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| Debt | Note 9 —Debt
The Company’s debt consisted of:
Convertible Notes
On May 22, 2025, the Company issued secured convertible notes with an aggregate original principal amount of $30.0 million (collectively the “May 2025 Notes”) to RSLGH and to certain other third-party accredited investors. The May 2025 Notes are secured obligations of the Company and rank senior to all indebtedness of the Company except for the August 2025 Notes, which ranks on parity with the May 2025 Notes. The May 2025 Notes will mature on November 22, 2026 and accrue interest at a 10.0% annualized rate, with interest to be paid on the first calendar day of each September and March while the May 2025 Notes are outstanding, in pre-funded warrants, beginning September 1, 2025. The principal amount of the May 2025 Notes will be payable on the maturity date. The May 2025 Notes may be converted into Common Stock or, at the election of the holder, into pre-funded warrants, with a beneficial ownership limitation for RSLGH of 49.99% and a beneficial ownership limitation for other holders of 4.99%, in each case subject to applicable Nasdaq listing rules. If a holder elects to convert the May 2025 Notes into Common Stock, the conversion price per share will be $23.53, equal to the most recent closing price of the Common Stock on the Nasdaq Capital Market at the time the May 2025 Notes were issued, subject to customary adjustments for certain corporate events. If a holder elects to convert the May 2025 Notes into pre-funded warrants, and for interest payments payable in the form of pre-funded warrants, the conversion price per pre-funded warrant will be equal to the $23.53 conversion price less than the $0.001 exercise price of the warrant. The conversion of the May 2025 Notes into Common Stock and/or pre-funded warrants is subject to certain customary conditions and, to the extent necessary, the receipt of stockholder approval under Nasdaq listing rules.
On August 25, 2025, the Company issued secured convertible notes with an aggregate original principal amount of $50.0 million (collectively the “August 2025 Notes” and, together with the May 2025 Notes, the “Convertible Notes”) to RSLGH and to certain other third-party accredited investors. The August 2025 Notes are secured obligations of the Company and rank senior to all indebtedness of the Company except for the May 2025, which rank on parity with the August 2025 Notes. The August 2025 Notes will mature on February 25, 2027 and accrue interest at a 10.0% annualized rate, with interest to be paid on the first calendar day of each September and March, while the August 2025 Notes are outstanding beginning March 1, 2026. The principal amount of the August 2025 Notes will be payable on the maturity date. The August 2025 Notes may be converted into Common Stock or, at the election of the holder, into pre-funded warrants, with a beneficial ownership limitation for RSLGH of 49.99% and a beneficial ownership limitation for other holders of 4.99%, in each case subject to applicable Nasdaq listing rules. If a holder elects to convert the August 2025 Notes into Common Stock, the conversion price per share will be $29.475, equal to the Minimum Price as such term is defined under Nasdaq Listing Rule 5635 at the time the August 2025 Notes were issued, subject to customary adjustments for certain corporate events. If a holder elects to convert the August 2025 Notes into pre-funded warrants, and for interest payments elected to be paid in the form of pre-funded warrants, the conversion price per pre-funded warrant will be equal to the $29.475 conversion price less than the $0.001 exercise price of the warrant. The conversion of the August 2025 Notes into Common Stock and/or pre-funded warrants is subject to certain customary conditions and, to the extent necessary, the receipt of stockholder approval under Nasdaq listing rules.
The Company filed with the SEC a proxy statement with respect to a special meeting of stockholders to be held on August 10, 2026 for a vote on the proposed issuance to RSLGH of Common Stock underlying certain convertible promissory notes, warrants and pursuant to shared services agreements, in accordance with Nasdaq Listing Rule 5635. If approved, the proposal would permit the conversion of the Convertible Notes, and full exercise of pre-funded warrants, irrespective of any ownership limitations contained in those instruments, including the 49.99% beneficial ownership limitations, to the extent those limitations are removed from the Convertible Notes and the pre-funded warrants pursuant to a future amendment.
The Convertible Notes impose certain customary affirmative and negative covenants upon the Company, including covenants relating to ranking and reservation of shares. If an event of default under one or more of the Convertible Notes occurs and is not waived, the holder can elect to accelerate all or a portion of the then-outstanding principal amount of the applicable Note, plus accrued and unpaid interest, including default interest, which accrues at a rate per annum equal to 14% from the date of a default or event of default. The Company was in compliance with these covenants as of June 30, 2026.
The Company determined the Convertible Notes do not contain features that qualify as embedded derivatives in accordance with ASC 815. Borrowings under the Convertible Notes as of June 30, 2026 totaled $80.0 million recorded on the Company’s condensed consolidated balance sheet as Long-term debt, current, $72.0 million of which are considered related party with Green Thumb.
Related party interest expense incurred on the Convertible Notes was approximately $1.8 million and $548 thousand for the three months ended June 30, 2026 and 2025, respectively. Related party interest expense incurred on the Convertible Notes was approximately $3.6 million and $798 thousand for the six months ended June 30, 2026 and 2025, respectively.
Interest expense incurred on the Convertible Notes related to unaffiliated third parties amounted to approximately $202 thousand and $33 thousand for the three months ended June 30, 2026 and 2025, respectively. Interest expense incurred on the Convertible Notes related to unaffiliated third parties amounted to approximately $403 thousand and $33 thousand for the six months ended June 30, 2026 and 2025, respectively.
As of June 30, 2026, future minimum principal payments on all debt positions, excluding accrued interest amounts, were as follows:
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