NOTE 24 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through May 14, 2025, which is the date these consolidated financial statements were issued, and has concluded that the following subsequent events have occurred that would require disclosure in the consolidated financial statements or disclosure in the notes to the consolidated financial statements.

On April 18, 2025, the Company issued an unsecured promissory note in the principal amount of $0.33 million which matures on July 31, 2025 and bears no interest. The Company may prepay the principal balance in full at any time without penalty. On May 8, 2025, the Company amended and restated the unsecured promissory note dated April 18, 2025 wherein the note may be converted at the Lender’s election into a convertible promissory note. The conversion shall include the option to convert into shares of capital stock issued by Blüm at a conversion price equal to 85% of a $20.90 million pre-money valuation of Blüm (equal to a per share price of $0.98 on a fully diluted basis). In addition, the Company shall grant to the Lender warrants to purchase up to 122,642 shares of the Company's common stock, at an exercise price of $0.53 per share. The warrants may be exercised at the election of the holder on a cashless basis in the event that the underlying common shares are unregistered. The warrants are exercisable until May 8, 2028 upon which the warrants shall be automatically exercised on a cashless basis.

On April 30, 2025, the Bankruptcy Court held a hearing and granted Debtors’ motion to approve the settlement and settlement agreement with People’s.  A written court order granting the Debtors’ motion was signed by the Bankruptcy Court on May 2, 2025. The “Effective Date” in the settlement is after the appeal period has expired with no stay pending appeal having been granted.  There is a 14-day appeal period, which will expire at 11:59 p.m. on May 16, 2025. Refer to "Note 3 - Bankruptcy Filing" for further information. 

On April 30, 2025, the Company amended and restated the Notes dated January 8, 2025 wherein the maturity date was extended to January 8, 2027 and the conversion feature was amended. The Note, as amended, may be converted at the Lender’s election into a convertible promissory note that shall include an automatic conversion into shares of capital stock issued by Blüm at a conversion price equal to 85% of a $20.90 million pre-money valuation of Blüm (equal to a per share price of $0.98 on a fully diluted basis).

On  May 2, 2025, the Company executed and delivered an Unsecured Promissory Note in the principal amount of $1.00 million (the “Note”) to an investor (the “Lender”). The Note has a maturity date of  May 2, 2027 and bears interest at a rate of 8.0% per annum payable monthly in arrears, commencing on June 15, 2025. The Company may prepay the principal balance in full at any time without penalty. The Note is convertible at the Lender’s election into a convertible promissory note that shall include an automatic conversion into the shares of capital stock issued by Blüm at a conversion price equal to 85% of a $20.90 million pre-money valuation of Blüm (equal to a per share price of $0.98 on a fully diluted basis). The Company shall grant to the Lender warrants to purchase up to 377,358 shares of the Company's common stock, at an exercise price of $0.53 per share. The warrants may be exercised at the election of the holder on a cashless basis in the event that the underlying common shares are unregistered. The warrants are exercisable until May 2, 2028 upon which the warrants shall be automatically exercised on a cashless basis.

On May 7, 2025, the Company amended and restated the unsecured promissory note dated February 25, 2025 wherein the note may be converted at the Lender’s election into a convertible promissory note. The conversion shall include the option to convert into shares of capital stock issued by Blüm at a conversion price equal to 85% of a $20.90 million pre-money valuation of Blüm (equal to a per share price of $0.98 on a fully diluted basis). In addition, the Company shall grant to the Lender warrants to purchase up to 75,472 shares of the Company's common stock, at an exercise price of $0.53 per share. The warrants may be exercised at the election of the holder on a cashless basis in the event that the underlying common shares are unregistered. The warrants are exercisable until May 7, 2028 upon which the warrants shall be automatically exercised on a cashless basis.

On May 8, 2025, the Company appointed Brad Hirsch to the Board of Directors (the “Board”), effective May 8, 2025. Mr. Hirsch will serve as a member of the Company's (i) Audit Committee, (ii) Compensation Committee, and (iii) Governance and Nominating Committee. The Board has determined that Mr. Hirsch is an independent director under Nasdaq Stock Market Listing Rule 5605(a)(2). Mr. Hirsch is a licensed attorney and business executive with over 25 years of experience in law, corporate leadership, and regulatory compliance. Admitted to the California State Bar in 1997, he established The Law Office of Bradley L. Hirsch in 2001, providing strategic counsel in litigation, contract law, real estate, and regulatory matters.  From 2007 to 2012, Mr. Hirsch served as In-House Counsel at FIT Development, LP, a private real estate development firm and has occupied executive roles within highly regulated industries, notably insurance and cannabis.  His diverse professional experience as external counsel, in-house advisor, and senior corporate executive grants him a comprehensive perspective in addressing complex business and regulatory challenges.  Mr. Hirsch earned his J.D. from Golden Gate University School of Law and his B.A. from California State University at Northridge.

On May 13, 2025, the Company executed an Amended and Restated Binding Letter of Intent ("A&R LOI"), as previously disclosed in press releases dated January 21, 2025 and February 4, 2025, to acquire 100% of the issued and outstanding common stock of a licensed retail cannabis operator located in the Bay Area (the "Target"). The revised terms provide for total consideration of $2.0 million, comprising $1.3 million in cash—including the assignment of an existing $500,000 senior secured convertible promissory note, and $500,000 in common stock of the Company priced at $1.15 per share. The cash portion includes an $800,000 payment made from escrow upon execution of the A&R LOI and related Management Services Agreement ("MSA"), granting immediate operational and economic control of the Target to the Company. Additionally, the $500,000 senior secured convertible promissory note previously funded by the Company will be assigned to the seller at closing and structured as a Seller Note with a thirty-month maturity, amortized at 8% simple interest, secured by the Target. The transaction further includes contingent performance-based earn-outs totaling up to $0.2 million payable in cash or stock, tied to specific revenue milestones for the twelve-month period following closing. The Company anticipates signing definitive transaction documents promptly, with the final closing subject to customary regulatory approvals at the state and municipal levels.