BLOOMIA HOLDINGS, INC.

1. Description of Business and Basis of Presentation.

Description of Business.Bloomia Holdings, Inc.(“the Company”) is a specialty agricultural (“ag”) company focused on making and managing its ag investments in the United States (“U.S.”) and internationally. On February 22, 2024, the Company, through its majority-owned U.S. subsidiary Tulp 24.1, LLC (“Tulp 24.1”), acquired Bloomia B.V. and its subsidiaries (“Bloomia”). Subsequent to the purchase of Bloomia, the Company’s primary operations have been that of Bloomia. Bloomia is a significant producer of fresh cut tulips in the U.S. with a presence in the Netherlands and South Africa. As part of the consideration for the business combination, the Company issued units of Tulp 24.1 to the continuing CEO of Bloomia, which amounted to 18.6% and is presented as noncontrolling interest in these consolidated financial statements. The remaining 81.4% equity interest of Tulp 24.1 is owned by the Company and the Company is and maintains control of Tulp 24.1 as its sole managing member. The tulip sales business tends to be seasonal with first and second quarters of the calendar year being the strongest sales season.

Basis of Presentation. The accompanying consolidated financial statements of the Company include all wholly and majority owned subsidiaries of the Company. The operations of Bloomia are included since the date of acquisition. Entities for which the Company owns an interest, does not consolidate, but exercises significant influence, are accounted for under the equity method of accounting and are included in equity method investments within the consolidated balance sheets. All intercompany accounts and transactions have been eliminated. These consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

On August 3, 2023, the Company completed the sale of certain assets and certain liabilities relating to the Company’s legacy business of providing in-store advertising solutions (the “In-Store Marketing Business”). The operations of the In-Store Marketing Business are presented as discontinued operations in all periods.

As previously reported, the Company’s Board of Directors approved a change in the Company’s fiscal year end from December 31 to June 30 of each calendar year, effective June 30, 2025. The change aligns the fiscal years of the Company with the Bloomia business and reflects the seasonality of the Bloomia business. The twelve-month period ended June 30, 2026 is referred to as “Year Ended June 30, 2026,” the six-month transition period from January 1, 2025 to June 30, 2025 is referred to as “Six Months Ended June 30, 2025,” and the twelve-month period ended December 31, 2024 is referred to as “Year Ended December 31, 2024.”

Recently Issued Accounting Pronouncements.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03,Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures. The amendments in this update require disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the statement of operations; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The amendments in ASU 2024-03 are effective for annual periods beginning after December 15, 2026 and should be applied retrospectively. The Company is evaluating the impacts of the amendments on its consolidated financial statements and the accompanying notes to the financial statements.

Recently Adopted Accounting Pronouncements.

In July 2025, the FASB issued ASU 2025-05 that amends ASC 326, Financial Instruments – Credit Losses: Measurement of Credit Losses for Accounts Receivable and Contract Assets. The guidance provides a practical expedient that permits an entity to estimate expected credit losses on current accounts receivable and current contract assets arising from revenue transactions accounted for under ASC 606 by assuming current economic conditions as of the balance sheet date do not change over the remaining life of the asset. The amendments in ASU 2025-05 are effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted, and should be applied prospectively. The Company adopted ASU 2025-05 prospectively during the year ended June 30, 2026 and elected the practical expedient. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.

2. Significant Accounting Policies.

Use of Estimates. The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The key estimates made by management include the determination of fair values in conjunction with the acquisition of the Company’s majority interest in Bloomia, and the carrying value of inventories, operating right-of-use assets and lease liabilities, goodwill, useful lives for property and equipment and intangible assets, interest rates, and valuation of income taxes. Actual results could differ from these estimates.

Subsequent Events. In preparing the consolidated financial statements, management evaluated subsequent events for potential recognition and disclosure through the date of this filing. Other than those items disclosed within the consolidated financial statements and the accompanying notes to the consolidated financial statements, no material subsequent events were identified.

Foreign Currency Transactions. The revenues and expenses of the Company are mostly generated in U.S. dollars. In addition, the Company’s management has established that the U.S. dollar is the primary currency of the economic environment in which the Company operates. Thus, the reporting currency is the U.S. dollar, and the functional currency of the U.S. entities is the U.S. dollar. The Company’s subsidiary in the Netherlands, Bloomia BV, is responsible for purchasing tulip bulbs, which is the largest raw material the Company uses. Tulip bulbs are purchased in Euro and Bloomia BV pays administrative costs in in Euro, so the functional currency of Bloomia BV is the Euro.

Transactions and balances that are denominated in currencies that differ from the reporting currency have been remeasured into U.S. dollars in accordance with principles set forth in Accounting Standards Codification (“ASC”) 830,Foreign Currency Matters. At each balance sheet date, monetary items denominated in foreign currencies are translated at exchange rates in effect at the balance sheet date, while income and expenses are translated at average exchange rates for the periods presented. All exchange gains and losses from the remeasurement mentioned above are reflected in the consolidated balance sheet as accumulated other comprehensive income (loss) in stockholders’ equity.

Transaction gains and losses result from transactions that are denominated in a currency other than the functional currency of the Company, primarily related to the purchase of inventory in the U.S. from our Netherlands subsidiary, which is denominated in Euro. These foreign currency transaction gains and losses are reflected in foreign currency transaction loss (gain), net in the consolidated statements of operations.

Segment Information. The Company hasone segment that is reviewed by the Chief Operating Decision Maker (“CODM”) due to the Company having onlyone product, tulips, with over 95% of sales derived in the U.S. The CODM consists of the Company’s executive team, including the CEOs, CFO, and the CEO of Bloomia. Revenue, expenses, and operating loss (profit) are regularly reviewed by the CODM.

Cash and Cash Equivalents. All highly liquid debt instruments purchased with an original maturity of three months or less are considered to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in its deposit accounts.

Accounts Receivable, Net. Accounts receivable are presented in the balance sheets at their outstanding balances net of the allowance for credit losses. These receivables are generally trade receivables due in one year or less or expected to be billed and collected within one year. The Company estimates credit losses on accounts receivable in accordance with ASC 326Financial Instruments - Credit Losses. The Company measures the allowance for credit losses on trade receivables on a collective (pool) basis when similar risk characteristics exist. The estimate for allowance for credit losses is based on an expected loss rate for each pool. Management considers qualitative factors such as change in economic factors, regulatory matters, and industry trends to determine if an allowance should be further adjusted. The provision for credit losses is included in selling, general and administrative expenses on the consolidated statements of operations.

The following table summarizes changes in the provision for credit losses:

Inventories. Raw materials consist primarily of tulip bulbs, including freight and packaging supplies. Work-in-process consists of tulip stems and bulbs that have rooted. Inventories are stated at the lower of cost, as determined on the first-in, first-out method, or net realizable value. Finished goods and work-in-process include the inventory costs of raw materials, direct labor and normal manufacturing overhead. Abnormal amounts of spoilage are expensed as incurred and not included in overhead. The Company experienced unusual significant crop underperformance at the end of the Dutch bulb season. As a result, the Company estimated a $562,000 provision for inventory as of June 30, 2026 to ensure inventory is stated at its realizable value. There wasno provision for inventory as of June 30, 2025.

Prepaid expenses and other current assets. The Company records a prepaid expense when it has paid for a good or service that it has not yet incurred. As of June 30, 2026, the Company had paid $1,778,000 for bulbs to be received in fiscal year 2027 compared to $887,000 as of June 30, 2025. As of June 30, 2026, other current assets includes $1,549,000 of tariff refunds that were collected in July 2026. There wereno tariff refunds as of June 30, 2025.

Property and Equipment, Net. Property and equipment, net, are stated at historical cost, less accumulated depreciation and amortization. Bushes refer to peony plants, which accumulate planting and development costs that are capitalized into their basis until they become commercially productive, at which point the asset begins depreciating, and future maintenance costs are expensed as incurred. Planting costs consist primarily of the costs to purchase and plant nursery stock. Development costs consist of cultivation, pruning, irrigation, labor, spraying and fertilization, and interest costs during the development period. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term (including renewals that are reasonably certain to occur) or the estimated useful lives of the improvements. The estimated useful lives of property and equipment are as follows:

Long-Lived Assets Impairment Testing. Long-lived assets, which include property and equipment, definite-lived intangible assets subject to amortization, and right-of-use assets, are assessed for impairment whenever events or changes in circumstances such as asset utilization, physical change, legal factors or other matters indicate the carrying value of those assets may not be recoverable from future undiscounted cash flows. The impairment test involves comparing the carrying amount of each individual asset-group to the forecasted undiscounted future cash flows generated by that asset group. These assumptions require significant judgment, and actual results may differ from assumed and estimated amounts. In the event the carrying amount of the asset exceeds the gross undiscounted future cash flows generated by that asset and the carrying amount is not considered recoverable, an impairment exists. An impairment loss is measured as the excess of an individual asset group’s carrying amount over its fair value and is recognized in the statement of operations in the period that the impairment occurs. The reasonableness of the useful lives of the asset and other long-lived assets is regularly evaluated. During the year ended June 30, 2026, six months ended June 30, 2025 and year ended December 31, 2024, no impairment losses were identified.

Goodwill and Indefinite-lived Assets*.*Goodwill results from business combinations and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Annually, or if conditions indicate an additional review is necessary, the Company assesses qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and if it is necessary to perform the quantitative goodwill impairment test. The Company’s annual testing date is April 30. The Company hasone reporting unit.

The Company performed its annual impairment test as of April 30, 2026. Cash flows from Bloomia have been lower than the original deal model due primarily to higher bulb costs, so the Company performed its test on a quantitative basis. The fair value of the reporting unit was estimated by a third-party valuation specialist using an income approach based on discounted cash flows. Based on the assessment, the Company determined that the carrying value of the reporting unit exceeded its estimated fair value. Accordingly, the Company recognized a non-cash goodwill impairment charge of $11,122,000 during the fourth quarter of the fiscal year-ended June 30, 2026, representing a full write-down of the goodwill. The charge is recorded on Goodwill impairment loss in the consolidated statements of operations. The goodwill balance waszero and $11,128,000 as of June 30, 2026 and 2025, respectively.

Further, the Company recognized a trade name associated with the Bloomia acquisition that was determined to be an indefinite-lived intangible asset. Annually, or if conditions indicate an additional review is necessary, the Company tests indefinite-lived trade names for impairment. The Company has the option to first assess qualitative factors to determine whether the fair value of a trade name is “more likely than not” less than its carrying value. If it is more likely than not that an impairment has occurred, the Company then performs the quantitative impairment test. If the Company performs the quantitative test, the carrying value of the asset is compared to an estimate of its fair value to identify impairment. The fair value is determined by the relief from royalty method, which requires significant judgment. Actual results may differ from assumed and estimated amounts utilized in the analysis. If the Company concludes an impairment exists, the asset’s carrying value will be written down to its fair value. The Company performed an annual impairment test of the Bloomia trade name on a quantitative basis as of April 30, 2026. The fair value was estimated by a third-party valuation specialist using the relief from royalty method. Based on the assessment, the Company determined that the carrying value of the trade name exceeded its estimated fair value. Accordingly, the Company recognized a non-cash intangible asset impairment charge of $2,043,000 in the consolidated statements of operations during the fourth quarter of the fiscal year-ended June 30, 2026. During the six months ended June 30, 2025 and year ended December 31, 2024, no impairment losses were identified.

Other Assets. The Company transferred ex-force bulbs to a supplier in the six months ended June 30, 2025 and in the year ended June 30, 2026 in exchange for bulbs and planting stock to be received in fiscal years 2027 and 2028, respectively. The ex-force bulbs are bulbs that were used to grow stems. By transferring the ex-force bulbs to the supplier, the Company was able to reduce cost of goods sold in the year ended June 30, 2026 and six months ended June 30, 2025 by $-0- and $814,000, respectively. As of June 30, 2026, $257,000 of ex-force bulbs are included in other assets and $679,000 are included in prepaid expenses and other current assets, respectively, on the consolidated balance sheets.

Leases. The Company is party to leasing contracts in which the Company is the lessee. The Company applies ASC 842 to determine whether a contract is, or contains, a lease at inception. The Company's lease contracts include land, buildings, and equipment. These lease contracts are classified as either operating or finance leases. Right of use (“ROU”) assets and lease liabilities are recognized in the consolidated balance sheets based on the present value of lease payments over the lease term, at the later of the commencement date or business combination date. The Company's leases generally do not include an implicit rate of return. The Company determines the present value of future minimum lease payments based on the collateralized borrowing rate of the Company, on a portfolio basis. The related operating lease expense is recognized on a straight-line basis over the lease term in the consolidated statements of operations. Finance lease ROU assets are amortized to amortization expense, and interest expense is recorded in connection with the finance lease liability in the consolidated statements of operations. For lease agreements that contain both lease and non-lease components, the Company accounts for each as a single lease component. The Company has elected not to apply the requirements of ASC 842 for short-term leases. Short-term leases are defined as leases that, at the commencement date, have lease terms of twelve months or less.

Equity-Method Investments. Investments are accounted for using the equity method of accounting if the investment gives the Company the ability to exercise significant influence, but not control, over the investee. Under the equity method of accounting, the Company records its investments in equity-method investees in the consolidated balance sheets as equity-method investments and its share of investees’ earnings or losses together with other-than-temporary impairments in value, basis differences between the carrying amount and the Company’s ownership interest in the underlying net assets of the investee, and any gain or loss from the sale of an equity method investment as gain or loss on sale of equity investment in net income of unconsolidated investments in the consolidated statements of operations. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an equity-method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.

Investments in equity-method investments and joint ventures of immaterial entities are estimated based upon the overall performance of the entity where financial results are not available on a timely basis.

Fair Value. FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (ASC 820) establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

The carrying amounts of certain financial instruments, which include cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other financial working capital items approximate their fair values at June 30, 2026 and 2025 due to their short-term nature and management’s belief that their carrying amounts approximate the amount for which the assets could be sold, or the liabilities could be settled. The carrying amount of debt approximates fair value due to the debt’s variable market interest rate.

Revenue Recognition. The Company accounts for revenue in accordance with FASB Topic 606, “Revenue from Contracts with Customers,” (ASC 606), using the following steps:

The Company recognizes revenue when obligations under the terms of a contract with its customer are satisfied; this occurs with the transfer of control of its tulips. Revenue is measured as the amount of consideration expected to be received in exchange for transferring products. Revenue from product sales is governed primarily by customer pricing and related purchase orders (“contracts”) which specify shipping terms and the transaction price. Contracts are at standalone pricing. The performance obligation in these contracts is determined by each of the individual purchase orders and the respective stated quantities, with revenue being recognized at a point in time when obligations under the terms of the agreement are satisfied. This generally occurs with the transfer of control of tulips to the customer when the product is delivered and accepted. Customers are invoiced once the tulips are delivered, with payment generally due within 30 days of the invoice.

The Company expenses the incremental costs of obtaining a contract, as the amortization period is one year or less. These costs are included in sales, general and administrative expenses in the consolidated statements of operations.

The following table presents revenue disaggregated by customer, as determined by the operational nature of their industry:

During the year ended June 30, 2026, the Company hadfour customers that accounted for 10% or more of the total revenues. These four customers accounted for approximately 20%,18%,11%, and 10% of revenues, respectively, for the year ended June 30, 2026. As of June 30, 2026, three of these customers also accounted for approximately 26%,16%, and 10% of accounts receivable, net, respectively, as of June 30, 2026. During the six months ended June 30, 2025, the Company hadfour customers that accounted for 10% or more of the total revenues. These four customers accounted for approximately 17%,16%,12%, and 11% of revenues, respectively, for the six months ended June 30, 2025. As of June 30, 2025, two of these customers also accounted for approximately 26% and 10% of accounts receivable, net, respectively, whileone different customer accounted for approximately 15% of accounts receivable, net, as of June 30, 2025. For the year ended December 31, 2024, the Company hadthree customers that accounted for 10% or more of revenues. These three customers accounted for approximately 34%,20%, and 11% of revenues, respectively, for the year ended December 31, 2024. The loss of a major customer could adversely affect the Company’s operating results and financial condition.

Cost of Sales. Cost of sales consists primarily of costs to procure, sort, pick, cool, and transport bulbs. Additionally, cost of sales includes labor and facility costs related to production operations.

Shipping and Handling. The Company’s shipping and handling costs include costs incurred with third-party carriers to transport products to customers. The costs of outbound freight are included in the cost of goods sold in the consolidated statements of operations. For the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, the costs of out-bound freight were approximately $2,983,000, $1,913,000, and $2,534,000, respectively.

Advertising Costs. The Company expenses advertising costs as incurred. These costs are included within sales, general and administrative expenses in the consolidated statement of operations. Total advertising expense was approximately $50,000, $36,000, and $43,000 for the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, respectively.

Foreign Currency Contracts. The Company enters into foreign currency forward contracts to manage exposure to changes in the Euro exchange rate on forecasted transactions denominated in Euro. The contracts are not designated as hedging instruments under ASC 815 Derivatives and Hedging, and the changes in fair value are recognized in earnings.

Interest expense. For debt with variable rate interest, interest expense is recorded based on a weighted average effective interest rate method. The significant assumptions used in the weighted average estimate are the future debt balance and the length of time the debt will be outstanding. Paid in kind (PIK) interest is not paid in cash and is included in the long-term debt, net, in the consolidated balance sheets. As of June 30, 2026 and 2025, $13,000 and $300,000 was short-term and included in accrued expenses on the consolidated balance sheets, respectively. Financing costs incurred as part of the acquisition of Bloomia are amortized and expensed in interest expense in the consolidated statements of operations.

Income Taxes**.**The Company uses the liability method to account for income taxes as prescribed by ASC 740. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. Deferred tax expense (benefit) is the result of changes in deferred tax assets and liabilities. Deferred income tax assets and liabilities are adjusted to recognize the effects of changes in tax laws or enacted tax rates in the period during which they are signed into law. In determining the Company’s ability to realize its deferred tax assets, the Company considers any available tax planning strategies that could be implemented. Under ASC 740, a valuation allowance is required when it is more likely than not that all or some portion of the deferred tax assets will not be realized due to the inability to generate sufficient future taxable income of the correct character. Failure to achieve previously forecasted taxable income could affect the ultimate realization of deferred tax assets and could negatively impact the Company’s effective tax rate on future earnings.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

Interest income or expense/penalties attributable to the overpayment or underpayment, respectively, of income taxes is recognized as an element of the Company’s provision for income taxes.

As a multinational corporation, the Company is subject to taxation in many jurisdictions, and the calculation of its tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in various taxing jurisdictions. If the Company ultimately determines that the payment of these liabilities will be unnecessary, the liability will be reversed, and the Company will recognize a tax benefit during the period in which it is determined the liability no longer applies. Conversely, the Company records additional tax charges in a period in which it is determined that a recorded tax liability is less than the ultimate assessment is expected to be.

The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from management’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities.

Stock-Based Compensation**.**The Company measures and recognizes compensation expense for all stock-based awards at fair value at grant date. Restricted stock units and awards are valued at the closing market price of the Company’s stock on the date of the grant. The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options. The determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as by assumptions regarding several complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors.

During the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, the Company issued zero, zero, and 27,000 shares of restricted stock under its 2018 equity incentive plan, respectively. For the year ended December 31, 2024, the shares underlying the awards were assigned a grant date fair value of $5.64 per share, based on the stock price on the date of grant, and are scheduled to vest over three years. The Company recorded total stock-based compensation expense of $39,000, $39,000, and $60,000 for the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, respectively.

Net (Loss) Income per Share. Basic net (loss) income per share is computed by dividing net (loss) income by the weighted average shares outstanding and excludes any dilutive effects of stock options and restricted stock units and awards. Diluted net (loss) income per share gives effect to all dilutive potential common shares outstanding during the year.

In determining diluted net (loss) income per share, the Company considers whether the result of the incremental shares would be antidilutive. During the year ended June 30, 2026, the Company had a net loss from continuing operations. Accordingly, the result of potentially dilutive securities was determined to be anti-dilutive. Incremental shares that could have a dilutive effect in future periods but were excluded from the calculation of diluted weighted average shares outstanding because their effect would have been anti-dilutive during the period ended June 30, 2026 totaled 56,000 shares. During the six months ended June 30, 2025, there were 1,000 incremental shares that were excluded from the computation of diluted weighted average shares outstanding because their inclusion would have been anti-dilutive. In the year ended December 31, 2024, the Company had a net loss from continuing operations. Accordingly, the result of potentially dilutive securities was determined to be anti-dilutive.

Weighted average common shares outstanding were as follows:

3. Change in Fiscal Year-End.

As previously reported, the Company historically reported on a calendar year basis ending on December 31. The Company’s Board of Directors approved a change in the Company’s year-end from December 31 to June 30 of each year, effective June 30, 2025. The twelve-month period ended June 30, 2026 is referred to as “Year Ended June 30, 2026,” the six-month transition period from January 1, 2025 to June 30, 2025 is referred to as “Six Months Ended June 30, 2025,” and the twelve-month period ended December 31, 2024 is referred to as “Year Ended December 31, 2024.”

4. Bloomia Acquisition.

On February 22, 2024, the Company completed the acquisition of a majority interest in Fresh Tulips USA LLC and Bloomia B.V. and its subsidiaries (the “Acquisition”). The Acquisition was completed by the Company through its wholly owned subsidiaries, Tulp 24.1 and Tulipa Acquisitie Holding B.V. (“Tulipa”), pursuant to an Agreement for the Sale and Purchase of Shares by and among Tulp 24.1, Tulipa, Botman Bloembollen B.V. (“Botman”) , W.F. Jansen (“Jansen”), and H.J. Strengers (“Strengers”), and the Company, as the guarantor. Jansen has continued to serve as chief executive officer of Bloomia following the Acquisition. As a result of the Acquisition, Tulp 24.1 became the holder of 100% of the ownership interests of Bloomia.

The Acquisition has been accounted for in accordance with ASC Topic 805, “Business Combinations,” using the acquisition method of accounting. Under the acquisition method of accounting, the total purchase price was allocated to the net identifiable tangible and intangible assets of Bloomia acquired, based on their fair values at the date of the acquisition.

The Acquisition was funded through a combination of debt and cash on hand. The total consideration transferred for the Acquisition was $53,360,000. Consideration comprised of $34,919,000 of cash paid, $15,451,000 of seller bridge loans in lieu of cash, and $2,990,000 of equity issued of Tulp 24.1, which is reflected as noncontrolling interest within these consolidated financial statements. Following the noncontrolling equity issued, the Company owns 81.4% of Tulp 24.1 and the CEO of Bloomia owns the remaining 18.6%.

Revenue, net, and net (loss) income before taxes for Bloomia since the date of Acquisition included in the consolidated statements of operations were $48,130,000 of revenue and $11,606,000 of net loss for year ended June 30, 2026, $35,622,000 of revenue and $2,425,000 of net income for the six months ended June 30, 2025, and $37,773,000 of revenue and $5,022,000 of loss for the year ended December 31, 2024.

Unaudited pro forma information has been prepared as if the Acquisition had taken place on January 1, 2024. The unaudited pro forma information is not necessarily indicative of the results that the Company would have achieved had the transaction actually taken place on January 1, 2024, and the unaudited pro forma information does not purport to be indicative of future financial operating results. The unaudited pro forma consolidated financial information does not reflect any operating efficiencies and cost savings that may be realized from the integration of the Acquisition. Unaudited pro forma information for the year ended December 31, 2024, excluding the impact of debt and intangible asset amortization, is as follows:

The Company incurred approximately $-0-, $24,000, and $1,542,000 of Acquisition-related costs that were expensed during the year ended June 30, 2026, the six months ended June 30, 2025, and the year ended December 31, 2024, respectively. These costs are included in sales, general and administrative expenses in the consolidated statements of operations.

5. Sale of In-Store Marketing Business and Presentation as Discontinued Operations.

On August 3, 2023, the Company completed the sale of certain assets and certain liabilities relating to the Company’s In-Store Marketing Business for a price of $3,500,000 to TIMIBO LLC, an affiliate of Park Printing, Inc. (the “Buyer”) under an Asset Purchase Agreement (the “Purchase Agreement”). The Company retained accounts receivable, as well as cash, cash equivalents and marketable securities. The cash consideration for the sale was subject to a post-closing adjustment. The final purchase adjustment for the net balance was to reduce the cash consideration by $1,500,000, with the Company retaining an equal amount of cash that had been received for unexecuted programs. Under the Purchase Agreement, $200,000 was escrowed for atwelve-month period for any future claims, as defined in the Purchase Agreement, by the Buyer against the Company. The full escrowed amount was received by the Company in the year ended December 31, 2024. The results of the In- Store Marketing Business have been presented as discontinued operations for all periods presented. The benefit recorded in sales, general and administrative expense of discontinued operations of $33,000 for the six months ended June 30, 2025 and $224,000 for the year ended December 31, 2024 is due to the reduction in the accrual for sales tax due to the expiration of the statute of limitations.

6. Inventories.

Inventories consisted of the following at:

7. Property and Equipment.

Property and equipment, net, consisted of the following at:

At June 30, 2026, property and equipment, net, of $956,000 and $433,000 were located in the Netherlands and South Africa, respectively. Included in machinery and equipment at June 30, 2026 and June 30, 2025 was $338,000 and $318,000, respectively, of spare parts that are not currently in use and not being depreciated.

The components of depreciation expense are as follows within the consolidated statements of operations:

8. Equity Method Investment.

Araucanía Flowers SA (“Araucania”) is based in Chile and serves as a marketing arm for Tulp 24.1 to export its crops to Latin-American countries. Araucanía hastwo other shareholders that hold 70% of its aggregate issued and outstanding shares. At June 30, 2026 and June 30, 2025, Tulp 24.1 had a 30% equity interest in Araucania with a carrying amount of approximately $192,000 and $216,000, respectively. During the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, the equity in net (loss) income of Araucania was approximately $(17,000), $0, and $37,000, respectively. As of June 30, 2026 and June 30, 2025, Tulp 24.1 had a note receivable from Araucanía with a balance of $240,000 and $360,000, respectively. As of June 30, 2026 and June 30, 2025, the current portion of the note receivable of $120,000 is included in prepaid expenses and other current assets, and the remainder is included in long-term receivable in the accompanying consolidated balance sheets.

9. Goodwill and Other Intangible Assets.

The following table summarizes the changes in goodwill:

The Company performed its annual impairment test on a quantitative basis as of April 30, 2026. The fair value of the reporting unit was estimated by a third-party valuation specialist using an income approach based on discounted cash flows. Based on the assessment, the Company determined that the carrying value of the reporting unit exceeded its estimated fair value. Accordingly, the Company recognized a non-cash goodwill impairment charge of $11,122,000 during the fourth quarter of the fiscal year-ended June 30, 2026, representing a full write-down of the goodwill. The charge is recorded in goodwill impairment in the consolidated statements of operations.

Other intangible assets and related amortization and impairment are as follows:

During the year ended June 30, 2026, the Company performed an impairment assessment of its indefinite-lived intangible assets. The fair value of the intangibles were estimated by a third-party valuation specialist using the relief from royalty method. Based on the assessment, the Company determined that the carrying value of the Bloomia trade name exceeded its estimated fair value. Accordingly, the Company recognized a non-cash intangibles impairment charge of $2,043,000 during the fourth quarter of the fiscal year ended June 30, 2026. The charge is recorded in intangible asset impairment in the consolidated statements of operations.

For the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, amortization of intangible assets expensed to operations was $1,525,000, $762,000, and $1,302,000, respectively. The weighted average remaining amortization period for intangible assets as of June 30, 2026 and June 30, 2025 was approximately 9.6 years and 10.6 years, respectively.

Remaining estimated aggregate annual amortization expense is as follows for the fiscal years ended June 30:

10. Long-term debt, net.

The components of debt consisted of the following at:

Credit Facility

To finance the Bloomia acquisition, the Company, as parent guarantor, Tulp 24.1 as the borrower (the “Borrower”) and each of Tulipa, Bloomia B.V., and Fresh Tulips USA, LLC, as guarantors (collectively, the “Company Credit Parties”), entered into a Credit Agreement (the “Credit Agreement” and, as subsequently amended, the “Amended Credit Agreement”) with Associated Bank, N.A. (“Lender”) for a $18,000,000 term loan and a $6,000,000 revolving credit facility. On October 15, 2024, the Company Credit Parties entered into a First Amendment to Credit Agreement which, among other things, temporarily increased the borrowing capacity under the revolving credit facility to $8,000,000 until March 31, 2025. On September 15, 2025, the Company Credit Parties entered into a Second Amendment to Credit Agreement, pursuant to which, among other things, the borrowing capacity under the revolving credit facility was temporarily increased from $6,000,000 to $10,000,000 and the definition of eligible inventory continued to include inventory in the Netherlands, in each case until April 30, 2026. The revolving credit facility may be used by Tulp 24.1 for general business purposes and working capital, subject to availability under a borrowing base consisting of 80% of eligible accounts receivable and generally 50% of eligible inventory. Borrowings under the Amended Credit Agreement bear interest at a rate per annum equal to Term Secured Overnight Financing Rate (“SOFR”) for an interest period selected by the Company plus an applicable margin based on Tulp 24.1’s senior cash flow leverage ratio. In addition to paying interest on the outstanding principal under the Amended Credit Agreement, Tulp 24.1 is required to pay a commitment fee of 0.50% on the unutilized commitments under the revolving credit facility.

Pursuant to a Waiver and Third Amendment to Credit Agreement (the “Third Amendment”) entered into by the Company Credit Parties on September 16, 2026, the additional interest rate margin under the Amended Credit Agreement was increased from a range of 3.00% to 4.00% to a range of 3.00% to 5.00%, with Tulp 24.1’s senior cash flow leverage ratio for purposes of determining the additional interest rate margin now calculated based on Unadjusted EBITDA in lieu of EBITDA (with “Unadjusted EBITDA” for this purpose defined as the consolidated net income of the Tulp 24.1 and its subsidiaries before deductions for income taxes paid in cash, interest expense, depreciation and amortization, in all cases calculated without duplication and in accordance with GAAP). The Third Amendment also, among other things, (a) as described in greater detail below, adjusts the minimum fixed charge coverage ratio and maximum senior cash flow leverage ratio to levels the Company’s believes it can comply with for at least the next twelve months, (b) so long as no event of default has occurred and is continuing under the Amended Credit Agreement, temporarily increases the borrowing capacity under the revolving credit facility from $6,000,000 to $10,000,000 through May 31, 2027 (at which date, absent further amendment to the Amended Credit Agreement, the borrowing capacity under the revolving credit facility reverts back to $6,000,000), (c) temporarily amends the definition of eligible inventory to continue to include inventory in the Netherlands for the period from August 31, 2026 to May 31, 2027 (at which date, absent further amendment to the Amended Credit Agreement, inventory in the Netherlands will be excluded from the definition of eligible inventory), and (d) provides that, (i) if as of January 31, 2027, neither a Debt Refinance nor an Alternative Capital Raise has been consummated, a fee in the amount of $100,000 per month (the “Refinance Fee”) shall accrue for the account of the Lender, commencing on February 1, 2027 and continuing on the first day of each month thereafter, (ii) if a Debt Refinance has been consummated

on or before May 31, 2027, all Refinance Fees accrued through such date shall be waived and shall not be payable, and (iii) if a Debt Refinance has not been consummated on or before May 31, 2027, then (x) if the total outstanding principal balance under the revolving credit facility as of May 31, 2027 exceed $3,000,000, the aggregate Refinance Fees accrued through May 31, 2027, in the amount of $400,000, shall be due and payable in cash to the Lender on June 1, 2027, and (y) if the total outstanding principal balance under the revolving credit facility as of May 31, 2027 is equal to or less than $3,000,000, then fifty percent (50%) of the aggregate Refinance Fee accrued through May 31, 2027, in the amount of $200,000, shall be due and payable in cash to the Lender on June 1, 2027. For as long as the Debt Refinance remains unconsummated, an additional Refinance Fee in the amount of $100,000 shall be due and payable in cash to the Lender on July 1, 2027 and on the first day of each month thereafter until the Debt Refinance is consummated. For purposes of the foregoing, (a) ”Debt Refinance” means a refinancing of all outstanding obligations under the Amended Credit Agreement in cash in full, and (b) ”Alternative Capital Raise” means a capital raise from a mezzanine lender, group of mezzanine lenders, or other investors for gross proceeds of not less than $4,000,000. The Third Amendment further provides that all proceeds of any Alternative Capital Raise shall be applied solely in a manner approved by the Lender in its sole discretion.

The obligations under the Amended Credit Agreement are secured by substantially all of the personal property of Tulp 24.1 and its subsidiaries. The Company has also provided an unsecured guaranty of the obligations of Tulp 24.1 under the Amended Credit Agreement. Pursuant to the Third Amendment, the Amended Credit Agreement requires Tulp 24.1 and its subsidiaries to maintain (a) a minimum fixed charge coverage ratio of not less than (i)1.00 to 1.00 as of the last day of the fiscal quarters ending September 30, 2026, December 31, 2026, and March 31, 2027, (ii)1.10 to 1.00 as of the last day of the fiscal quarter ending June 30, 2027, and (iii)1.25 to 1.00 as of the last day of the fiscal quarter ending September 30, 2027 and the last day of each fiscal quarter thereafter through the maturity date of the Amended Credit Agreement, and (b) a maximum senior cash flow leverage ratio of not greater than (i)6.25 to 1.00 as of the last day of the fiscal quarter ending September 30, 2026, (ii)6.75 to 1.00 as of the last day of the fiscal quarter ending December 31, 2026, (iii)6.25 to 1.00 as of the last day of the fiscal quarter ending March 31, 2027, (iv)3.50 to 1.00 as of the last day of the fiscal quarter ending June 30, 2027, and (v)3.00 to 1.00 as of the last day of the fiscal quarter ending September 30, 2027 and the last day of each fiscal quarter thereafter through the maturity date of the Amended Credit Agreement. The Company was not in compliance with its financial covenants under the Amended Credit Agreement on December 31, 2025, March 31, 2026, and June 30, 2026, but received waivers from the Lender for each of those covenant breaches (including pursuant to waivers granted in the Third Agreement). The Amended Credit Agreement contains other customary affirmative and negative covenants, including covenants that restrict the ability of Tulp 24.1 and its subsidiaries to incur additional indebtedness, dispose of significant assets, make distributions or pay dividends, make certain investments, including any acquisitions other than permitted acquisitions, make certain payments, enter into sale and leaseback transactions or grant liens on its assets, subject to certain limitations. The Amended Credit Agreement also contains customary events of default, the occurrence of which would permit the Lender to terminate its commitments and accelerate loans under the Amended Credit Agreement, including failure to make payments under the credit facility, failure to comply with covenants in the Amended Credit Agreement and other loan documents, cross default to other material indebtedness of Tulp 24.1 or any of its subsidiaries, failure of the Tulp 24.1 or any of its subsidiaries to pay or discharge material judgments, bankruptcy of Tulp 24.1 or any of its subsidiaries, and a change of control of Tulp 24.1. The term loan under the Amended Credit Agreement is scheduled to be repaid in quarterly installments of $450,000, that commenced on June 30, 2024, with a scheduled maturity date of February 20, 2029. The term loan is subject to additional principal payments under the annual 50% of excess cash flow provision (waived if total net cash flow leverage is less than 2.0 x as of fiscal year-end). The scheduled maturity date of the revolving credit facility is February 20, 2029.

As of June 30, 2026 and June 30, 2025, there was $385,000 of debt issuance costs related to the term loan under the Amended Credit Agreement, net of amortization of $191,000 and $113,000, respectively, which has been presented as a direct deduction from long-term debt in the consolidated balance sheets. As of June 30, 2026 and June 30, 2025, there was $128,000 of deferred financing costs related to the revolving credit facility under the Amended Credit Agreement, net of amortization of $60,000 and $35,000, respectively, which has been presented within prepaid expenses and other current assets in the consolidated balance sheets.

The Company incurred $1,703,000, $819,000, and $1,605,000 of interest expense on the term loans and revolving facility under the Amended Credit Agreement in the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, respectively. The Company incurred non-cash paid-in-kind interest of $1,230,000, $818,000, and $1,331,000 on the Seller Notes (described below) in the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, respectively. Term loan, revolving credit facility and paid-in-kind interest are included in interest expense, net, on the consolidated statements of operations.

The Company has experienced operating challenges that have adversely affected financial results, liquidity, and compliance with certain financial covenants under its Amended Credit Agreement. As discussed above, the Company was not in compliance with certain financial covenants during fiscal year 2026, and subsequently obtained covenant waivers and entered into amendments to its credit facilities that provide additional financial flexibility and support the Company's ongoing liquidity requirements. The Company remains subject to financial and other covenants under its debt agreements, and future compliance is dependent, in part, upon achieving projected operating results and cash flows.

Management has evaluated the Company's liquidity position, including expected future cash flows from operations, available borrowing capacity under the Amended Credit Agreement, and the impact of the covenant relief and debt amendments described above. Based on these projections, management believes the Company will have sufficient liquidity to meet its obligations as they become due for at least the twelve-month period following the issuance of these financial statements. However, if actual operating results are less favorable than currently projected, the Company may be required to pursue additional financing arrangements, obtain further amendments or waivers under its debt agreements, or implement additional liquidity-preserving measures.

Seller Note

On February 26, 2024, in connection with the Company’s acquisition of Bloomia through its majority owned subsidiary Tulp 24.1 and Tulipa (the “Seller Note Borrowers”) as part of the closing consideration, entered into that certain Bridge Loan Agreement dated February 22, 2024, with Botman, Jansen, and Strengers (collectively, the “Seller Note Lenders”), pursuant to which the Seller Note Lenders made loans to the Seller Note Borrowers in the original aggregate principal amount of $12,750,275 (the “Seller Note”). The Company has provided an unsecured guaranty of the obligations of the Seller Note Borrowers under the Seller Note. The Seller Note bore interest at 8% per annum for the first year and thereafter increases annually by 2 percentage points upon each of the four anniversaries thereafter through its maturity on March 24, 2029.

On January 19, 2026, the Seller Note Borrowers entered into a First Amendment to the Bridge Loan Agreement (“Seller Note Amendment”) pursuant to which, among other things, the Seller Note Borrowers had the right to prepay the Seller Note in full at a discount in the aggregate amount of $7,330,000 (the “Discounted Prepayment Amount”) at any time prior to April 15, 2026 (the “Discounted Prepayment”) without any interest, indemnity, penalty, or premium due in respect of such Discount Prepayment, provided that as a condition to and effective upon the Seller Note Borrowers making the Discounted Prepayment, the Seller Note Borrowers release the Seller Note Lenders from any and all (potential or actual) liability in respect of (a) the Warranties (as defined in the Share Purchase Agreement dated February 21, 2024 between the Seller Note Borrowers (as Purchaser and US Purchaser), and the Seller Note Lenders (as the Sellers) (the “SPA”) as well as (b) the Indemnities specified in Clause 11.1 of the SPA.

On April 15, 2026, the Seller Note Borrowers made an initial payment to the Seller Note Lenders of $4,864,000 and entered into a Second Amendment to Bridge Loan Agreement (“Seller Note Second Amendment”) pursuant to which, among things, the Discounted Prepayment terms were modified as follows:

(a)In order to be eligible for the Discounted Prepayment, the Seller Note Borrowers were required to make an initial payment of at least $4,800,000 towards the Discounted Prepayment Amount by April 15, 2026 (the amount of such payment, the “Initial Discounted Prepayment Amount”).

(b)Any portion of the Discounted Prepayment Amount not paid by April 15, 2026 (such amount, the “Discounted Prepayment Balance”) accrued interest at the rate of 12% per annum (the “Interim Interest”) commencing April 16, 2026.

(c)The Seller Note Borrowers had until May 27, 2026 to pay the Discounted Prepayment Balance and all accrued and unpaid Interim Interest in full. Any portion of the Discounted Prepayment Balance, not paid by May 27, 2026 being referred to as the “Unpaid Discounted Prepayment Balance”).

(d)The total remaining outstanding balance of the Seller Note shall be revised to equal an amount (the “Reduced Balance”) calculated as (x) $15,097,053 (being the full balance of the Seller Note as of April 15, 2026), multiplied by (y) Unpaid Discounted Prepayment Balance Ratio, where “Unpaid Discounted Prepayment Balance Ratio” means an amount equal to the quotient of (i) the Unpaid Discounted Prepayment Balance divided by (ii) the Discounted Prepayment Amount. The Seller Note Borrowers paid an additional $982,000 toward the Discounted Payment Balance before May 27, 2026.

(e)Based on payments made and shares of the Company’s common stock granted to Jansen in lieu of cash, the Seller Note balance as of June 30, 2026 was $2,670,000 with PIK interest accruing in accordance with Section 6 of the Seller Note.

(f)The Company signed a third amendment that extended the payment deadline to July 15, 2026 for a $100,000 fee. No additional payments were made. The total gain on the cancellation of the debt was $7,005,000 and is recorded in gain on settlement of debt in the consolidated statements of operations.

The combined aggregate maturities for the fiscal years following June 30, 2026 are as follows:

11. Stockholders’ Equity.

Issuance of common stock. The Company conducted a rights offering that commenced in February 2026 and expired on April 1, 2026. Pursuant to the rights offering, the Company distributed non-transferable subscription rights to stockholders of record as of February 16, 2026. Each eligible stockholder was entitled to subscribe for additional shares of the Company’s common stock in proportion to their existing ownership, with the opportunity to participate in an over-subscription privilege, subject to availability and proration. 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 related party debt. The rights offering resulted in an aggregate of approximately 3,000,000 shares of the Company’s common stock being issued to participants in the rights offering at a price of $4.05 per share.

The Company also granted Jansen 58,408 shares of common stock on June 29, 2026, that vested upon grant. The stock was agreed to have a value of $237,000. Additionally, the Company issued stock of $10,000 through its Employee Stock Purchase Plan.

Minority owner debt conversion. In exchange for a full release of obligations that the Seller Note Borrowers had to Jansen under the Seller Note (as amended), on June 29, 2026, Tulp 24.1 recognized an in-kind capital contribution of $193,000.

Stock-Based Compensation. The Company’s stock-based compensation plans are administered by the Compensation Committee of the Board of Directors, which, subject to approval by the Board of Directors, selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures and other provisions of the award.

Stock-based compensation expense that was recognized in the continuing operations of the Company’s consolidated statements of operations for the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024 was $39,000, $39,000, and $60,000, respectively.

The Company uses the Black-Scholes option pricing model to estimate fair value of stock-based awards. There wereno awards issued during the year ending June 30, 2026, six months ended June 30, 2025, and year ending December 31, 2024 that utilized the Black-Scholes option pricing model.

The Company uses the graded attribution method to recognize expense for unvested stock-based awards. Forfeitures are recognized as incurred.

Stock Options, Restricted Stock, Restricted Stock Units, and Other Stock-Based Compensation Awards. The Company maintains a stock and incentive plan (the “Plan”).

Under the terms of the Plan, the Company may grant awards in a variety of instruments including stock options, restricted stock and restricted stock units to employees, consultants and directors generally at an exercise price at or above 100% of fair market value at the close of business on the date of grant. Stock options expire 10 years after the date of grant and generally vest over three years. The Company issues new shares of common stock upon grant of restricted stock, when stock options are exercised, and when restricted stock units are vested and/or settled.

The following table summarizes activity under the Plan:

All stock options previously outstanding under the Plan expired in May 2024. There wereno options outstanding as of June 30, 2026 and June 30, 2025. During the year ended June 30, 2026 and the six months ended June 30, 2025, the Company did not issue any stock options.

In May 2024, the Company issued a restricted stock grant totaling 27,000 shares of common stock to an employee. The shares underlying the awards were assigned a value of $5.64 per share, which was the closing price of the Company’s common stock on the date of grant, for a total grant date value of $152,000. The shares vest equally over three years.

Restricted stock and restricted stock unit transactions during the year ended June 30, 2026 and six months ended June 30, 2025 are summarized as follows:

As of June 30, 2026 and June 30, 2025, there was $14,000 and $53,000, respectively, of unrecognized compensation costs related to outstanding restricted stock, which is expected to be recognized over the remaining average vesting period of approximately 0.9 years.

Employee Stock Purchase Plan. The Company has an Employee Stock Purchase Plan (the “ESPP”) that enables employees to contribute up to 10% of their base compensation toward the purchase of the Company’s common stock at 85% of its market value on the first or last day of the year. Participants purchased 4,000, zero, andzero shares under the ESPP during the year ended June 30, 2026, the six months ended June 30, 2025, and the year ended December 31, 2024, respectively. At June 30, 2026,19,425 shares were reserved for future employee purchases of common stock under the ESPP. For the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, the Company recognized $6,000, $3,000, and $-0-, respectively, of stock-based compensation expense related to the ESPP that was recognized in the continuing operations of the Company’s consolidated statements of operations.

Dividends. The Company has not historically paid dividends, other than one-time dividends declared in 2011 and 2016. The Company intends to retain earnings from operations for use in advancing the Company’s business strategy; however, the Company may consider special dividends in the future.

12. Related Party Note Payable**.**

On August 15, 2024, and as amended on September 27, 2024 and January 15, 2025, the Company entered into an unsecured Delayed Draw Term Note (the “2024 Note”) with Air T Inc. (“Air T”) pursuant to which Air T agreed to advance from time to time until August 15, 2026, initially not on a revolving basis, up to $3,750,000 to fund the Company’s operations. In January 2026, the 2024 Note was amended to allow for borrowing on a revolving basis. The 2024 Note had a maturity date of August 15, 2029, subject to Air T’s right to demand payment on or after February 15, 2026. Air T Inc. beneficially owns approximately 34% of the Company’s outstanding common stock and is a member of a group of stockholders that collectively owns approximately 60% of the Company’s outstanding common stock. Amounts outstanding under the 2024 Note bore interest at a fixed rate of 8.0%, subject to a 3.0% increase upon certain events of default, payable on the maturity date. As of June 30, 2025, the Company had $3,350,000 of principal outstanding and $209,000 of paid-in-kind interest outstanding under the 2024 Note. The 2024 Note is included in total current liabilities on the condensed consolidated balance sheets as of June 30, 2025.

On September 15, 2025, the Company entered into unsecured Promissory Notes (collectively, the “2025 Notes”) with Air T, AO Partners I, L.P. (“AO Partners Fund”), and Gary S. Kohler (“Kohler,” and, together with Air T and AO Partners Fund, the “2025 Note Lenders”), pursuant to which the 2025 Note Lenders loaned the Company a total of $4,000,000, in the amounts of $1,100,156, $1,699,844, and $1,200,000, respectively. Kohler is Chief Investment Officer and Portfolio Manager of BCCM Advisors, LLC, which beneficially owns approximately 10.4% of the Company’s outstanding common stock. Proceeds from the 2025 Notes were used to fund operations of the Bloomia business. Amounts outstanding under the 2025 Notes bore interest at a fixed rate of 13.5% per year payable at the scheduled maturity date of June 1, 2027. The 2025 Notes restricted the Company’s ability to obtain additional indebtedness, either directly or through its subsidiaries, other than existing indebtedness and usual and customary indebtedness incurred in the operation of the Company’s business, which restrictions could be waived by the 2025 Note Lenders holding a majority interest in the 2025 Notes. No closing or origination fees were paid to any 2025 Note Lender.

Interest expense incurred related to both the 2024 Note and 2025 Notes was $453,000 in the year ended June 30, 2026. Interest expense incurred related to the 2024 Note was $140,000 for the six months ended June 30, 2025. Interest expense incurred related to both the 2024 Note and 2025 Notes is included in non-cash paid in-kind interest expense on the condensed consolidated statements of cash flows.

On April 1, 2026, in connection with the Company’s rights offering, $7,100,000 of principal and accrued interest for the related party notes, including the 2024 Note and the 2025 Notes, were converted into shares of common stock pursuant to the terms of the rights offering. As a result, as of April 1, 2026, the Company hasno obligations outstanding under the 2024 Note and the 2025 Notes.

On April 13, 2026, the Company entered into an unsecured Promissory Note (the “2026 Note”) with Kohler, pursuant to which Kohler loaned the Company the principal amount of $1,000,000. Proceeds from the 2026 Note were used towards the initial payment towards the Discounted Prepayment Amount on the Seller Note as described in Note 10 to these consolidated financial statements. The principal amount of the 2026 Note bears interest at a fixed rate of 11.5% per annum, which increases to 14.5% if there is an event of default under the 2026 Note (with the 2026 Note containing customary events of default for a promissory note of this type). The 2026 Note is scheduled to mature on March 31, 2029, at which time all principal and accrued and unpaid interest is due and payable in full. The Company has the right to prepay the 2026 Note in whole or in part at any time without penalty. Amounts paid or prepaid under the 2026 Note may not be reborrowed by the Company. No closing or origination fees were paid in connection with the 2026 Note. As of June 30, 2026, the 2026 Note had a balance of $1,025,000, of which $25,000 was accrued PIK interest.

13. Leases.

The Company is party to leasing contracts in which the Company is the lessee. These lease contracts are classified as either operating or finance leases. The Company’s lease contracts include land, buildings, and equipment. Remaining lease terms range from 1 to 15 years with various term extension options available. The Company includes optional extension periods and early termination options in its lease term if it is reasonably likely that the Company will exercise an option to extend or terminate early.

ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term, at the later of the commencement date or business combination date. Because most of the Company’s leases do not provide an implicit rate of return, the discount rate is based on the collateralized borrowing rate of the Company, on a portfolio basis.

We have corrected the presentation of the ROU assets and lease liabilities as of June 30, 2025 to include the impact of a lease amendment that was signed in 2024, but was not previously included in the balances. The error resulted in an increase in the operating lease ROU asset by $1,822,000 and the current portion of operating lease liabilities by $9,000 and the operating lease liabilities, net of current portion by $1,813,000 on the condensed consolidated balance sheets. We evaluated the effects of these errors in the previously issued consolidated financial statements for both the prior annual periods and interim periods of the current and prior years. We concluded, based on the relevant quantitative and qualitative factors, that the errors were not material, individually or in the aggregate, in relation to the consolidated financial statements taken as a whole.

As of June 30, 2025, the Company leased space from a related party under a non-cancelable operating lease for its corporate headquarters. The lease had monthly payments of $375 through September 30, 2025. The lease does not include a renewal option. The Company continues to rent the space on a month-to-month basis, with a monthly rental payment of $375.

The weighted average remaining lease term and weighted average discount rate is as follows at:

The components of lease expense from continuing operations are as follows within the consolidated statements of operations:

Supplemental cash flow information related to leases where the Company is the lessee is as follows:

As of June 30, 2026, the maturities of the operating and finance lease liabilities are as follows:

14. Income Taxes.

(Loss) income from continuing operations before income taxes disaggregated between domestic and foreign is as follows:

Income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign for the year ended June 30, 2026 and the six months ended June 30, 2025 is as follows:

Income tax (benefit) expense from continuing operations disaggregated by federal (national), state, and foreign is as follows:

For the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, the income tax expense (benefit) attributable to noncontrolling interest was $44,000, $(22,000), and $(298,000), respectively.

The reconciliation between the Company’s effective tax rate and its statutory tax rate for the year ended June 30, 2026 and the six months ended June 30, 2025 is as follows:

Income tax (benefit) expense differs from the expected tax (benefit) expense computed by applying the U.S. federal corporate income tax rate of 21% to (loss) income from continuing operations before income taxes as a result of the following:

Components of resulting noncurrent deferred tax assets (liabilities) are as follows:

As of June 30, 2026, the Company had $540,000 of current tax receivables and $1,415,000 of current tax liabilities included in prepaid expenses and other current assets and accrued expenses and other current liabilities, respectively, in the consolidated balance sheets. As of June 30, 2026, the Company had approximately $10,570,000 of federal net operating loss carryforwards available to offset future taxable income. Federal net operating losses generated after 2017 do not expire and may be carried forward indefinitely. The Company also had approximately $3,983,000 of pre-tax state net operating loss carryforwards. The expiration of state NOLs carried forward varies by taxing jurisdiction. Future utilization of NOLs carried forward may be subject to certain limitations under Section 382 of the Internal Revenue Code.

The Company evaluates all significant available positive and negative evidence, including the existence of losses in prior years and its forecast of future taxable income, in assessing the need for a valuation allowance. The underlying assumptions the Company uses in forecasting future taxable income require significant judgment and take into consideration the Company’s recent performance. The change in the valuation allowance for the year ended June 30, 2026 was a decrease of $136,000. The Company’s valuation allowance as of June 30, 2026 was related to state NOLs that are not expected to be utilized.

As of June 30, 2026, and June 30, 2025, there were $119,000 and $35,000 of unrecognized tax benefits, respectively, that if recognized would affect the annual effective tax rate. This liability is reflected as accrued expenses and other current liabilities on the Company’s consolidated balance sheets. The amount of the unrecognized tax benefits, if recognized, that would affect the effective income tax rates of future periods is $119,000. The Company recognized accrued interest related to unrecognized tax benefits in tax expense. For the year ended June 30, 2026, six months ended June 30, 2025, and twelve months ended December 31, 2024, the Company recognized approximately $23,000, $-0-, and $1,000, respectively, in interest and penalties.

The Company files income tax returns in the United States and numerous state and local tax jurisdictions. Tax years 2022 and forward are open for examination and assessment by the Internal Revenue Service. With limited exceptions, tax years prior to 2022 are no longer open in major state and local tax jurisdictions.

A reconciliation of the beginning and ending amount of the liability for uncertain tax positions is as follows:

15. Commitments and Contingencies.

Litigation. Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

In the ordinary course of the business, the Company is subject to periodic legal or administrative proceedings. As of June 30, 2026, the Company was not involved in any material claims or legal actions which, in the opinion of management, the ultimate disposition would have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.

Purchase Obligation. On July 1, 2023, the Company entered into an obligation with a third-party to purchase 25% of their annual production of tulip bulbs through 2028 for $1,650,000 annually, totaling $8,000,000 over the duration of the agreement. In addition, the Company entered into a separate agreement with the same party to supply tulips to that party over athree-year period for a total of $360,000. The Company will be paid inthree sums of $120,000 beginning on March 1, 2026, with the final payment to be received on March 1, 2028.

The Company commits to purchase the majority of its tulip bulbs from July to September each year with the majority of the payment due in September. As of June 30, 2026, the Company had committed to purchase $1,359,000 of tulips bulbs. As of August 2026, the Company had committed to purchasing approximately $14 million of tulip bulbs to be paid for between September 2026 and February 2027.

Forward Currency Contracts. The Company enters into foreign currency forward contracts to manage exposure to changes in the Euro exchange rate on forecasted transactions denominated in Euro. The contracts are not designated as hedging instruments under ASC 815 Derivatives and Hedging, and the changes in fair value are recognized in earnings. Between January 2026 and June 2026, the Company entered into foreign currency contracts to purchase €4,000,000 for $4,745,000 between September 1, 2026 and September 30, 2026. The purpose of these contracts is to manage exposure to changes in the Euro exchange rate on forecasted bulb purchases and import stem purchases denominated in Euro. For the year ended June 30, 2026, a loss of $159,000 was recognized in foreign exchange difference, net, in the consolidated statements of operations as a result of forward currency contracts. As of June 30, 2026, the Company had a liability of $147,000 related to these foreign currency contracts included in accrued expenses and other current liabilities on the consolidated balance sheets.

16. Employee Benefit Plans.

For all Dutch employees, the Company participates in defined contribution pension plans with an independent insurance company. Defined contributions are expensed in the year in which the related employee services are rendered. The Company makes contributions on behalf of all Dutch employees of which $77,000, $45,000, and $77,000 were made and expensed for the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, respectively. Eligible employees in the United States are able to participate in a 401(k) defined contribution plan. The Company incurred $56,000, $25,000, and $36,000 in 401(k) expense for the year ended June 30, 2026, six months ended June 30, 2025, and year ended December 31, 2024, respectively.