 shares outstanding as of March 1, 2026.
• On March 1, 2026, RYTHM, Inc. issued Interest Warrants exercisable for up to 57,377 shares of Common Stock to RSLGH, LLC as a payment of interest under the May 2025 Note.
• The number of shares underlying these Interest Warrants was determined by dividing the outstanding accrued but unpaid interest by the warrant conversion price.
• The Reporting Persons' beneficial ownership includes shares from direct purchases, various warrants (including those acquired on November 5, 2024, from Double or Nothing LLC, Interest Warrants, a Conversion Warrant, and SSA Warrants), and shares underlying the May 2025 Note and August 2025 Note.
• All warrants and notes are subject to beneficial ownership limitations, typically 49.99% or 4.99%, and restrictions on conversion or exercise as required under applicable Nasdaq rules.
• The Reporting Persons have no margin or other loans outstanding secured by Common Stock as of the filing date.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive update, reflecting Green Thumb Industries' continued strategic commitment to RYTHM, Inc. and the use of non-cash interest payments to conserve liquidity, though it also highlights ongoing debt obligations and potential future dilution.

Positives

• The issuance of warrants for interest payments allows RYTHM, Inc. to conserve cash, which can be beneficial for liquidity.
• Continued significant strategic involvement and investment by Green Thumb Industries and its affiliates in RYTHM, Inc. signals ongoing commitment and potential future support.

Negatives

• The issuance of warrants for interest payments indicates ongoing debt obligations for RYTHM, Inc.
• Potential future dilution for existing shareholders if the newly issued warrants and other convertible instruments are exercised.

Risks

• Potential dilution of existing shareholders' equity upon the conversion or exercise of the 13,211,928 shares underlying warrants and notes held by the Reporting Persons.
• Beneficial ownership limitations (e.g., 49.99% or 4.99%) and restrictions under Nasdaq rules may impact the Reporting Persons' ability to fully convert or exercise their instruments, potentially affecting their control or investment strategy.
• The Reporting Persons' stated 'control purpose' and potential future actions, such as changes to capitalization, ownership structure, or board composition, could introduce uncertainty or conflict for other stakeholders.

Future Outlook

The Reporting Persons may, at any time, review or reconsider their positions and formulate plans or proposals regarding their investment in RYTHM, Inc. This could include engaging in communications with management and the board, discussions with other stockholders, making recommendations on capitalization, ownership structure, board composition, potential business combinations or dispositions, or buying/selling additional securities.

Management Comments

• Benjamin Kovler is listed as an Authorized Signatory for Wellness Mgmt, CEO & President for For Success Holding Company, Manager for VCP23, LLC, Director & Authorized Signatory for GTI23, INC., and Chairman and Chief Executive Officer for Green Thumb Industries Inc.
• Bret Kravitz is listed as Corporate Secretary for RSLGH, LLC.

Industry Context

StockSavvy.ai notes that this filing highlights the continued strategic consolidation and financial maneuvering within the U.S. cannabis industry. Green Thumb Industries Inc. (GTI), a prominent multi-state operator, maintains a significant beneficial ownership stake in RYTHM, Inc., indicating a close operational or financial relationship. This type of substantial ownership by a major industry player often suggests strategic alignment, potential for future integration, or a means of controlling key assets or market segments. The use of warrants for interest payments is a common financing mechanism in growth-oriented sectors like cannabis, where cash conservation can be critical.

Corporate Governance

Related Party Transactions

• The issuance of Interest Warrants to RSLGH, LLC (an affiliate of Green Thumb Industries Inc.) as payment for interest under the May 2025 Note constitutes a related party transaction.
• The entire beneficial ownership structure, involving RSLGH, LLC, Wellness Mgmt, LLC, For Success Holding Company, VCP23, LLC, GTI23, Inc., and Green Thumb Industries Inc., represents a series of related party dealings and control relationships.

Stakeholder Impact

• Shareholders of RYTHM, Inc. face potential dilution from the conversion of warrants and notes held by the Reporting Persons.
• The significant beneficial ownership and stated 'control purpose' of the Green Thumb Industries group could influence RYTHM, Inc.'s strategic decisions, potentially impacting employees, customers, and suppliers.
• Creditors holding other debt instruments may be affected by the company's ongoing debt obligations and financing strategies, including the use of warrants for interest payments.

Next Steps

• Reporting Persons may engage in communications with RYTHM, Inc. management and board of directors.
• Reporting Persons may engage in discussions with other stockholders or third parties regarding RYTHM, Inc.'s business.
• Reporting Persons may make recommendations or proposals concerning RYTHM, Inc.'s capitalization, ownership structure, board structure, or potential business combinations/dispositions.
• Reporting Persons may purchase additional securities of RYTHM, Inc. or sell some or all of their existing investment.

Key Dates

Recommendation

The filing indicates a significant, ongoing strategic investment by Green Thumb Industries in RYTHM, Inc., which could be seen as a positive signal of long-term commitment. However, the use of warrants for interest payments highlights existing debt obligations and introduces potential future dilution for shareholders. Given the 'control purpose' stated by the Reporting Persons, there is potential for strategic shifts, but without further details on operational performance or specific future plans, a 'hold' recommendation is appropriate for seasoned investors to observe how this significant ownership translates into tangible strategic or operational changes.

Keywords

RYTHM Inc, Green Thumb Industries, Schedule 13D Amendment, Beneficial Ownership, Warrants, Convertible Notes, Cannabis Industry, Strategic Investment, Shareholder Control, SEC Filing