SCHEDULE: Green Thumb Industries Affiliate Boosts RYTHM Stake to 49.99%

Affiliates of Green Thumb Industries Inc. have increased their beneficial ownership in RYTHM, Inc. to 49.99% through warrant conversions and share acquisitions, signaling a control purpose.

Summary

• Reporting Persons, including RSLGH, LLC and its parent entities culminating in Green Thumb Industries Inc. (GTI), beneficially own 13,154,551 shares of RYTHM, Inc. Common Stock.
• This ownership represents 49.99% of the outstanding Common Stock, based on approximately 2,002,568 shares outstanding as of November 3, 2025.
• The beneficial ownership includes 25,000 shares purchased on May 27, 2025, and 7,300 shares purchased on May 28, 2025.
• It also comprises 666,661 shares acquired on November 5, 2024, and 6,169,702 shares underlying warrants acquired on the same date.
• Further components include 185,500 shares underlying warrants acquired on December 12, 2024, 61,759 shares underlying Interest Warrants, and shares underlying the May 2025 Note (1,147,520 shares) and August 2025 Note (1,526,769 shares).
• A significant portion, 3,222,997 shares, underlies a Conversion Warrant issued on November 3, 2025, upon the full conversion of the November 2024 Note at a conversion price of $3.157.
• Additionally, 141,343 shares underlie warrants issued pursuant to a Shared Services Agreement (SSA Warrants).
• All warrants and notes are subject to beneficial ownership limitations, primarily 49.99%, and restrictions on conversion or exercise as required by Nasdaq rules.
• The Reporting Persons explicitly state a 'control purpose' with respect to the Securities Exchange Act of 1934.

Sentiment

Score: 7

Explanation: The filing indicates a strong, continued strategic interest and deepening commitment from Green Thumb Industries affiliates in RYTHM, Inc., evidenced by significant beneficial ownership and a stated 'control purpose.' This suggests potential for future corporate actions that could be positive for the company, despite the inherent risks of such a large stake.

Positives

• The continued accumulation and conversion of convertible instruments by Green Thumb Industries affiliates demonstrates a strong, ongoing strategic interest in RYTHM, Inc.
• The conversion of the November 2024 Note into a Conversion Warrant indicates progress in solidifying GTI's equity position in RYTHM, Inc.
• The explicit statement of a 'control purpose' suggests a clear strategic direction and potential for future value creation through deeper integration or acquisition.

Negatives

• The beneficial ownership limitations (e.g., 49.99%) on various instruments restrict the immediate full conversion or exercise of all underlying shares, potentially delaying full integration or control.
• The discrepancy between the aggregate beneficially owned shares (13,154,551) and the stated basis for percentage calculation (2,002,568 shares outstanding) could lead to investor confusion regarding the true diluted ownership structure.

Risks

• Beneficial ownership limitations, particularly the 49.99% cap and Nasdaq rules, may hinder the Reporting Persons' ability to fully exercise control or convert all their instruments immediately.
• Future actions by the Reporting Persons, such as purchasing additional securities, selling existing holdings, or proposing changes to capitalization or board structure, could introduce volatility or uncertainty for other shareholders.
• The stated 'control purpose' could lead to significant changes in RYTHM, Inc.'s operations, management, or strategic direction, which may not align with all minority shareholder interests.

Future Outlook

Reporting Persons may review and reconsider their positions, formulate new plans, and potentially engage in further actions regarding their investment in RYTHM, Inc. These actions could include communications with management and the board, discussions with other stockholders, recommendations on capitalization, ownership structure, board composition, potential business combinations or dispositions, and further purchases or sales of securities.

Industry Context

This filing highlights the continued strategic consolidation within the cannabis industry, with a major player like Green Thumb Industries (GTI) increasing its significant stake in RYTHM, Inc. Such moves are common as larger, more established companies seek to expand market share and operational synergies through strategic investments or acquisitions of smaller entities.

Comparison to Industry Standards

• A beneficial ownership stake of 49.99% is a common threshold in corporate governance, often used to gain significant influence without triggering full control provisions or mandatory takeover bids, which is a standard strategic maneuver in M&A.
• The explicit 'control purpose' stated by GTI affiliates aligns with aggressive growth strategies seen in consolidating industries, where dominant players like GTI (a leading multi-state operator) aim to expand their footprint.
• The use of convertible notes and warrants to build a substantial equity position is a standard financing and investment mechanism, allowing for staged investment and potential future full acquisition, similar to strategies employed by private equity or strategic investors in various sectors.

Related Party Transactions

• Warrants acquired pursuant to a warrant purchase agreement between RSLGH, LLC and Double or Nothing LLC dated December 12, 2024.
• Trademark and Recipe License Agreement dated May 20, 2025, between MC Brands LLC and GTI Core, LLC.
• Amended and Restated Shared Services Agreement dated May 22, 2025, between Agrify Corporation and Vision Management Services, LLC.
• Purchase Agreement dated May 20, 2025, between VCP IP Holdings, LLC and Agrify Corporation.
• Trademark and Recipe License Agreement dated August 27, 2025, between VCP IP Holdings, LLC and GTI Core, LLC.
• Purchase Agreement dated August 27, 2025, between VCP23, LLC and Agrify Corporation (VCP23, LLC is a Reporting Person).

Stakeholder Impact

• Shareholders: The significant and increasing beneficial ownership by GTI affiliates, coupled with a 'control purpose,' suggests potential for strategic corporate actions (e.g., acquisition, merger) that could impact share value. Minority shareholders may face reduced influence.
• Management and Board: The Reporting Persons may propose changes to the Issuer's capitalization, ownership structure, and board composition, potentially leading to shifts in strategic direction and leadership.
• Creditors: The conversion of notes into equity-linked instruments alters the company's capital structure, potentially impacting the risk profile for creditors, though the filing does not detail specific changes to debt covenants.

Next Steps

• Reporting Persons may engage in communications with RYTHM, Inc. management and board of directors.
• Discussions with other stockholders or third parties regarding RYTHM, Inc.'s business, including potential business combinations or dispositions, may occur.
• Recommendations or proposals concerning RYTHM, Inc.'s capitalization, ownership structure, board structure, or operational performance may be made.
• Reporting Persons may purchase additional securities or sell some or all of their existing holdings in RYTHM, Inc.

Key Dates

Recommendation

The filing indicates a strong, strategic interest from Green Thumb Industries affiliates in RYTHM, Inc., with a significant beneficial ownership stake and a stated 'control purpose.' This suggests potential for future corporate actions, such as a full acquisition or deeper integration, which could drive share price appreciation. However, the beneficial ownership limitations and the inherent uncertainties of such strategic maneuvers warrant a 'hold' recommendation for existing investors, awaiting clearer indications of GTI's next steps. New investors might consider initiating a position, but with awareness of the potential for volatility and the long-term nature of such a strategic play.

Keywords

Green Thumb Industries, RYTHM Inc, Schedule 13D, Beneficial Ownership, Warrant Conversion, Convertible Note, Equity Stake, Corporate Control, Cannabis Industry, SEC Filing