Form 4: RYTHM 10% Owner Converts Note to Warrants

RSLGH, LLC, a 10% owner of RYTHM, Inc. and subsidiary of Green Thumb Industries, converted a $10.175 million convertible note into 3,222,997 pre-funded warrants.

Summary

• RSLGH, LLC, an indirectly wholly-owned subsidiary of Green Thumb Industries Inc., converted a convertible note into pre-funded warrants of RYTHM, Inc. on November 3, 2025.
• The convertible note, originally issued on November 5, 2024, had an outstanding principal of $10,000,000 and accrued but unpaid interest of $175,000 as of the conversion date, totaling $10,175,000.
• The conversion resulted in RSLGH, LLC acquiring 3,222,997 pre-funded warrants, calculated by dividing the total note value ($10,175,000) by the warrant conversion price of $3.157.
• Each pre-funded warrant has an exercise price of $0.001 per share.
• The exercise of these pre-funded warrants is subject to a 49.99% beneficial ownership limitation and may require stockholder approval under applicable Nasdaq listing rules.
• RSLGH, LLC and Green Thumb Industries Inc. are both identified as 10% owners and directors of RYTHM, Inc.

Sentiment

Score: 5

Explanation: This Form 4 filing is a factual report of a pre-planned conversion of a convertible note into warrants by a significant insider. It does not inherently convey positive or negative sentiment regarding the company's operational performance, but rather a change in the capital structure and the form of an existing investment.

Positives

• The conversion of the convertible note into warrants reduces RYTHM, Inc.'s debt obligations, replacing it with potential future equity.
• The transaction signifies continued investment and commitment from a significant 10% owner and director, RSLGH, LLC, and its parent Green Thumb Industries Inc.

Negatives

• The issuance of pre-funded warrants represents potential future dilution for existing shareholders if and when these warrants are exercised.

Risks

• Potential future dilution of existing shareholders if the 3,222,997 pre-funded warrants are exercised.
• The exercise of warrants is subject to a 49.99% beneficial ownership limitation.
• Exercise of warrants may require stockholder approval under applicable Nasdaq listing rules, which could introduce uncertainty or delay.

Future Outlook

The conversion of the convertible note into pre-funded warrants positions RSLGH, LLC to potentially increase its equity stake in RYTHM, Inc. in the future, subject to beneficial ownership limitations and potential stockholder approval.

Industry Context

This Form 4 filing primarily reports an insider transaction related to capital structure. It does not provide specific details to analyze broader industry trends or competitive landscape for RYTHM, Inc. However, given Green Thumb Industries Inc.'s involvement, RYTHM, Inc. is likely operating within the cannabis industry, where capital structure and financing can be complex due to regulatory environments.

Corporate Governance

Related Party Transactions

• RSLGH, LLC, the reporting person, is an indirectly, wholly-owned subsidiary of Green Thumb Industries Inc. Both RSLGH, LLC and Green Thumb Industries Inc. are identified as 10% owners and directors of RYTHM, Inc. The conversion of the convertible note into warrants between RYTHM, Inc. and RSLGH, LLC constitutes a related party transaction.

Stakeholder Impact

• Shareholders: Potential future dilution if the pre-funded warrants are exercised, increasing the number of outstanding common shares.
• Creditors: The conversion of the convertible note reduces the company's debt obligations, which could be viewed positively by creditors.

Next Steps

• Potential future exercise of the 3,222,997 pre-funded warrants by RSLGH, LLC.
• Potential requirement for RYTHM, Inc. stockholder approval for warrant exercise, as per Nasdaq listing rules.

Key Dates

Keywords

RYTHM, RYM, RSLGH, Green Thumb Industries, convertible note, pre-funded warrants, insider transaction, Form 4, equity conversion, capital structure