RYTHM Says Beneficial Ownership Jumps to 89.9% After Warrant Amendments

What happened

RYTHM, Inc., a Nevada company whose common stock trades on the Nasdaq Capital Market under the ticker RYM and which is listed under the agricultural services category, disclosed in a Form 8-K filed August 11, 2026 that it entered an amendment agreement on August 10, 2026 with RSLGH, LLC and Vision Management Services, LLC. Both counterparties are subsidiaries of Green Thumb Industries Inc., according to the filing.

The amendment, which takes effect October 10, 2026, changes three sets of instruments: pre-funded warrants held by RSLGH to purchase up to 9,731,638 shares of common stock, secured convertible notes held by RSLGH with an aggregate original principal amount of $72.0 million, and an Amended and Restated Shared Services Agreement originally entered with VMS on May 20, 2025.

According to the filing, the amendment removes all beneficial ownership limitations on conversion of the notes, exercise of the warrants, and exercise of certain pre-funded warrants that may be issued in the future under the notes or the services agreement.

Ownership and the shareholder vote

The filing states that, as a result of removing those ownership caps, RSLGH's beneficial ownership of RYTHM common stock increased from 49.99% to approximately 89.9% as of August 11, 2026, measured under Rule 13d-3 of the Securities Exchange Act. RYTHM reported 2,179,128 shares outstanding as of August 10, 2026, of which 698,961 were held by RSLGH.

Also on August 10, 2026, shareholders at a special meeting approved the issuance of common stock to holders of certain convertible promissory notes and warrants and under shared services agreements, in accordance with Nasdaq Listing Rule 5635. The filing reports 1,118,058 votes for, 10,049 against, and 747 abstained. Of the 2,179,128 eligible shares, 1,128,854, or about 51.8%, were represented at the meeting, constituting a quorum.

The filing notes that Benjamin Kovler, RYTHM's Chairman and Interim Chief Executive Officer, also serves as Green Thumb's Chairman and CEO, and that RYTHM director Armon Vakili is an employee of Green Thumb. RYTHM states the aggregate consideration paid for the securities was $109.5 million, sourced from Green Thumb working capital along with interest payable under the notes and fees payable under the services agreement. It also states there are no arrangements or understandings between Green Thumb and other stockholders regarding the election of directors or other matters, and no arrangements known to the company that may result in a further change of control.

RYTHM common stock closed at $23.16 on the event date, down 2.03% from the prior close of $23.64, according to the price data provided.

What this means

A Form 8-K is a current report that a US-listed company files with the SEC when specific events occur between quarterly reports. The item numbers in the filing identify which events are being reported: 1.01 for a material definitive agreement, 2.03 for a new direct financial obligation, 3.02 for an unregistered sale of equity, 5.01 for a change in control, 5.07 for a shareholder vote, and 9.01 for exhibits.

The instruments at the center of this filing are convertible notes and pre-funded warrants. A convertible note is a loan that can be repaid by issuing shares instead of cash, and here the notes carry an aggregate original principal of $72.0 million. A pre-funded warrant is a contract that lets the holder buy shares later for a nominal amount; RSLGH's warrants cover up to 9,731,638 shares. 'Pre-funded' means the buyer has effectively paid for the shares up front, so the remaining exercise price is small.

Beneficial ownership limits are caps written into these instruments that stop the holder from converting or exercising once its stake reaches a set threshold, commonly 4.99% or 9.99%. The purpose is usually to keep the holder from tripping rules that would otherwise apply to large owners or to avoid owing shares that would exceed what the company is permitted to issue. Here the caps were set near 49.99%, and removing them allows RSLGH's stake to be counted at approximately 89.9% under Rule 13d-3 of the Exchange Act, which defines beneficial ownership by economic exposure and voting power rather than by record ownership.

A change of control at that level is significant because it means one entity, RSLGH, can direct the outcome of ordinary shareholder votes. The filing explicitly does not describe any plan to replace the board or take further action, so the immediate effect is a change in who controls the vote, not a stated change in operations.

The unregistered sale item matters because the securities were not registered with the SEC. Instead, RYTHM relied on Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D, exemptions that allow sales to a limited number of accredited investors without a public registration statement. RSLGH is described as an accredited investor that bought for investment rather than resale. If the company wanted to issue shares more broadly or sell them to the public, that would require registration or another exemption.

Nasdaq Listing Rule 5635 is the rule that requires a shareholder vote before a company issues shares in certain large transactions, including when the issuance could result in a change of control. The vote at the special meeting satisfies that requirement. The amendment's effective date is set for October 10, 2026, so the ownership and conversion changes described in the filing do not take effect immediately.