RYTHM, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue from continuing operations was $23.9 million, a 4% increase from $23.0 million in the prior quarter and a 490% increase from $4.0 million in the same period last year.
• Hemp-derived product revenue increased 15% sequentially to $6.4 million.
• Operating income from continuing operations was $1.0 million, compared to an operating loss of $8.9 million in the prior quarter and a loss of $19.4 million in the same period last year.
• Net loss was $0.5 million, compared to a net loss of $10.7 million in the prior quarter and a net loss of $19.7 million in the same period last year.
• Adjusted EBITDA was $5.9 million, down from $6.4 million in the prior quarter and up from a loss of $6.5 million in the same period last year.
• Cash flow from operations was $6.3 million for the quarter, contributing to a total cash balance of $48.2 million at quarter-end.
• Total assets were $134.7 million, with $26.8 million in deferred tax assets and $39.0 million in intangible assets and related party prepaid license rights.
• Total liabilities were $92.6 million, including $72.0 million in related party debt (current) and $8.6 million in long-term debt (current).
• Total equity was $42.1 million.

Guidance and Future Outlook:

• The Company is not providing an outlook for the fourth quarter of 2026 due to upcoming regulatory changes.
• Federal law changes affecting hemp-derived THC products, originally scheduled for November 12, 2026, were extended to December 11, 2026, which would prohibit the sale of current hemp-derived THC products in their existing form.
• State restrictions, including in Illinois, become effective November 12, 2026, and would similarly restrict sales in those jurisdictions.

Business Segments and Product Lines:

• THC beverage depletions increased approximately 15% sequentially and 185% year-over-year, reaching an annualized run rate of approximately 320,000 cases.
• The Company's THC beverages are available in approximately 8,000 retail doors across 18 states.
• Launched RYTHM Lifted Lemon, a new THC twist on iced tea and lemonade.
• Brand visibility expanded through presence at major entertainment venues, including Lollapalooza, Riot Fest, Shaky Knees, the United Center, and Opry Entertainment Group venues.
• RYTHM is the official THC beverage partner of Chicago's Navy Pier.
• The Señorita brand was added to the fixed-fee license structure with Green Thumb Industries, increasing the aggregate annual fee by $250,000 to $70.25 million.

Market and Competitive Landscape:

• THC beverages are emerging as a fourth adult beverage category alongside beer, wine, and spirits, gaining national shelf space and presence at major entertainment venues.
• The Company maintains exclusive rights to commercialize the Señorita brand outside state-regulated cannabis dispensary channels, where legally permitted.
• Green Thumb Industries will consolidate RYTHM's results in its financial statements beginning October 10, 2026, following the removal of the 49.99% beneficial ownership limitation.

Risks and Challenges:

• Upcoming federal and state regulatory changes effective December 11, 2026 (federal) and November 12, 2026 (state) pose a risk to the sale of current hemp-derived THC products.
• The Company faces the risk that Congress does not amend or repeal the pending federal prohibition on hemp-derived THC products prior to the effective date.
• Changes in state laws governing hemp-derived THC products could adversely affect the Company's ability to sell certain products.

Management Commentary and Tone:

• Chairman and Interim CEO Ben Kovler stated that results demonstrate growing consumer demand, continued commercial execution, and financial flexibility to navigate the regulatory environment.
• Management expressed conviction and discipline, noting that their brands are the foundation of long-term value and their channel presence positions them to reach consumers as regulations evolve.
• Management believes the future of THC beverages depends on a responsible regulatory framework that draws a clear line between regulated and unregulated products.

Other Key Points:

• At quarter-end, the Company had approximately 2.2 million shares outstanding, 11.2 million warrants outstanding, and 3.0 million shares issuable upon conversion of outstanding convertible notes.
• Stockholder approval was obtained on August 10, 2026, to amend convertible notes, pre-funded warrants, and the shared services agreement with Green Thumb subsidiaries to remove the 49.99% beneficial ownership limitation, effective October 10, 2026.
• The Company continues to report its financial results independently in its own periodic reports filed with the SEC despite Green Thumb's consolidation of results.
• Nine-month cash flow from operating activities was $16.0 million, compared to a use of $20.5 million in the same period last year.