NOTE 1 – DESCRIPTION OF BUSINESS

Blum Holdings, Inc. (“Blüm” or the “Company”) is a publicly traded holding company with operations throughout California committed to providing the highest quality of medical and adult use cannabis products and related services. The Company is home to Korova, a brand of high potency products across multiple product categories, currently available in California. The Company formerly operated Blüm Santa Ana, a premier cannabis dispensary in Orange County, California, which was sold in June 2024. The Company previously owned dispensaries in California which operated as Blüm in Oakland and Blüm in San Leandro, which were sold in November 2024. In May 2024, the Company began operating the retail store, Cookies Sacramento, and providing consulting services for two additional dispensaries located in Northern California.

Blum Holdings, Inc. is a holding company with the following subsidiaries, including variable interest entities that are consolidated by the Company:

References in the consolidated financial statements to “the Company”, “Blüm”, “we”, “us”, or “our” are intended to mean Blum Holdings, Inc., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis. References in the consolidated financial statements to “the Company” prior to the Reorganization on January 12, 2024 refer to Unrivaled Brands, Inc.

Corporate Reorganization

On January 12, 2024, Unrivaled Brands, Inc., a Nevada corporation (“Unrivaled”), completed a corporate reorganization (the “Reorganization”) pursuant to which the Company became the ultimate parent of Unrivaled. As part of the Reorganization, Unrivaled entered into an Agreement and Plan of Merger, dated October 9, 2023 (the “Reorganization Agreement”), with Blüm and Blum Merger Sub, Inc., a Nevada corporation and a wholly-owned subsidiary of Blüm (“Merger Sub”), in which, among other things and subject to its terms and conditions, as described below, Merger Sub merged with and into Unrivaled, with the separate existence of Merger Sub ceasing and with Unrivaled surviving as a direct, wholly-owned subsidiary of Blüm. After the Reorganization, the Company continues to engage in the business conducted by it prior to the Reorganization and the directors and executive officers of Unrivaled continued to serve in the same capacities for Blüm.
 
The Reorganization Agreement provides that at the effective time of the Reorganization, on January 12, 2024, all of the issued and outstanding shares of Unrivaled’s Common Stock, par value $0.001 per share, were converted automatically on a one-for-one basis into shares of Blüm’s Common Stock, par value $0.001 per share, and all of the issued and outstanding shares of Unrivaled’s Series V preferred stock, par value $0.001 per share, were converted on a one-for-one basis into shares of Blüm’s respective classes of preferred stock, par value $0.001 per share. On February 12, 2024, the Company began trading as "BLMH" on the OTCQB.

Additionally, effective January 12, 2024, (i) each outstanding option to purchase shares of Unrivaled's Common Stock (a “UNRV Option”) was converted automatically into a stock option to purchase an identical number of shares of Blüm Common Stock, (ii) each outstanding warrant to purchase shares of Unrivaled's Common Stock (a “UNRV Warrant”) was converted automatically into a warrant to purchase an identical number of shares of Blüm Common Stock, and (iii) each outstanding promissory note convertible into shares of Unrivaled's Common Stock (a “UNRV Note”) was automatically converted into a promissory note convertible into an identical number of shares of Blüm Common Stock, in each case, on the same terms and conditions as applied to the UNRV Option, UNRV Warrant and UNRV Note, respectively, immediately prior to the effective date and as set forth in the documentation relating to such UNRV Option, UNRV Warrant and UNRV Note.
 
Immediately prior to the completion of the Reorganization, effective January 12, 2024, Unrivaled completed a reverse stock split of its Common Stock at a ratio of 1-for-100 (the “Reverse Stock Split”). As a result of the Reorganization, the current stockholders of Unrivaled became stockholders of Blüm with the same number and percentage of shares of Blüm as they held in Unrivaled immediately prior to the Reorganization, subject to any changes from the implementation of the Reverse Stock Split. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this Reverse Stock Split and adjustment of the preferred stock conversion ratios.