Form 4: RYTHM Issues Warrants to Green Thumb Subsidiary for Services

RYTHM, Inc. issued 141,343 pre-funded warrants to RSLGH, LLC, an indirectly wholly-owned subsidiary of Green Thumb Industries Inc., as payment for services.

Summary

• RYTHM, Inc. (RYM) issued 141,343 pre-funded warrants to RSLGH, LLC on October 20, 2025.
• The warrants were issued as payment for amounts due under an Amended and Restated Shared Services Agreement (SSA) dated May 20, 2025, between RYTHM, Inc. and Vision Management Services, LLC (VMS).
• VMS assigned its right to receive these pre-funded warrants to RSLGH, LLC.
• RSLGH, LLC is an indirectly wholly-owned subsidiary of Green Thumb Industries Inc., which is also a 10% owner of RYTHM, Inc.
• The number of pre-funded warrants was determined by dividing the dollar amount of applicable payments due by $26.68.
• Each pre-funded warrant has an exercise price of $0.001 and represents the right to buy one share of Common Stock.
• The exercise of these warrants is subject to a 49.99% beneficial ownership limitation and requires stockholder approval under applicable Nasdaq listing rules, if required.

Sentiment

Score: 5

Explanation: The filing is a routine disclosure of an insider transaction (Form 4) detailing the issuance of warrants as payment for services under a pre-existing agreement. It does not contain information that significantly alters the company's fundamental outlook or financial performance, thus warranting a neutral sentiment.

Positives

• RYTHM, Inc. utilized warrants as a form of payment, potentially conserving cash resources for other operational needs.
• Green Thumb Industries Inc., through its subsidiary RSLGH, LLC, increased its potential ownership stake in RYTHM, Inc. without a direct cash outlay for the warrants.

Negatives

• The issuance of warrants introduces potential future dilution for existing RYTHM, Inc. shareholders if the warrants are exercised.

Risks

• The exercise of the pre-funded warrants is subject to stockholder approval under applicable Nasdaq listing rules, which could delay or prevent their conversion to common stock.
• A 49.99% beneficial ownership limitation applies to the warrants, potentially restricting the full conversion of the acquired warrants if it exceeds this threshold.

Future Outlook

The filing does not provide specific forward-looking statements or guidance beyond the conditions for warrant exercise, such as stockholder approval under Nasdaq listing rules.

Industry Context

This transaction reflects ongoing financial arrangements and strategic partnerships within the cannabis industry, where companies like RYTHM, Inc. and Green Thumb Industries Inc. often engage in complex agreements for services and equity stakes. The use of warrants as payment can be a common mechanism to manage cash flow while aligning long-term interests between related entities.

Corporate Governance

Related Party Transactions

• The issuance of pre-funded warrants to RSLGH, LLC, an indirectly wholly-owned subsidiary of Green Thumb Industries Inc., constitutes a related party transaction. Green Thumb Industries Inc. is a 10% owner of RYTHM, Inc. and VMS (the original recipient of the payment rights) is also related to Green Thumb.

Stakeholder Impact

• Shareholders: Potential for future dilution upon warrant exercise, but also a mechanism for RYTHM to conserve cash.
• Green Thumb Industries Inc. (and its subsidiaries RSLGH, LLC and VMS): Increased potential equity stake in RYTHM, Inc. as payment for services.

Next Steps

• RYTHM, Inc. may need to seek stockholder approval for the exercise of the pre-funded warrants, as required by Nasdaq listing rules.

Key Dates

Keywords

RYTHM Inc., Green Thumb Industries, Pre-Funded Warrants, SEC Form 4, Beneficial Ownership, Insider Transaction, Equity Securities, Shared Services Agreement, Nasdaq Listing Rules, RYM, Cannabis Industry