[8-K] BLUM HOLDINGS, INC. Reports Material Event

Rhea-AI Filing Summary

Blüm Holdings, Inc. executed two unsecured promissory notes on September 16 and 17, 2025 for $500,000 and $250,000 respectively, creating $750,000 of principal indebtedness due in 2027. Each note bears an 8.0% annual interest rate payable monthly in arrears beginning January 15, 2026, and may be prepaid without penalty. At the lender's election each note is convertible into a convertible promissory note that will automatically convert into Blüm common stock at a conversion price equal to 85% of a $20,900,000 pre-money valuation (implying $0.98 per share on a fully diluted basis). The company also issued warrants: up to 571,429 shares exercisable at $0.35 per share for the $500,000 note and up to 285,714 shares at $0.35 per share for the $250,000 note. The $500,000 note formalizes funds advanced on August 11, 2025. Full terms are filed as Exhibits 10.1 and 10.2.

Positive

• Raises $750,000 in committed financing to support operations
• Convertible feature allows debt to convert to equity, reducing cash repayment pressure if converted
• No prepayment penalty provides the company flexibility to refinance or repay early

Negative

• Potential dilution from conversion at 85% of a $20.9M pre-money valuation (implied $0.98/share) and warrants for up to 857,143 shares at $0.35 each
• Unsecured obligations increase leverage without collateral, reducing creditor protection
• Interest cash burden of 8.0% per annum payable monthly beginning January 15, 2026

Insights

Corporate Finance Analyst

TL;DR: Blüm raised $750K via short-term unsecured notes with conversion features and significant warrant coverage, creating dilution risk and a near-term interest burden.

The notes create a direct financial obligation of $750,000 maturing in September 2027 and impose an 8.0% annual cash interest obligation beginning January 2026. Conversion at 85% of a $20.9M pre-money valuation implies an effective per-share conversion price of $0.98 on a fully diluted basis; combined warrants add potential dilution if exercised at $0.35. The $500,000 note documents prior funding advanced on August 11, 2025. The instruments are unsecured and therefore increase leverage without adding collateral, while warrant strike well below the stated conversion pricing, increasing potential equity dilution upon exercise.

Securities & Capital Markets Specialist

TL;DR: The financing structure balances debt and equity conversion but includes aggressive warrant economics that could materially dilute existing shareholders.

The convertible mechanics allow lenders to convert debt into equity at a discount to the stated pre-money valuation, which is common in bridge financings. However, warrants for a combined 857,143 shares exercisable at $0.35 present an additional avenue for dilution. The unsecured nature of the notes provides flexibility to the company but raises creditor recovery risk in downside scenarios. Material terms are provided and full forms are filed as exhibits for verification.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 16, 2025

BLUM HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		000-56626		93-3735199
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

11516 Downey Ave., Downey, California						90241
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code: (888) 909-5564

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry into a Material Definitive Agreement.

On September 16, 2025, Blum Holdings, Inc. ("Blüm" or the “Company”) executed and delivered an Unsecured Promissory Note in the principal amount of $500,000 (the “Note”) to an investor (the “Lender”). The Note has a maturity date of September 16, 2027 and bears interest at a rate of 8.0% per annum payable monthly in arrears, commencing on January 15, 2026. The Company may prepay the principal balance in full at any time without penalty. The Note is convertible at the Lender’s election into a convertible promissory note that shall include an automatic conversion into the shares of capital stock issued by Blüm at a conversion price equal to 85% of a $20,900,000 pre-money valuation of Blüm (equal to a per share price of $0.98 on a fully diluted basis). The Company shall grant to the Lender warrants to purchase up to 571,429 shares of the Company's common stock, at an exercise price of $0.35 per share. The Unsecured Promissory Note dated September 16, 2025 is a formal agreement for the advance payment of $500,000 received on August 11, 2025 as disclosed in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.

On September 17, 2025, the Company executed and delivered an Unsecured Promissory Note in the principal amount of $250,000 (the “Second Note”) to an investor (the “Lender”). The Second Note has a maturity date of September 17, 2027 and bears interest at a rate of 8.0% per annum payable monthly in arrears, commencing on January 15, 2026. The Company may prepay the principal balance in full at any time without penalty. The Second Note is convertible at the Lender’s election into a convertible promissory note that shall include an automatic conversion into the shares of capital stock issued by Blüm at a conversion price equal to 85% of a $20,900,000 pre-money valuation of Blüm (equal to a per share price of $0.98 on a fully diluted basis). The Company shall grant to the Lender warrants to purchase up to 285,714 shares of the Company's common stock, at an exercise price of $0.35 per share.

The Note and the Second Note are collectively referred to herein as the "Notes".

The foregoing descriptions of the Notes do not purport to be complete and are qualified in its entirety by reference to the full text of the form of Notes, which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and incorporated by reference herein.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information under Item 1.01, above, is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit						Description
10.1						Form of Unsecured Promissory Note, dated September 16, 2025.
10.2						Form of Unsecured Promissory Note, dated September 17, 2025.
104						Cover Page Interactive Data File (embedded within the Inline XBRL Document).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			BLUM HOLDINGS, INC.
Date: September 22, 2025			By:			/s/ Sabas Carrillo
						Sabas Carrillo
						Chief Executive Officer

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FAQ

What amounts did BLMH borrow under the new 8-K?

Blüm executed two unsecured promissory notes totaling $750,000 ($500,000 and $250,000).

When do the notes mature and what is the interest rate?

The notes mature on September 16, 2027 and September 17, 2027, each bearing 8.0% annual interest payable monthly starting January 15, 2026.

Can the notes convert into equity for BLMH?

Yes. At the lender's election each note converts into a convertible promissory note that will automatically convert into Blüm common stock at 85% of a $20,900,000 pre-money valuation (implied $0.98 per share fully diluted).

Were any warrants issued with the financing?

Yes. The $500,000 note includes warrants to purchase up to 571,429 shares at $0.35 per share; the $250,000 note includes warrants for 285,714 shares at $0.35.

Does the $500,000 note relate to prior advances?

Yes. The $500,000 note formalizes an advance of $500,000 received on August 11, 2025 as previously disclosed in the quarterly report for the quarter ended June 30, 2025.