BLOOMIA HOLDINGS, INC.

Current report

We are currently out of compliance with our debt covenants.

Current report

As described in Note 6 of the condensed consolidated financial statements, the temporary increase in the revolving facility capacity under the Credit Agreement from $6,000,000 to $10,000,000 expired on April 30, 2026, and the outstanding balance of the revolving facility (approximately $9,086,000 as of the date of this report) has been in excess of $6,000,000 since that date. As a result, from May 1, 2026 through the date of this report, the Company has been and remains out of compliance with the Credit Agreement as a result of being overdrawn on the revolving facility. In addition, the Company was in breach of its financial covenants as of December 31, 2025 and March 31, 2026. The Company received a waiver from the lender for both covenants for both periods. Based on the Company’s current financial projections, we believe the Company will be in compliance with all required covenants for at least the next twelve months. If Company performance does not meet current projections, there is a risk that the Company will not be in compliance with its debt covenants. If the Company is not in compliance with its debt agreement, the Lender has the right to declare the Company in technical default, and if the Company is unable to cure the technical default in a timely manner, the Lender could declare the entire balance of the term loan and the revolving credit facility immediately due and payable in full.

Current report

Risks related to our plan to use proceeds from the rights offering to settle debt at a discount.

Current report

The Company recently conducted a rights offering that commenced in February 2026 and expired on April 1, 2026. The Company received gross proceeds from the rights offering of $12,100,000, of which approximately $5,000,000 was cash and $7,100,000 was conversion of outstanding debt. As previously disclosed, in addition to debt conversion, the primary goal of the rights offering was to raise funds to settle the Seller Note for $7,330,000, which is a greater than 50% discount from its carrying value. The $4,800,000 in cash proceeds raised from the rights offering net of expenses was not enough to repay the $7,330,000 discounted payment under the Seller Note in full, and the Company may not be able to repay the balance of the $7,330,000 discounted payment under the Seller Note by the May 27, 2026 deadline to make such payment. If the Company does not repay the balance of the $7,330,000 discounted payment under the Seller Note by the May 27, 2026, a portion of the original principal balance of the Seller Note will be reinstated (see description in Part I, Item 2 of this Quarterly Report on Form 10-Q under the heading “Seller Note”), which would result in less of a decrease in the Company’s overall debt obligations.

Current report

The Rights Offering may limit our ability to use some or all of our net operating loss carryforwards in the future.

Current report

As a result of prior operating losses, we have net operating loss, or “NOL,” carryforwards for federal income tax purposes. Our ability to utilize our NOL carryforwards to reduce taxable income in future years could become subject to significant limitations under Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended (the “Code”), if we undergo an ownership change as determined under Section 382. We would undergo an ownership change under Section 382 if, among other things, the stockholders who own, directly or indirectly, 5% or more of our Common Stock, or are otherwise treated as “5% stockholders” under Section 382 and the regulations promulgated thereunder, increase their aggregate percentage ownership of our Common Stock by more than 50 percentage points over the lowest percentage of the stock owned by these stockholders at any time during the testing period, which is generally the three-year period preceding the potential ownership change.

Current report

In the event of an ownership change, Section 382 imposes an annual limitation on the amount of taxable income a corporation may offset with NOL carryforwards. The annual limitation is generally equal to the value of the stock of the corporation immediately before the Section 382 ownership change, multiplied by the long-term tax-exempt rate for the month in which the ownership change occurs (the long-term tax-exempt rate for 2026 is 3.51%). Any unused annual limitation may generally be carried over to later years until the NOL carryforwards expire. If we undergo an ownership change under Section 382 in connection with or after this Rights Offering, our ability to utilize NOLs and other tax attributes could be further limited by Section 382. Also, even if this Rights Offering does not cause an ownership change, it could increase the likelihood that we may undergo an ownership change for purposes of Section 382 in the future. Ownership changes that have occurred in the past or that may occur in the future could result in the imposition of an annual limit on the amount of pre-ownership change NOLs and other tax attributes we can use to reduce taxable income, potentially increasing and accelerating our liability for income taxes.

Current report

Certain significant stockholders may exert a degree of control in a manner that conflicts with the interests of other stockholders.

Current report

Current significant holders of the Company’s common stock may have interests that are different than or adverse to our other stockholders. Based on public filings with the Securities and Exchange Commission, as a result of shares of common stock issued to our largest stockholder and its affiliates through their participation in our recently completed rights offering, we believe that our largest stockholder and its affiliates hold approximately 60% of our issued and outstanding shares of common stock. Based on this share ownership and the simple majority vote of shares present in person or by proxy that is sufficient for the approval of most actions at any stockholders meeting, those stockholders are able to exercise control over certain matters requiring stockholder approval. Those matters include the election of directors, amendment of our certificate of incorporation, and approval of significant corporate transactions, subject to rules requiring the approval of a special majority among non-interested stockholders in certain situations. This control could have the effect of delaying or preventing a change of control of the Company or changes in management and will make the approval of certain transactions difficult without the support of those significant stockholders, including transactions in which a non-significant stockholder might otherwise receive a premium for its shares over the then-current market price.

Previous report

The government shut down may impact our ability to obtain seasonal workers.

Previous report

The Company has traditionally sourced seasonal labor for the peak growing season from January to May primarily through the H-2A agricultural guest worker program. Due to the federal government shut during the quarter ended December 31, 2025, the Department of Labor was not processing H-2A certificates, which a delay in obtaining work visas for temporary employees in time for the high season. Further delays could lead to a loss of H-2A workers which could lead to lower production if replacement workers are not found or higher labor costs if replacement labor requires a higher rate, both of which would reduce profitability.

Previous report

As described above and in our registration statement on Form S-1 filed with the Securities and Exchange Commission on January 23, 2026, the Company intends to offer non-transferable subscription rights to purchase up to $15,500,000 in shares of common stock which will result in the issuance of additional shares of our common stock. If stockholders choose not to fully exercise their rights prior to the expiration of the Rights Offering, their proportionate voting interest may be reduced and their relative ownership interest in the Company may be diluted.

Previous report

The sale of substantial amounts of our common stock could adversely affect the price of our common stock. Sales of substantial amounts of our common stock in the public market, and the availability of shares of our common stock for future sale, including shares of our common stock to be issued in this Rights Offering, could cause the market price of our common stock to remain low for a substantial amount of time. We cannot foresee the impact of such potential sales on the market, but it is possible that if a significant percentage of such available shares of common stock were attempted to be sold within a short period of time, the market for shares of our common stock would be adversely affected. Even if a substantial number of sales do not occur within a short period of time, the mere existence of this “market overhang” could have a negative impact on the market for our common stock and our ability to raise additional capital. Any disposition by related parties, or any other substantial stockholders, of our common stock in the public market, or the perception that such dispositions could occur, could adversely affect prevailing market prices of our common stock.

Previous report

The Company will have broad discretion in determining how the remaining net proceeds from the Rights Offering will be used. Our flexibility in the use of the remaining net proceeds may result in increased risks to the investors in our common stock, as our stockholders may not agree with the manner in which we choose to allocate and spend the net proceeds.

Previous report — wording carried elsewhere

Risks related to our contemplated Rights Offering.