Financial Analysis

11. Commitments and Contingencies. Litigation. Liabilities for loss contingencies arising from claims, assessments, litigation, fines, 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 December 31, 2025, 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 Companys condensed 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 a three-year period for a total of $360,000. The Company will be paid in three sums of $120,000 beginning on March 1, 2026, with the final payment to be received on March 1, 2028. Forward Currency Contract. On November 25, 2025, the Company entered into a foreign currency forward contract to manage exposure to changes in the Euro exchange rate on forecasted transactions de …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

6. Long-term debt, net. The components of debt consisted of the following at: December 31, 2025 June 30, 2025 Amended Credit Agreement - term loan $ 14,850,000 $ 15,750,000 Notes payable 12,750,000 12,750,000 Amended Credit Agreement - revolving credit facility 10,000,000 Paid in-kind interest (PIK) 2,844,000 2,065,000 Machinery financing loans 197,000 231,000 $ 40,641,000 $ 30,796,000 Less: unamortized debt issuance costs (232,000) (272,000) Total debt $ 40,409,000 $ 30,524,000 PIK included in accrued expenses and other current liabilities (300,000) (300,000) Less current maturities (1,884,000) (1,870,000) Long-term debt, net of current maturities $ 38,225,000 $ 28,354,000 To finance the acquisition of Bloomia, the Company entered into a revolving credit and term loan agreement (the Credit Agreement), with Tulp 24.1 as the borrower (the Borrower) for a $18,000,000 term loan and a $6,000,000 revolving credit facility. The Company pays $450,000 of principal term loan payments quarterly. On October 16, 2024, the Company entered into a First Amendment to Credit Agreement to, among other things, temporarily increase the borrowing capacity under the revolving credit facility to $8,000,000 until March 31, 2025. On September 15, 2025, the Company, as parent guarantor, entered into a Second Amendment to Credit Agreement (the Credit Agreement, as amended by the First Amendment to Credit Agreement and the Second Amendment to Credit Agreement, the Amended Credit Agreement), together wit …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Supermarket $ 5,716,000 $ 5,629,000 $ 10,590,000 $ 11,308,000 Wholesaler 1,023,000 563,000 1,282,000 1,449,000 Other 20,000 63,000 $ 6,739,000 $ 6,192,000 $ 11,892,000 $ 12,820,000 …

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5. Goodwill and Other Intangible Assets. The following table summarizes the changes in goodwill: Balance as of June 30, 2025 $ 11,128,000 Other - Foreign currency translation 28,000 Balance as of December 31, 2025 $ 11,156,000 Other intangible assets and related amortization are as follows: December 31, 2025 June 30, 2025 Carrying Useful Life Accumulated Net Carrying Accumulated Net Carrying Amount (Years) Amortization Amount Amortization Amount Tradename $ 8,570,000 Indefinite $ $ 8,570,000 $ $ 8,570,000 Customer relationships 18,300,000 12 2,827,000 15,473,000 2,064,000 16,236,000 $ 26,870,000 $ 2,827,000 $ 24,043,000 $ 2,064,000 $ 24,806,000 For each of the three months ended December 31, 2025 and 2024, amortization of intangible assets expensed to operations was $382,000. For each of the six months ended December 31, 2025 and 2024, amortization of intangible assets expensed to operations was $763,000. The weighted average remaining amortization period for intangible assets as of December 31, 2025 and June 30, 2025 is approximately 10.1 years and 10.6 years, respectively. Remaining estimated annual amortization expense is as follows for the fiscal years ended June 30: Remainder of 2026 $ 763,000 2027 1,525,000 2028 1,525,000 2029 1,525,000 2030 1,525,000 Thereafter 8,610,000 Total $ 15,473,000 …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

9. Income Taxes. Income tax benefit and the effective tax rates were as follows: Three Months Ended Six Months Ended December 31, December 31, 2025 2024 2025 2024 Income tax benefit $ (661,000) $ (1,045,000) $ (1,382,000) $ (1,781,000) Effective income tax rate 20 % 24 % 19 % 27 % For the three and six months ended December 31, 2025, the rate differs from the federal statutory rate of 21% due to state taxes, foreign taxes, and other permanent items. For the three and six months ended December 31, 2024, the rate differs from the federal statutory rate of 21% due to state and foreign taxes, valuation allowance change, nondeductible transaction costs, and other permanent items. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Pronouncements. In November 2024, the FASB issued 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 condensed consolidated financial statements and the accompanying notes to the financial statements. Recently Adopted Accounting Pronouncements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires public companies to expand their income tax disclosures with respect to the reconciliation of the effective tax rate to the statutory rate for federal, state, and foreign income taxes and requires greater detail about significant reconciling items in the reconciliation. Additionally, the amendment requires disaggregated information pertaining to taxes paid, net of refunds received, for federal, state, and foreign income taxes. ASU 2023-09 is effective for fisca …

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7. Related Party Notes 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 has agreed to advance from time to time until August 15, 2026, but not on a revolving basis, up to $3,750,000 to fund the Companys operations. In January 2026, the 2024 Note was amended to allow for borrowing on a revolving basis. The 2024 Note remains scheduled to mature, and all principal and accrued but unpaid interest will become due on August 15, 2029, subject to Air Ts right to demand payment on or after February 15, 2026. Air T Inc. beneficially owns greater than 10% of our outstanding Common Stock and is a member of a group of stockholders that collectively owns approximately 40% of our outstanding common stock. Amounts outstanding under the 2024 Note bear interest at a fixed rate of 8.0%, which may be increased by 3.0% upon certain events of default, and the interest accrued and deferred until the maturity date. As of December 31, 2025 and June 30, 2025, the Company had $2,150,000 and $3,350,000, respectively, of principal outstanding and $301,000 and $209,000, respectively, of paid-in-kind interest outstanding under the 2024 Note. The 2024 Note is included total current liabilities on the condensed consolidated balance sheets as of December 31, 2025 and June 30, 2025. On September 15, 2025, the Company entered into unsecured Promissory …

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