NOTE 13 – NOTES PAYABLE

Notes payable consisted of the following:

On January 8, 2025, the Company issued unsecured promissory notes in the aggregate principal amount of $0.10 million (the “Notes”) amongst four separate investors (the “Lenders”). The Notes have a maturity date of December 30, 2026 with no interest accruing except for default interest and no prepayment penalty. The Notes are convertible at the Lenders’ individual election into a convertible promissory note that shall include an automatic conversion into the shares of capital stock issued by Blüm in its next bona fide equity financing with proceeds to Blüm of at least $10.00 million or such lesser amount as approved by Lenders at a conversion price equal to the lesser of (x) 85% of the lowest price paid by the cash investors in such financing and (y) the price represented by a $30.00 million pre-money valuation of the Company. The Company issued to the Lenders warrants to purchase, in the aggregate, up to 7,812 shares of the Company's Common Stock (the "Common Stock"), at an exercise price of $0.64 per share. Refer to "Note 18 – Warrants" for additional details. On April 30, 2025, the Company amended and restated the Notes wherein the maturity date was extended to January 8, 2027 and the conversion feature was amended. The Notes, 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). As a result, the Conversion Option no longer met the criteria in ASC 815-15 to be classified as a derivative liability. The amendment was deemed to be a substantial modification under ASC Subtopic 470-50 and a loss on extinguishment of debt of $0.01 million was recorded in the consolidated statement of operations for the nine months ended September 30, 2025.

On February 25, 2025, the Company issued an unsecured promissory note in the principal amount of $0.20 million which matured on September 30, 2025 and bears no interest. The Company may prepay the principal balance in full at any time without penalty. On May 7, 2025, the unsecured promissory note was amended 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 issued 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. Refer to "Note 18 – Warrants" for additional details. The amendment was deemed to be a substantial modification under ASC Subtopic 470-50 and a loss on extinguishment of debt of $0.04 million was recorded in the consolidated statement of operations for the nine months ended September 30, 2025. The balance of the unsecured promissory note was unpaid as of September 30, 2025. Management is renegotiating terms of the promissory note as of the date of these consolidated financial statements were issued.

On April 18, 2025, the Company issued an unsecured promissory note in the principal amount of $0.33 million which matured 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 unsecured promissory note was amended 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 issued 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. Refer to "Note 18 – Warrants" for additional details. The amendment was deemed to be a substantial modification under ASC Subtopic 470-50 and a loss on extinguishment of debt of $0.06 million was recorded in the consolidated statement of operations for the nine months ended September 30, 2025. The balance of the unsecured promissory note was unpaid as of September 30, 2025. Management is renegotiating terms of the promissory note as of the date of these consolidated financial statements were issued.

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 issued to the Lender warrants to purchase up to 377,358 shares of Common Stock, at an exercise price of $0.53 per share. Refer to "Note 18 – Warrants" for additional details.

On May 15, 2025, the Company amended and restated the unsecured promissory note dated November 12, 2024 in the aggregate principal amount of $0.80 million wherein the conversion feature was amended to 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). As a result, the Conversion Option no longer met the criteria in ASC 815-15 to be classified as a derivative liability. The amendment was deemed to be a substantial modification under ASC Subtopic 470-50 and a loss on extinguishment of debt of $0.08 million was recorded in the consolidated statement of operations for the nine months ended September 30, 2025.

On  September 16, 2025, the Company issued an unsecured promissory note in the principal amount of $0.50 million which matures on September 16, 2027 and bears interest at a rate of 8.0% per annum payable monthly in arrears, commencing on January 15, 2026. 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 issued to the Lender warrants to purchase up to 571,429 shares of Common Stock, at an exercise price of $0.35 per share. Refer to "Note 18 – Warrants" for additional details.

On  September 17, 2025, the Company issued an unsecured promissory note in the principal amount of $0.25 million which matures on September 17, 2027 and bears interest at a rate of 8.0% per annum payable monthly in arrears, commencing on January 15, 2026. 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 issued to the Lender warrants to purchase up to 285,714 shares of Common Stock, at an exercise price of $0.35 per share. Refer to "Note 18 – Warrants" for additional details.

On  September 26, 2025, the Company received an advance payment of $0.20 million in connection with a promissory note that is currently under verbal agreement. The promissory note has not yet been formally signed by the parties involved. The advance is recorded as a liability until the terms of the formal agreement are finalized. The Company is in the process of negotiating the terms of the promissory note as of the date of these consolidated financial statements were issued.