☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November ~~9, 2020,~~15, 2021, ~~300,416,773~~333,144,567 shares of the registrant’s common stock were outstanding.

							September 30,			December 31,
	September 30, 2020			December 31, 2019			2021			2020
	(Unaudited)						(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	2,261,327		$	738,688		$	25,580,508		$	2,999,053
Accounts receivable, net		4,077,902			1,669,139			8,706,467			6,675,512
Deferred rents receivable		1,968,500			1,796,825			1,747,803			1,940,181
Due from third parties, net		9,937			-
Notes receivable, current portion		540,319			311,149			124,426			658,122
Inventory		6,802,291			1,219,429			10,993,963			6,830,571
Investments		1,002,659			1,449,144			419,803			1,357,193
Other current assets		250,045			192,368			2,213,348			582,589
Total current assets		16,912,980			7,376,742			49,786,318			21,043,221

Property and equipment, net		45,507,577			42,792,369			59,516,169			45,636,529
Intangibles, net		2,311,181			2,364,042			2,348,948			2,228,560
Investments		1,085,528			1,324,661			-			1,165,788
Notes receivable, less current portion		1,084,671			1,639,496			1,188,478			965,008
Right-of-use assets under operating leases		5,381,761			5,787,423			5,245,577			5,247,152
Right-of-use assets under finance leases		86,591			111,103			53,908			78,420
Other assets		80,493			175,905			97,951			80,493
Total assets	$	72,450,782		$	61,571,741		$	118,237,349		$	76,445,171

Liabilities, mezzanine equity, and stockholders’ equity
Current liabilities:
Accounts payable	$	6,292,958		$	4,719,069		$	7,092,073		$	5,044,918
Accrued expenses		3,111,373			5,395,996			11,094,752			3,621,269
Sales and excise taxes payable								1,725,618			1,053,693
Debentures payable								-			1,032,448
Notes payable, current portion		8,512,590			23,112,742			9,705			8,859,175
Mortgages payable, current portion		1,379,541			223,888			1,412,545			1,387,014
Debentures payable, current portion		2,928,047			-
Operating lease liabilities, current portion		1,002,171			917,444			1,097,008			1,008,227
Finance lease liabilities, current portion		38,412			38,412			30,288			38,412
Due to related parties		1,233,008			1,454,713			-			1,157,815
Other current liabilities		1,505,008			858,176			-			23,640
Total current liabilities		26,003,108			36,720,440			22,461,989			23,226,611

Notes payable, less current portion		11,653,775			-			925,871			10,682,234
Mortgages payable, less current portion		14,864,810			7,112,842			16,974,749			14,744,136
Debentures payable, less current portion		-			5,835,212
Operating lease liabilities, less current portion		4,967,583			5,399,414			4,717,933			4,822,064
Finance lease liabilities, less current portion		52,439			75,413			27,856			44,490
Other liabilities		100,200			100,200			100,200			100,200
Total liabilities		57,641,915			55,243,521			45,208,598			53,619,735

Mezzanine equity:
Series B convertible preferred stock, $0.001 par value; 4,908,333 and 0 shares authorized, issued and outstanding at September 30, 2020 and December 31, 2019, respectively		14,725,000			-
Series B convertible preferred stock, $0.001 par value; 4,908,333 shares authorized, issued and outstanding at September 30, 2021 and December 31, 2020								14,725,000			14,725,000
Series C convertible preferred stock, $0.001 par value; 6,216,216 and 0 shares authorized, issued and outstanding at September 30, 2021 and December 31, 2020, respectively								23,000,000			-
Total mezzanine equity								37,725,000			14,725,000

Stockholders’ equity:
Series A convertible preferred stock, $0.001 par value; 0 and 50,000,000 shares authorized at September 30, 2020 and December 31, 2019, respectively; 0 shares issued and outstanding at September 30, 2020 and December 31, 2019		-			-
No designation preferred stock, $0.001 par value; 45,091,667 and 0 shares authorized at September 30, 2020 and December 31, 2019, respectively; 0 shares issued and outstanding at September 30, 2020 and December 31, 2019		-			-
Common stock, $0.001 par value; 500,000,000 shares authorized at September 30, 2020 and December 31, 2019; 289,729,854 and 228,408,024 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively		289,730			228,408
Common stock subscribed but not issued; 33,319 and 3,236,857 shares at September 30, 2020 and December 31, 2019, respectively		5,365			1,168,074
Undesignated preferred stock, $0.001 par value; 38,875,451 and 45,091,667 shares authorized at September 30, 2021 and December 31, 2020, respectively; 0 shares issued and outstanding at September 30, 2021 and December 31, 2020								-			-
Common stock, $0.001 par value; 700,000,000 and 500,000,000 shares authorized at September 30, 2021 and December 31, 2020, respectively; 331,545,220 and 314,418,812 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively								331,545			314,419
Common stock subscribed but not issued; 202,204 and 11,413 shares at September 30, 2021 and December 31, 2020, respectively								189,184			5,365
Additional paid-in capital		109,115,215			112,245,730			127,231,090			112,974,329
Accumulated deficit		(108,737,141	)		(106,760,527	)		(90,883,748	)		(104,616,538	)
Noncontrolling interests		(589,302	)		(553,465	)		(1,564,320	)		(577,139	)
Total stockholders’ equity		83,867			6,328,220			35,303,751			8,100,436
Total liabilities, mezzanine equity, and stockholders’ equity	$	72,450,782		$	61,571,741		$	118,237,349		$	76,445,171

	2020			2019			2020			2019			2021			2020			2021			2020
	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019			2021			2020			2021			2020

Revenues	$	13,461,504		$	4,209,328		$	30,537,829		$	11,382,942		$	33,208,060		$	13,461,504		$	90,420,280		$	30,537,829
Revenues from related party		-			7,014,371			-			29,029,249
Total revenues		13,461,504			11,223,699			30,537,829			40,412,191

Cost of revenues		4,781,677			6,523,283			10,831,763			24,523,626			15,027,521			4,781,677			39,647,473			10,831,763

Gross profit		8,679,827			4,700,416			19,706,066			15,888,565			18,180,539			8,679,827			50,772,807			19,706,066

Operating expenses:
Personnel		1,354,644			1,241,535			4,075,168			2,740,039			1,481,350			1,354,644			5,266,745			4,075,168
Marketing and promotion		103,327			91,562			281,329			286,521			563,193			103,327			1,057,892			281,329
General and administrative		2,931,684			2,394,692			7,515,721			6,752,168			9,481,030			2,931,684			16,933,758			7,515,721
Bad debts		892,029			-			1,342,029			-			35,583			892,029			1,854,869			1,342,029
Total operating expenses		5,281,684			3,727,789			13,214,247			9,778,728			11,561,156			5,281,684			25,113,264			13,214,247

Operating income		3,398,143			972,627			6,491,819			6,109,837			6,619,383			3,398,143			25,659,543			6,491,819

Non-operating income (expenses):
Interest expense		(1,921,312	)		(4,516,576	)		(7,581,648	)		(9,076,583	)		(299,969	)		(1,921,312	)		(2,076,587	)		(7,581,648	)
Interest income		34,818			79,016			121,712			425,770			25,739			34,818			95,534			121,712
Loss on obligations settled with equity		-			-			(44,678	)		-			-			-			(2,546	)		(44,678	)
Equity in earnings of investments		51,511			(2,933,252	)		18,553			(1,020,310	)		-			51,511			-			18,553
Change in fair value of investments		217,374			-			(704,172	)		-			(522,106	)		217,374			(937,390	)		(704,172	)
Other		(84,708	)		-			(84,708	)		2,948,917			309,212			(84,708	)		309,212			(84,708	)
Total non-operating income (expenses), net		(1,702,317	)		(7,370,812	)		(8,274,941	)		(6,722,206	)		(487,124	)		(1,702,317	)		(2,611,777	)		(8,274,941	)

Income (loss) before income taxes		1,695,826			(6,398,185	)		(1,783,122	)		(612,369	)		6,132,259			1,695,826			23,047,766			(1,783,122	)
Provision for income taxes					901,477			-			1,886,072			4,009,111			-			9,026,016			-
Net income (loss)	$	1,695,826		$	(7,299,662	)	$	(1,783,122	)	$	(2,498,441	)	$	2,123,148		$	1,695,826		$	14,021,750		$	(1,783,122	)

Net income (loss) attributable to noncontrolling interests	$	36,959		$	99,021		$	193,492		$	246,367		$	103,113		$	36,959		$	288,960		$	193,492
Net income (loss) attributable to MariMed Inc.	$	1,658,867		$	(7,398,683	)	$	(1,976,614	)	$	(2,744,808	)	$	2,020,035		$	1,658,867		$	13,732,790		$	(1,976,614	)

Net income (loss) per share
Basic	$	0.006		$	(0.034	)	$	(0.008	)	$	(0.013	)	$	0.01		$	0.01		$	0.04		$	(0.01	)
Diluted	$	0.005		$	(0.034	)	$	(0.008	)	$	(0.013	)	$	0.01		$	0.00		$	0.04		$	(0.01	)

Weighted average common shares outstanding
Basic		281,535,212			217,417,326			254,387,761			214,274,342			329,454,104			281,535,212			324,340,006			254,387,761
Diluted		346,091,840			217,417,326			254,387,761			214,274,342			378,934,045			346,091,840			370,203,937			254,387,761

The above statements do not show columns for ~~Series A convertible~~undesignated preferred stock ~~and no designation~~

~~preferred stock~~ as the balances were zero and there was no activity in the ~~periods presented.~~reported periods.

	2020			2019			2021			2020
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2021			2020
Cash flows from operating activities:
Net income (loss) attributable to MariMed Inc.	$	(1,976,614	)	$	(2,744,808	)	$	13,732,790		$	(1,976,614	)
Net income (loss) attributable to noncontrolling interests		193,492			246,367			288,960			193,492
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		1,340,649			697,946			1,499,318			1,340,649
Asset write-off		84,708			-
Asset writeoff								-			84,708
Amortization of intangibles		307,861			154,167			518,182			307,861
Amortization of stock grants		16,094			193,710			233,368			16,094
Amortization of option grants		707,003			1,219,958			6,208,376			707,003
Amortization of stand-alone warrant issuances		2,179			139,016			832,105			2,179
Amortization of warrants attached to debt		631,895			1,836,892			539,272			631,895
Amortization of warrants issued with stock								654,681			-
Amortization of beneficial conversion feature		2,552,933			4,646,070			176,522			2,552,933
Amortization of original issue discount		286,353			107,256			51,753			286,353
Bad debt expense		1,342,029			-			1,854,869			1,342,029
Fees paid with stock								375,019			-
Loss on obligations settled with equity		44,678			-			2,546			44,678
Equity in (earnings) losses of investments		(18,553	)		1,020,310
Equity in earnings of investments								-			(18,553	)
Change in fair value of investments		704,172			-			937,390			704,172
Gain on sale of investment								(309,212	)			=
Changes in operating assets and liabilities:
Accounts receivable, net		(3,750,792	)		(4,788,303	)		(3,885,824	)		(3,750,792	)
Accounts receivable from related party, net					(33,200,000	)
Deferred rents receivable		(171,675	)		53,461			192,378			(171,675	)
Due from third parties		-			(174,516	)
Inventory		(5,582,862	)		(942,399	)		(4,163,392	)		(5,582,862	)
Other current assets		(57,677	)		7,154			(1,640,696	)		(57,677	)
Other assets		95,412			(262,981	)		(17,458	)		95,412
Accounts payable		2,272,810			(178,223	)		2,098,155			2,272,810
Accrued expenses		1,872,692			3,339,325			7,432,580			1,263,976
Deferred rents payable		-			(105,901	)
Operating lease payments		58,559			424,129
Sales and excise taxes payable								671,925			608,716
Operating lease payments, net								(13,775	)		58,559
Finance lease interest payments		4,033			(1,824	)		1,504			4,033
Unearned revenue from related party		-			4,170,750
Other current liabilities		646,832			197,943			(23,640	)		646,832
Other liabilities		-			(238,000	)
Net cash provided by (used in) operating activities		1,606,211			(24,182,501	)
Net cash provided by operating activities								28,247,696			1,606,211

Cash flows from investing activities:
Purchase of property and equipment		(4,116,053	)		(6,741,632	)		(14,649,446	)		(4,116,053	)
Purchase of cannabis licenses		(255,000	)		(150,000	)		(638,570	)		(255,000	)
Investment in notes receivable		-			(2,030,000	)
Return on investment								1,475,000			-
Interest on notes receivable		443,150			175,509			407,374			443,150
Acquisition		-			(655,804	)
Due from related parties		-			119,781
Net cash used in investing activities		(3,927,903	)		(9,282,146	)		(13,405,642	)		(3,927,903	)

Cash flows from financing activities:
Issuance of common stock		-			2,600,000
Issuance of promissory notes		5,249,763			17,000,000
Proceeds from issuance of preferred stock								23,000,000			-
Equity issuance costs								(386,983	)		-
Proceeds from issuance of promissory notes								35,096			5,249,763
Repayments of promissory notes		(10,770,011	)		-			(15,804,273	)		(10,770,011	)
Proceeds from issuance of debentures		935,000			9,600,000			-			935,000
Proceeds from mortgages		13,897,282			-			2,700,000			13,897,282
Payments on mortgages		(4,989,661	)		(142,170	)		(443,856	)		(4,989,661	)
Exercise of stock options		-			75,500
Exercise of warrants		-			612,442
Proceeds from exercise of options								31,500			-
Proceeds from exercise of warrants								92,775			-
Due to related parties		(221,705	)		139,402			(1,157,815	)		(221,705	)
Finance lease principal payments		(27,008	)		(11,167	)		(26,262	)		(27,008	)
Distributions		(229,329	)		(376,993	)		(300,781	)		(229,329	)
Net cash provided by financing activities		3,844,331			29,497,014			7,739,401			3,844,331

Net change to cash and cash equivalents		1,522,639			(3,967,633	)		22,581,455			1,522,639
Cash and cash equivalents at beginning of period		738,688			4,104,315			2,999,053			738,688
Cash and cash equivalents at end of period	$	2,261,327		$	136,682		$	25,580,508		$	2,261,327

Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,236,464		$	699,582		$	1,705,029		$	1,236,464
Cash paid for income taxes	$	488,772		$	88,150		$	419,070		$	488,772

Non-cash activities:
Conversion of promissory notes							$	3,346,445		$	460,050
Conversions of debentures payable	$	7,166,041		$	7,859,283		$	1,356,452		$	7,166,041
Acquisition of 30% interest in subsidiary							$	975,360		$	-
Purchase of property and equipment with stock							$	705,000		$	-
Operating lease right-of-use assets and liabilities							$	466,105		$	-
Common stock issued to settle obligations							$	51,000		$	698,922
Return of stock							$	9,937		$	-
Issuance of common stock associated with subscriptions							$	5,365		$	1,168,074
Cashless exercise of warrants							$	180		$	-
Cashless exercise of stock options							$	53		$	-
Exchange of common stock to preferred stock							$	-		$	14,725,000
Conversion of accrued interest to promissory notes							$	-		$	3,908,654
Discount on promissory notes							$	-		$	638,927
Beneficial conversion feature on debentures payable	$	379,183		$	4,235,469		$	-		$	379,183	��
Extinguishment of promissory note							$	-		$	352,000
Discount on debentures payable	$	28,021		$	1,148,056		$	-		$	28,021
Issuance of common stock associated with subscriptions	$	1,168,074		$	169,123
Discount on promissory notes	$	638,927		$	600,621
Conversion of promissory notes	$	460,050		$	-
Extinguishment of promissory note	$	352,000		$	-
Common stock issued to settle obligations	$	698,922		$	-
Exchange of common stock to preferred stock	$	14,725,000		$	-
Conversion of accrued interest to promissory note	$	3,908,654		$	-
Conversion of debentures receivable to investment	$	-		$	30,000,000
Operating lease right-of-use assets and liabilities	$	-		$	7,142,150
Finance lease right-of-use assets and liabilities	$	-		$	134,193
Conversion of notes receivable to investment	$	-		$	257,687
Conversion of advances to notes receivable	$	-		$	855,913
MediTaurus acquisition	$	-		$	2,500,000
Terrace investment	$	-		$	1,590,000
Harvest payment	$	-		$	1,000
Exercise of stock options via the reduction of an obligation	$	-		$	350,000
Cashless exercise of stock options	$	-		$	1,762
Reclass of accrued interest from notes payable	$	-		$	127,450
Reclass of accrued interest from debentures payable	$	-		$	62,748

MariMed Inc. (the “Company”) is a multi-state operator in the United States cannabis industry. The Company develops, operates, manages, and optimizes over 300,000square feet of state-of-the-art, regulatory-compliant facilities for the cultivation, production and dispensing of medicinal and recreational cannabis. The Company also licenses its proprietary brands of cannabis and hemp-infused products, along with other top brands, in several domestic markets and overseas.

Upon its entry into the cannabis industry in 2014, the Company was an advisory firm that procured state-issued cannabis licenses on behalf of its clients, ~~leased its~~developed cannabis facilities which it leased to these newly-licensed companies, and provided industry-leading expertise and oversight in all aspects of their cannabis operations. The Company also provided its clients with ongoing regulatory, accounting, real estate, human resources, and administrative services.

~~In 2018,~~More recently, the Company ~~commenced a~~made the strategic ~~plan~~decision to transition from a consulting business to a direct owner and operator of cannabis licenses ~~and operator of seed-to-sale operations. The Company’s strategic plan consists of the acquisition of its cannabis-licensed clients located~~ in ~~five states—Delaware, Illinois, Maryland, Massachusetts, and Nevada—and the consolidation of these entities under the MariMed banner.~~

~~A goal in completing~~high-growth states. Core to this transition is tothe acquisition and consolidation of the Company’s clients (the “Consolidation Plan”). Among several benefits, the Consolidation Plan would present a simpler, more transparent financial picture of the full breadth of the Company’s efforts, with a clearer representation of the revenues, earnings, and other financial metrics the Company has generated for its clients. The Company has played a key role in the successes of these entities, from the securing of their cannabis licenses, to the development of facilities that are models of excellence, to funding their operations, and to providing ~~industry best practices~~operational and corporate guidance. Accordingly, the Company believes it is well suited to own these facilities and manage the continuing growth of their operations.

To date, acquisitions of ~~the licensed~~its client businesses in Massachusetts and Illinois have been ~~state-approved and~~ completed and ~~establishes~~establish the Company as a fully integrated seed-to-sale multi-state ~~operator.~~operator (“MSO”). The acquisitions of the remaining entities located in Maryland, Nevada, and Delaware are at various stages of completion and subject to each state’s laws governing the ownership ~~and~~ transfer of cannabis licenses, which in the case of Delaware requires a modification of current cannabis ownership laws to permit for-profit ownership. Meanwhile, the Company continues to ~~develop additional~~expand these businesses and maximize the Company’s revenue from rental income, management fees, and ~~business in these states and plans to leverage its success to expand into other markets where cannabis is and becomes legal.~~licensing royalties.

The transition to a fully integrated MSO is part of a strategic growth plan (the “Strategic Growth Plan”) the Company is implementing to drive its revenues and profitability. The Strategic Growth Plan has four components: (i) complete the Consolidation Plan, (ii) increase revenues in existing states, by spending capital to increase the Company’s cultivation and production capacity, and develop additional assets within those states, (iii) expand the Company’s footprint in additional legal cannabis states through new applications and acquisitions of existing cannabis businesses, and (iv) optimize the Company’s brand portfolio and licensing revenue, by creating products that meet specific customer needs, and distributing these products in states where cannabis has been legalized.

As to its products, the Company has ~~also~~ created its own brands of cannabis flower, concentrates, and precision-dosed products utilizing proprietary strains and formulations. These products are developed by the Company in cooperation with state-licensed operators who meet the Company’s strict standards, including all natural—not artificial or synthetic—ingredients. The Company licenses its brands and product formulations only to certified manufacturing professionals who follow state cannabis laws and adhere to the Company’s precise scientific formulations and trademarked product recipes.

The ~~Company’s branded~~Company utilizes proprietary cannabis genetics to produce high-quality flowers and concentrates under the award-winning³Nature’s Heritage™ brand, and cannabis-infused products ~~are licensed~~ under the brand names ~~including~~ Kalm ~~Fusion™~~Fusion®, ~~Nature’s Heritage™, and Betty’s Eddies™, and are distributed~~ in the form of ~~dissolvable strips,~~chewable tablets ~~powders, microwaveable popcorn,~~and drink powder mixes, and the award-winning¹Betty’s Eddies® brand of all natural fruit ~~chews,~~chews. Both cannabis-infused brands are top-selling products in Maryland and ~~other varieties~~Massachusetts²and the Company intends to continue to introduce additional product lines under these brands in ~~development.~~ the foreseeable future.

The Company also has exclusive ~~sublicensing~~alliances with prominent brands. The Company has partnered with renown ice cream maker Emack & Bolio’s® to create a line-up of cannabis-infused vegan and dairy ice cream. Additionally, the Company has secured distribution rights ~~in certain states to distribute~~for the Binske® line of cannabis products crafted from premium artisan ingredients, the Healer™ line of medical full-spectrum cannabis tinctures, and the clinically-tested medicinal cannabis strains developed in Israel by global medical cannabis research pioneer Tikun Olam™. The Company’s hemp division distributes hemp-derived CBD products, including its Florance™ brand, in the US and abroad. The Company intends to continue licensing and distributing its brands, as well as other top brands, in the Company’s current markets and in additional legal markets worldwide.

In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic. The spread of the virus in the United States and the measures implemented to contain it—including business shutdowns, indoor capacity restrictions, social distancing, and diminished travel—have negatively impacted the economy and have created significant volatility and disruption in financial markets. Consequently, the Company’s expansion efforts and implementation of its strategic plan have been delayed. Additionally, while the cannabis industry has been deemed an essential business and is not expected to suffer severe declines in revenue, the Company’s business, operations, financial condition, and liquidity have been adversely affected, as further discussed in Item 2. ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~and the notes to the financial statements included in this report.~~

Continued disruption to the global economy may materially and adversely affect the future carrying values of certain of the Company’s assets, including inventories, accounts receivables, and intangibles, as well as negatively impact the Company’s ability to raise working capital to support its operations. The full extent to which COVID-19 and the measures to contain it will impact the Company’s business, operations financial condition, and liquidity will depend on the continued severity and duration of the COVID-19 outbreak and other future developments in response to the virus, all of which are highly uncertain at this time. As a result, the Company cannot predict the ultimate impact of COVID-19 on its operational and financial performance.

The Company’s stock is quoted on the OTCQX market under the ticker symbol MRMD.

The Company was incorporated in Delaware in January 2011 under the name Worlds Online Inc. Initially, the Company developed and managed online virtual worlds. By early 2014, this line of business effectively ceased operating, and the Company pivoted into the legal cannabis industry.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

In accordance with GAAP, interim financial statements are not required to contain all of the disclosures normally required in annual financial statements. In addition, the results of operations of interim periods may not necessarily be indicative of the results of operations to be expected for the full year. Accordingly, these interim financial statements should be read in conjunction with the Company’s most recent audited annual financial statements and accompanying notes for the year ended December 31, ~~2019.~~2020.

Certain reclassifications have been made to prior periods’ data to conform to the current period presentation. These reclassifications had no effect on reported income (losses) or cash flows.

In connection with the preparation of its financial statements for the nine months ended September 30, 2020, the Company’s management evaluated the Company’s ability to continue as a going concern in accordance with ASU 2014-15, ~~Presentation of Financial Statements–Going Concern (Subtopic 205-40)~~, which requires an assessment of relevant conditions or events, considered in the aggregate, that are known or reasonably knowable by management on the issuance dates of the financial statements which indicate the probable likelihood that the Company will be unable to meet its obligations as they become due within one year after the issuance date of the financial statements.

As part of its evaluation, management assessed known events, trends, commitments, and uncertainties, which at the time included the status of the Company’s consolidation plan, the continuing impact of the COVID-19 pandemic on its operations, developments concerning GenCanna’s bankruptcy proceedings, recent cannabis industry investment activity, price movements of public cannabis stock, actions and/or results of certain bellwether cannabis companies, the level of cannabis investor confidence, and changes to state laws governing recreational (adult-use) and medical cannabis.

Management also reviewed certain key liquidity metrics of the Company, as further described below, as well as other factors in its evaluation, and determined that there currently exists a substantial doubt that the Company will be able to continue as a going concern within one year after the issuance date of these financial statements without additional funding or the continued profitability growth of its cannabis operations in Illinois and Massachusetts.

~~The Company produced the following improvements to key liquidity metrics during the reported period:~~

~~For further discussion of the Company’s liquidity and capital resources, please refer to Item 2.~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~of this Form 10-Q for the period ended September 30, 2020.~~

The accompanying condensed consolidated financial statements include the accounts of MariMed Inc. and the following majority-owned ~~subsidiaries:~~

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts within the financial statements and disclosures thereof. Actual results could differ from these estimates or assumptions.

The Company considers all highly liquid investments with a maturity date of three months or less to be cash equivalents. The fair values of these investments approximate their carrying values.

The Company’s cash and cash equivalents are maintained with recognized financial institutions located in the United States. In the normal course of business, the Company may carry balances with certain financial institutions that exceed federally insured limits. The Company has not experienced losses on balances in excess of such limits and management believes the Company is not exposed to significant risks in that regard.

Accounts receivable consist of trade receivables and are carried at their estimated collectible amounts.

The Company provides credit to its clients in the form of payment terms. The Company limits its credit risk by performing credit evaluations of its clients and maintaining a reserve, if deemed necessary, for potential credit losses. Such evaluations include the review of a client’s outstanding balances with consideration towards such client’s historical collection experience, as well as prevailing economic and market conditions and other factors. Based on such evaluations, the Company maintained ~~an allowance for doubtful accounts~~a reserve of approximately $~~40.5~~41.4 million and $~~39.7~~40.0 million at September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. ~~Please~~For further discussion on receivable reserves, please refer to Note 1618 – Bad Debts ~~for further discussion on receivable reserves.~~and the Bankruptcy Claim section of Note 20 – Commitments and Contingencies.

Inventory is carried at the lower of cost or net realizable value, with the cost being determined on a first-in, first-out (FIFO) basis. The Company allocates a certain percentage of overhead cost to its manufactured inventory; such allocation is based on square footage and other industry-standard criteria. The Company reviews physical inventory for obsolescence and/or excess and will record a ~~reserve~~write-down if ~~necessary. As of the date of this report, no reserve was deemed~~ necessary.

Investments are comprised of equity ~~holding of~~holdings in public and private companies. These investments are recorded at fair value on the Company’s consolidated balance sheet, with changes to fair value included in income. Investments are evaluated for permanent impairment and are written down if such impairments are deemed to have occurred.

The Company recognizes revenue in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 606, Revenue from Contract with Customers, as amended by subsequently issued Accounting Standards Updates. This revenue standard requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to in exchange for those goods or services. The recognition of revenue is determined by performing the following consecutive steps:

Additionally, when another party is involved in providing goods or services to the Company’s clients, a determination is made as to who—the Company or the other party—is acting in the capacity as the principal in the sale transaction, and who is merely the agent arranging for goods or services to be provided by the other party.

The Company is typically considered the principal if it controls the specified good or service before such good or service is transferred to its client. The Company may also be deemed to be the principal even if it engages another party (an agent) to satisfy some of the performance obligations on its behalf, provided the Company (i) takes on certain responsibilities, obligations, and risks, (ii) possesses certain abilities and discretion, or (iii) other relevant indicators of the sale. If deemed an agent, the Company would not recognize revenue for the performance obligations it does not satisfy.

Property and equipment are stated at cost less accumulated depreciation, with depreciation recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term, if applicable. When assets are retired or disposed, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income. Repairs and maintenance are charged to expense in the period incurred.

The estimated useful lives of property and equipment are generally as follows: buildings and building improvements, ~~seven~~forty years to ~~thirty-nine~~ ~~years;~~; tenant improvements, the remaining duration of the related lease; furniture and fixtures, seven to tenyears; machinery and equipment, ~~five~~ten years to ~~ten~~ ~~years.~~. Land is not depreciated.

The Company’s property and equipment are individually reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable from the undiscounted future cash flows of such asset over the anticipated holding period. An impairment loss is measured by the excess of the asset’s carrying amount over its estimated fair value.

Impairment analyses are based on management’s current plans, asset holding periods, and currently available market information. If these criteria change, the Company’s evaluation of impairment losses may be different and could have a material impact to the consolidated financial statements.

For the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, based on the results of management’s impairment analyses, there were 0no impairment losses.

The consolidated financial statements reflect the Company’s adoption of ASC 842, Leases, as amended by subsequent accounting standards updates, utilizing the modified retrospective transition ~~approach which calls for applying the new standard to all of the Company’s leases effective January 1, 2019, which is the effective date of adoption.~~approach.

ASC 842 is intended to improve financial reporting of leasing transactions. The most prominent change from previous accounting guidance is the requirement to recognize right-of-use assets and lease liabilities on the consolidated balance sheet representing the rights and obligations created by operating leases that extend more than twelve months in which the Company is the lessee. The Company elected the package of practical expedients permitted under ASC 842. Accordingly, the Company accounted for its existing operating leases that commenced before the effective date as operating leases under the new guidance without reassessing (i) whether the contracts contain a lease, (ii) the classification of the leases, orand (iii) the accounting for indirect costs as defined in ASC 842.

The Company determines if an arrangement is a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Non-lease components within lease agreements are accounted for separately. Right-of-use assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term, utilizing the Company’s incremental borrowing rate. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company evaluates the recoverability of its fixed assets and other assets in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets. Impairment of long-lived assets is recognized when the net book value of such assets exceeds their expected cash flows, in which case the assets are written down to fair value, which is determined based on discounted future cash flows or appraised values.

The Company follows the provisions of ASC 820, Fair Value Measurement, to measure the fair value of its financial instruments, and ASC 825, Financial Instruments, for disclosures on the fair value of its financial instruments. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820 are:

The carrying amounts of the Company’s financial assets and liabilities, such as cash and accounts payable, approximate their fair values due to the short maturity of these instruments.

The fair value of option and warrant issuances are determined using the Black-Scholes pricing model and employing several inputs such as the expected life of instrument, the exercise price, the expected risk-free interest rate, the expected dividend yield, the value of the Company’s common stock on issuance date, and the expected volatility of such common stock. The following table summarizes the range of inputs used by the Company during the nine months ended September 30, ~~2020~~2021 and ~~2019.~~

Nine Months Ended September 30,

Nine Months Ended

September 30,

2020

2019

2021

2020

Life of instrument

2.7 to 4.3 years

2.3 to 3.0 years

3.0 to 5.0 years

2.7 to 4.3 years

Volatility factors

1.059 to 1.180

1.059 to 1.106

1.230 to 1.266

1.059 to 1.180

Risk-free interest rates

0.26% to 1.30%

1.42% to 2.28%

0.36% to 0.90%

0.26% to 1.30%

Dividend yield

The expected life of an instrument is calculated using the simplified method pursuant to Staff Accounting Bulletin Topic 14, Share-Based Payment, which allows for using the mid-point between the vesting date and expiration date. The volatility factors are based on the historical two-year movement of the Company’s common stock prior to an instrument’s issuance date. The risk-free interest rate is based on U.S. Treasury rates with maturity periods similar to the expected instruments life on the issuance date.

The Company amortizes the fair value of option and warrant issuances on a straight-line basis over the requisite service period of each instrument.

The Company accounts for extinguishment of liabilities in accordance with ASC 405-20, Extinguishments of Liabilities. When the conditions for extinguishment are met, the liabilities are written down to zero and a gain or loss is recognized.

The Company accounts for stock-based compensation using the fair value method as set forth in ASC 718, Compensation—Stock Compensation, which requires a public entity to measure the cost of employee services received in exchange for an equity award based on the fair value of the award on the grant date, with limited exceptions. Such value will be incurred as compensation expense over the period an employee is required to provide service in exchange for the award, usually the vesting period. No compensation cost is recognized for equity awards for which employees do not render the requisite service.

The Company ~~accounts~~uses the asset and liability method to account for income taxes in accordance with ASC 740, Income Taxes. ~~Deferred~~Under this method, deferred income tax assets and liabilities are ~~determined based upon~~recorded for the future tax consequences of differences between the tax basis and financial reporting ~~and tax~~ basis of assets and liabilities, ~~and are~~ measured using ~~the~~ enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. The Company did not take any uncertain tax positions and had 0 adjustments to unrecognized income tax liabilities or benefits for the nine months ended September 30, ~~2020 and 2019.~~2021 or 2020.

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

In accordance with ASC 850, the Company’s financial statements include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business, as well as transactions that are eliminated in the preparation of financial statements.

The Company reports comprehensive income and its components following guidance set forth by ASC 220, Comprehensive Income, which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements. There were no items of comprehensive income applicable to the Company during the period covered in the financial statements.

Earnings per common share is computed pursuant to ASC 260, Earnings Per Share. Basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income by the sum of the weighted average number of shares of common stock outstanding plus the weighted average number of potentially dilutive securities during the period.

AtAs of September 30, ~~2020~~2021 and ~~2019,~~2020, there were~~24,860,857~~ ~~and~~ ~~16,815,107, respectively, of~~ potentially dilutive securities ~~in the form~~convertible into shares of ~~outstanding~~common stock comprised of (i) stock options ~~and warrants. Also as of such dates, there were (i) $4.2~~ ~~million and $11.1~~ ~~million, respectively, of outstanding~~– convertible ~~debentures payable, (ii)~~into ~~4,908,333~~26,054,171 and 07,125,750 shares, respectively, of(ii) warrants – convertible into 27,802,734 and 17,735,107 shares, respectively, (iii) Series B ~~convertible~~ preferred stock ~~outstanding, and (iii) approximately $5.2~~ ~~million and $350,000, respectively, of outstanding convertible promissory notes. All of these potentially dilutive securities are~~– convertible into ~~common~~4,908,333 shares in both periods, (iv) Series C preferred stock ~~based on either (i) a predetermined price, subject to adjustment, or (ii) the market value of common stock on or about the future conversion date.~~– convertible into 31,081,080 and zero shares, respectively, (v) debentures payable – convertible into 0 and 28,233,972 shares, respectively, and (vi) promissory notes – convertible into 2,500,268 and 17,503,282 shares, respectively.

For the three and nine months ended September 30, ~~2020, all such~~2021, the aforementioned potentially dilutive securities ~~were convertible into approximately~~ ~~64.6~~ ~~million net shares of common stock, which were included in~~increased the number of weighted average common shares outstanding on a diluted basis by 49,479,941 shares and45,863,932 shares, respectively. For the three months ended September 30, 2020, the aforementioned potentially dilutive securities increased the number of weighted average common shares outstanding on a diluted basis by 64,556,628 shares. Such shares were reflected in the calculation of diluted net income per share for ~~this period as shown in the statement of operations.~~such periods. For the nine months ended September 30, 2020, ~~and for the three and nine months ended Septembers 30, 2019,~~ the potentially dilutive securities had an anti-dilutive effect on earnings per share, and ~~in accordance with~~pursuant to ASC 260, were excluded from the diluted net income per share calculations, resulting in identical basic and fully diluted net income per share for ~~these periods.~~that period.

The Company follows ASC 450, Contingencies, which requires the Company to assess the likelihood that a loss will be incurred from the occurrence or non-occurrence of one or more future events. Such assessment inherently involves an exercise of judgment. In assessing possible loss contingencies from legal proceedings or unasserted claims, the Company evaluates the perceived merits of such proceedings or claims, and of the relief sought or expected to be sought.

If the assessment of a contingency indicates that it is probable that a material loss will be incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

While not assured, management does not believe, based upon information available at this time, that a loss contingency will have material adverse effect on the Company’s financial position, results of operations or cash flows.

Convertible instruments that are not bifurcated as a derivative pursuant to ASC 815, Derivatives and Hedging, and not accounted for as a separate equity component under the cash conversion guidance are evaluated to determine whether their conversion prices create an embedded beneficial conversion feature at inception, or may become beneficial in the future due to potential adjustments.

A beneficial conversion feature is a nondetachable conversion feature that is “in-the-money” at the commitment date. The in-the-money portion, also known as the intrinsic value, ~~of the option,~~ is recorded in equity, with an offsetting discount to the carrying amount of convertible debt to which it is attached. The discount is amortized to interest expense over the life of the debt with adjustments to amortization upon full or partial conversions of the debt.

The Company is subject to risks common to companies operating within the legal and medical marijuana industries, including, but not limited to, federal laws, government regulations and jurisdictional laws.

Noncontrolling interests represent third-party minority ownership of the Company’s consolidated subsidiaries. Net income attributable to noncontrolling interests is shown in the consolidated statements of operations; and the value of net assets owned by noncontrolling interests are presented as a component of equity within the balance sheets.

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements, and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations.

~~Effective October 1, 2019, the Illinois Department of Financial and Professional Regulation approved the Company’s acquisition of (i)100~~% of the ownership interests of KPG of Anna LLC and KPG of Harrisburg LLC, the Company’s two cannabis-licensed clients that operate medical marijuana dispensaries in the state of Illinois (both entities collectively, the “KPGs”), and (ii) the 40% ownership interests not already owned by the Company of Mari Holdings IL LLC, the Company’s subsidiary which owns the real estate in which the KPGs’ dispensaries are located (“Mari-IL”). On such date, ~~1,000,000~~ ~~shares of the Company’s common stock, representing the entire purchase price, were issued to the sellers of the KPGs and Mari-IL, and these entities became wholly-owned subsidiaries of the Company.~~

The acquisition was accounted for in accordance with ASC 805. The following table summarizes the allocation of the purchase price to the fair value of the assets acquired and liabilities assumed on the acquisition date:NOTE 3 – ACQUISITIONS

~~Based on an impairment analysis performed shortly before the filing date of this report, the Company determined the intangibles of approximately $2.1~~ ~~million arising from this transaction were not impaired.~~

In ~~August~~ 2019, the Company entered into a purchase agreement to acquire 100% of the ownership interests of The Harvest Foundation LLC (“Harvest”), the Company’s cannabis-licensed client in the state of Nevada. The acquisition is conditioned upon legislative approval of the transaction. ~~At this time,~~During 2019, the state ~~has~~ paused the processing of cannabis license transfers, without indicating when it will resume. Upon the resumption of these activities and the ensuing approval by the state, the Company expects to consummate this ~~agreement will be consummated and~~transaction whereby the operations of Harvest will be consolidated into the Company’s financial statements.

The purchase price is comprised of the issuance of (i) 1,000,000 shares of the Company’s common stock, in the aggregate, to two owners of Harvest, which as a good faith deposit, were issued upon execution of the purchase agreement, (ii) $1.2 million of the Company’s common stock at closing, based on the closing price of the common stock on the day prior to legislative approval of the transaction, and (iii) warrants to purchase 400,000 shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on the day prior to legislative approval of the transaction. ~~These~~The issued shares were recorded at par value. Such shares are restricted and will be returned to the Company in the event the transaction does not ~~close by a date certain. As the transaction has not been consummated, the issued shares were recorded at par value.~~close.

In ~~December 2018,~~ the ~~Company entered into a memorandum~~fall of ~~understanding (the “MOU”) to acquire~~2016, the members of Kind Therapeutics USA Inc. ~~(“Kind”)~~, ~~its~~the Company’s cannabis-licensed client in Maryland that holds licenses for the cultivation, production, and dispensing of medical ~~cannabis.~~cannabis (“Kind”), and the Company agreed to a partnership/joint venture whereby Kind would be owned 70% by the Company and 30% by the members of Kind, subject to approval by the Maryland Medical Cannabis Commission (“MMCC”). Prior to finalizing the documents confirming the partnership/joint venture, in December 2018, the Company and the members of Kind negotiated and entered into a memorandum of understanding (“MOU”) for the Company to acquire 100% of the membership interests of Kind. The MOU provides for a total purchase price of $6.3million in cash, 2,500,000shares of the Company’s common stock, and other consideration. The acquisition is subject to ~~the~~ approval by the ~~Maryland Medical Cannabis Commission,~~MMCC, which ~~approval can~~will be applied for ~~starting in March 2021.~~following the resolution of the litigation with Kind discussed below.

Also in December 2018, (i) MariMed Advisors ~~Inc,~~Inc., the Company’s wholly owned subsidiary, and Kind entered into a management services agreement ~~pursuant~~ to ~~which the Company provides~~provide Kind with comprehensive management services in connection with the business and operations of Kind (“the MSA”), and (ii) Mari Holdings MD LLC, the Company’s majority-owned subsidiary, entered into a ~~20-year~~20-year lease with Kind for ~~its~~Kind’s utilization of the Company’s 180,000 square foot cultivation and production facility in Hagerstown, ~~MD.~~MD (“the Lease”), which the Company purchased, designed, and developed for occupancy and use by Kind commencing in late 2017. Additionally, in October 2019, Mari Holdings MD LLC purchased a 9,000 square foot building in Anne Arundel County, MD, which is currently under construction, for the development of a dispensary which would be leased to Kind.

~~The sellers~~In 2019, the members of Kind ~~have attempted~~sought to renegotiate the terms of the ~~MOU. Even though~~MOU and have subsequently sought to renege on both the ~~MOU contains all~~original partnership/joint venture and the ~~definitive material terms with respect to the acquisition transaction and confirms the management and lease agreements, the selling parties now allege that the MOU is not an enforceable agreement.~~MOU. The Company engaged with ~~the sellers~~Kind in good faith in an attempt to reach updated terms acceptable to both parties, however ~~the sellers~~Kind failed to reciprocate in good faith, resulting in an impasse. Incrementally, both parties through counsel further sought to resolve the impasse, ~~and~~however such initiative resulted in both parties commencing legal ~~proceedings which are pending~~proceedings. As a result, the consummation of this acquisition has been delayed and may not ultimately be completed. The litigation is further discussed in ~~the Circuit Court for Washington County, Maryland. For further information, see~~ Note 1820 – Commitments and Contingencies~~and Part II, Item 1.~~ ~~Legal Proceedings~~ ~~in this report.~~.

In ~~May~~ 2019, the Company ~~entered into~~acquired a ~~purchase agreement to acquire~~70% ownership interest in MediTaurus LLC (“MediTaurus”), a company formed ~~and owned~~ by Jokubas Ziburkas PhD, a neuroscientist and leading authority on cannabidiol (“CBD”) and the endocannabinoid system, in exchange for $2.8 million of cash and stock. The Company currently sells CBD ~~and its interactions with the brain and endocannabinoid system.~~products developed by MediTaurus ~~currently operates in the United States and Europe and has developed proprietary CBD formulations sold~~ under its Florance™ ~~brand.~~brand.

~~Pursuant to the purchase agreement,~~In September 2021, the Company acquired the remaining 7030% ownership interest of MediTaurus ~~on June 1, 2019. The purchase price was $~~in exchange for ~~2.8~~ ~~million, comprised of cash payments totaling $720,000~~ ~~and~~ ~~520,000~~100,000 shares of the Company’s common stock, valued at approximately $~~2,080,000~~94,000., and $10,000 in cash. The ~~parties are currently in negotiations regarding the Company’s acquisition of the remaining~~ 30~~% of MediTaurus.~~

~~The acquisition was accounted for in accordance with ASC 10. The following table summarizes the allocation, adjusted in September 2019, of the purchase price to the fair~~carrying value of the ~~assets acquired and liabilities assumed on the acquisition date:~~

~~Based on a valuation of MediTaurus in late 2019, the goodwill on the transaction was adjusted to approximately $2.7~~ ~~million, which was written off due to the impact of the COVID-19 pandemic on MediTaurus’ business.~~

~~In July 2018, the Company entered into a purchase agreement to acquire~~ ~~100~~% of the ownership interests of AgriMed Industries of PA LLC (“AgriMed”), an entity that holds a license from the state of Pennsylvania for the cultivation of cannabis. The purchase price was comprised of $~~8.0~~ million, payable in stock and cash, and the assumption of certain liabilities of AgriMed. In February 2019, the Company commenced legal proceedings against AgriMed seeking specific performance of the purchase agreement.

~~In May 2019, the dispute between the parties was resolved through the cash payment to the Company of $3.1~~ ~~million and other good and valuable consideration, in exchange for the Company relinquishing its rights under the purchase agreement and releasing its claims against AgriMed. The net amount~~noncontrolling interest of approximately $~~2,949,000~~975,000 was eliminated, and since there was no change in control of MediTaurus from this transaction, the resulting gain on bargain purchase was recognized in Additional Paid-In Capital on the September 30, 2021 balance sheet. The shares and cash were issued and paid in November 2021, and were included in Common Stock Subscribed But Not Issued and Accrued Expenses, ~~representing~~respectively, on the ~~cash payment less legal~~September 30, 2021 balance sheet. As part of this transaction, the initial purchase agreement was amended whereby any and all future license fees and ~~write-offs of assets and supplies, was recorded in~~ ~~Other Non-Operating Income~~ ~~in the Company’s consolidated statement of operations for the year ended December 31, 2019.~~payments to MediTaurus were eliminated.

At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company’s investments were comprised of the following:

In ~~May 2019, the Company issued~~ ~~500,000~~ ~~shares of its common stock, valued at $1.59~~ ~~million on the date of issuance, to purchase an~~ ~~8.95% interest in~~December 2020, Terrace Inc. ~~(“Terrace”)~~, a Canadian cannabis entity ~~that develops~~in which the Company had an ownership interest of 8.95% (“Terrace”), was acquired by Flowr Corp. (TSX.V: FLWR; OTC: FLWPF), a Toronto-headquartered cannabis company with operations in Canada, Europe, and ~~acquires international cannabis assets. The Company has no board representation, nor does it have~~Australia (“Flowr”). Under the ~~ability to exert operational or financial control over~~terms of the ~~entity.~~transaction, each shareholder of Terrace received 0.4973 of a share in Flowr for each Terrace share held.

~~In November 2019, the common stock of Terrace commenced public trading on the Toronto Stock Venture Exchange. In accordance with ASC 321,~~ ~~Investments – Equity Securities~~~~, this~~This investment is carried at fair ~~value, with changes to~~value. During the nine months ended September 30, 2021 and 2020, the decrease in fair value ~~recognized in net income. Prior to Terrace becoming publicly traded, the Company had elected the measurement alternative to value this equity investment without a readily determinable fair value.~~

~~At September 30, 2020, the carrying amount~~ of this investment ~~approximated $1,003,000, based on its publicly traded stock price on such date, which required the Company to record a charge to net income~~ of approximately $~~447,000~~ 937,000 and $446,000~~for the nine months then ended that is~~, respectively, was reflected ~~under~~in Change In Fair Value Of Investmentson the statement of operations.

In August 2018, the Company invested $300,000~~, of a total contracted cash investment of $500,000~~, and issued 378,259 shares of its common stock, valued at approximately $915,000, in exchange for a 23% ownership in MembersRSVP LLC (“MRSVP”), an entity that has developed acannabis-specific customer relationship management ~~and marketing platform,~~software, branded under the name ~~Sprout, that is designed for and licensed to companies in the cannabis industry.~~Sprout.

~~The investment is accounted under the equity method.~~ During the nine months ended September 30, 2020, ~~and 2019,~~ the ~~Company recorded earnings of approximately $19,000~~ ~~and a charge of approximately $105,000, respectively, based~~investment was accounted for under the equity method. Based on the Company’s equity in MRSVP’s net ~~income and losses~~loss during such ~~periods. Since the inception of the investment,~~period, the Company ~~has~~ recorded ~~cumulative equity in net losses~~earnings for the three months and nine month ended September 30, 2020 of approximately $~~130,000~~52,000 and $19,000, ~~reducing~~respectively. Such earnings comprised the ~~carrying value~~balance of Equity in Earnings of Investments on the ~~investment to approximately $1,086,000~~ ~~at September 30, 2020.~~

In January ~~2019,~~2021, the ~~entire principal~~Company and ~~accrued~~MRSVP entered into an agreement whereby the Company assigned and transferred membership interests comprising an 11% ownership in MRSVP in exchange for a release from all further obligation by the Company to make future investments or payments and certain other non-monetary consideration. Following the interest ~~balance of a note receivable from Chooze Corp. of approximately $258,000~~ ~~was converted into a~~ ~~2.7% equity~~transfer, the Company’s ownership interest in ~~Chooze. In accordance with ASC 321, the Company elected the measurement alternative~~MRSVP was reduced to ~~value this equity investment without~~12% on a ~~readily determinable fair value. Accordingly, the investment was carried at its cost until June 2020 when the investment was~~ fully ~~reserved due to the Company’s determination that the investment was impaired. This reserve of approximately $258,000~~ ~~is reflected under~~ ~~Change In Fair Value Of Investments~~ ~~on the statement of operations.~~diluted basis.

~~During 2018, in a series~~As part of ~~transactions,~~the agreement, the Company ~~purchased $~~30 ~~million~~relinquished its right to appoint a member to the board of ~~subordinated secured convertible debentures (the “GC Debentures”)~~MRSVP. In light of ~~GenCanna. In February 2019,~~ the Company ~~converted~~no longer having the ~~GC Debentures, plus unpaid accrued interest through the conversion date of approximately $229,000, into common stock of GenCanna equal~~ability to a ~~33.5% ownership interest in GenCanna on a fully diluted basis. Concurrent with the conversion, the Company’s CEO was appointed to GenCanna’s board and~~exercise significant influence over MRSVP, the Company ~~was granted certain rights, including the rights of inspection, financial information, and participation in future security offerings of GenCanna. At conversion, the Company commenced~~discontinued accounting for this investment under the equity ~~method.~~method as of January 1, 2021. The Company’s share of MRSVP’s net losses recorded under the equity method prior to January 1, 2020 of approximately $50,000 remained part of the carrying amount of the investment.

In ~~late January 2020,~~September 2021, MRSVP sold substantially all of its assets pursuant to an ~~involuntary bankruptcy proceeding under Chapter 11 was filed against GenCanna USA, GenCanna’s wholly-owned operating subsidiary, with~~asset purchase agreement dated as of August 31, 2021, and entered into several related agreements. In furtherance of the ~~U.S. Bankruptcy Court in~~transaction, the ~~Eastern District~~Company received cash proceeds of ~~Kentucky (the “Bankruptcy Court”). In~~$1,475,000, representing the ~~months leading up~~Company’s pro rata share of the cash consideration received by MRSVP upon the closing of the transaction. As an ongoing member of MRSVP, the Company will receive its pro rata share of any additional consideration received by MRSVP pursuant to the ~~filing, GenCanna had faced several challenges including defaults under its senior credit facility with MGG Investment Group LP (“MGG”), a fire at its main processing~~asset purchase agreement, which may include securities or other forms of non-cash or in-kind consideration and ~~lab facility, the domestic decline of CBD selling prices,~~holdback amounts, if and ~~the contraction of the cannabis capital markets. On February 6, 2020, GenCanna USA, under pressure from certain of its creditors~~when it is received and MGG, agreed to convert the involuntary bankruptcy proceeding into a voluntary Chapter 11 proceeding. In addition, GenCanna and GenCanna USA’s subsidiary, Hemp Kentucky LLC (collectively with GenCanna and GenCanna USA, the “GenCanna Debtors”), filed voluntary petitions under Chapter 11 in the Bankruptcy Court. As a result, the Company recorded a charge to net income of approximately $~~30.2~~ ~~million in December 2019, which reduced the carrying value of this investment to~~ 0.distributed by MRSVP.

On February 18, 2020, the GenCanna Debtors sought permission from the Bankruptcy Court to sell all or substantially all of their assets. After the entry of various orders to establish the bidding procedures and criteria for such sale, the GenCanna Debtors received only four proposals (including a credit bid from MGG) for the purchase of the GenCanna Debtors’ assets and a single proposal for a plan of reorganization which was submitted by the Company.

On May 19, 2020, after an abbreviated solicitation/bid/sale process, the Bankruptcy Court, over numerous objections by creditors and shareholders of the GenCanna Debtors which included the Company, entered an order authorizing the sale of all or substantially all of the assets of the GenCanna Debtors to MGG for its credit bid in the amount of $~~73.5~~ ~~million and cash in the amount of $3.5~~ ~~million.~~

Based on recent filings with the Bankruptcy Court, the GenCanna Debtors are proposing to file a liquidating plan of reorganization to collect various prepetition payments and commercial claims against third parties, liquidate the remaining assets of the GenCanna Debtors, and make payments to creditors. The Company and the unsecured creditors committee are exploring options, including litigation against MGG for lender liability, equitable subordination, and return of preference. In connection with this liquidation process, the Company has filed its proofs of claim for the $~~33.2~~ ~~million of hemp seeds sold to GenCanna, which transaction is further discussed in Note 17 –~~ ~~Related Party Transactions~~.

~~In December 2018, the Company purchased~~ ~~2,500,000~~ ~~shares of common stock of Iconic Ventures Inc. (“Iconic”), which equated to an ownership interest in Iconic of approximately~~ ~~10%, for an aggregate cash payment of $500,000~~. Iconic has developed DabTabs™, a unique solution for cannabinoid vaporization. The Company has no board representation, nor does it have the ability to exert operational or financial control over the entity. In 2019, the Company wrote off the investment after an impairment review that considered the viability of the entity in light of the current economic climate.

~~In July 2019, the Company entered into a licensing agreement for the exclusive manufacturing and distribution in several eastern U.S. states of the Binske~~^® portfolio of products, a brand known for utilizing best-in-class proprietary strains and craft ingredients in its edibles, concentrates, vaporizers, and topicals. In consideration for the license and other rights, the Company agreed to pay a royalty of ~~10.0% to~~ ~~12.5% of gross revenue, as defined, derived from the sale of Binske~~^®~~products, subject to an annual minimum royalty.~~ No ~~gross revenue was generated as~~As of September 30, ~~2020.~~2021, the Company had received the cash consideration, and accordingly, reduced the investment balance to zero and recorded a gain of approximately $309,000 which was reflected in Other non-operating expenses on the statement of operations. The Company had not received any of the non-cash consideration as of the report date.

The Company is the lessor under ~~several~~ operating leases which contain rent holidays, escalating rents over time, options to renew, requirements to pay property taxes, insurance and/or maintenance costs, and contingent rental payments based on a percentage of monthly tenant revenues. The Company is not the lessor under any finance leases.

The Company recognizes fixed rental receipts from such lease agreements on a straight-line basis over the expected lease term. Differences between amounts received and amounts recognized are recorded under Deferred Rents Receivable on the balance sheet. Contingent rentals are recognized only after tenants’ revenues are finalized and if such revenues exceed certain minimum levels.

~~During the reporting periods, the~~The Company ~~leased to third parties~~leases the following owned properties:

~~During the reporting periods, the~~The Company ~~subleased to a third party~~subleases the following ~~property:~~properties:

As of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, cumulative fixed rental receipts under such leases approximated $~~12.8~~17.5 million and $~~9.5~~13.9 million, respectively, compared to revenue recognized on a straight-line basis of approximately $~~14.8~~19.2 million and $~~11.3~~15.8 ~~million.~~million, respectively. Accordingly, the deferred rents receivable ~~balances at September 30, 2020 and December 31, 2019~~balance approximated $~~2.0~~1.7 million and $~~1.8~~1.9 million at September 30, 2021 and December 31, 2020, respectively.

Future minimum rental receipts for non-cancelable leases and subleases as of September 30, ~~2020~~2021 were:

SCHEDULE OF FUTURE MINIMUM RENTAL RECEIPTS FOR NON-CANCELABLE LEASES AND SUBLEASES

2020	$	1,130,989

2021		4,667,497	$	1,207,136
2022		4,590,656		4,740,130
2023		4,292,769		4,446,410
2024		4,348,027		4,506,585
2025				4,574,023
Thereafter		43,995,612		39,591,553
Total	$	63,025,550	$	59,065,837

At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, notes receivable, ~~were comprised~~including accrued interest, consisted of the following:

	September 30, 2020		December 31, 2019		September 30, 2021		December 31, 2020
First State Compassion Center	$	484,240	$	527,261	$	420,267	$	468,985
Healer LLC		885,871		846,985		892,637		899,226
High Fidelity Inc.		254,879		252,873		-		254,919
Maryland Health & Wellness Center Inc.		-		323,526
Atalo Holdings Inc.		-		-
Total notes receivable		1,624,990		1,950,645		1,312,904		1,623,130
Notes receivable, current portion		540,319		311,149		124,426		658,122
Notes receivable, less current portion	$	1,084,671	$	1,639,496	$	1,188,478	$	965,008

The ~~Company loaned approximately $700,000~~ toCompany’s cannabis-licensed client in Delaware, First State Compassion Center, ~~its Delaware cannabis-licensee client, during the period from October 2015 to April 2016. In May 2016, this client~~ issued a 10-year promissory note ~~as subsequently amended,~~ to the Company in May 2016 in the amount of $700,000 bearing interest at a rate of 12.5% per ~~annum.~~annum, as amended. The monthly payments of approximately $~~10,100~~10,000 will continue through April 2026, at which time the note will ~~become due.~~be fully paid down. At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the current portion of this note ~~was approximately~~approximated $~~64,000~~72,000 and $~~58,000~~64,000, respectively, and iswas included in Notes Receivable, Current Portion on the respective balance sheets.

In 2018 ~~to June~~and 2019, the Company loaned an aggregate of $800,000to Healer LLC, ~~(“Healer”),~~ an entity that provides cannabis education, dosage programs, and products developed by Dr. Dustin Sulak, an integrative medicine physician and nationally renowned cannabis ~~practitioner. The loans~~practitioner (“Healer”). Healer issued promissory notes to the Company for the aggregate amount loaned that bear interest at a rate of 6% per annum, with principal and interest payable on ~~the~~ maturity dates ~~which are~~ three years from the respective loan ~~dates~~dates.

In March 2021, the Company was issued a revised promissory note from Healer in the principal amount of approximately $894,000 representing the previous loans extended to Healer by the Company plus accrued interest through the revised promissory note issuance date. The revised promissory note bears interest at a rate of 6% per annum and requires quarterly payments of interest from April 2021 through the maturity date in April 2026.

Additionally, the Company has the right to offset any licensing fees owed to Healer by the Company in the event Healer fails to make any payment when due. In March 2021, the Company offset approximately $28,000 of licensing fees payable to Healer against the principal balance of the revised promissory note, reducing the principal amount to approximately $866,000.

At September 30, 2021 and December 31, 2020, the ~~current portion~~total amount of ~~this note~~principal and accrued interest due under the aforementioned promissory notes approximated $~~221,000~~893,000 and $899,000, respectively, of which approximately $~~. No portion~~52,000 and $337,000, respectively, was ~~current at December 31, 2019.~~current.

In August 2019, the Company loaned $250,000 to High Fidelity Inc., ~~a company~~an entity that owns and operates two seed-to sale medical marijuana facilities in the state of Vermont and produces its own line of CBD products. ~~Prior to the note’s maturity in August 2020, the parties agreed to continue the note on a month-to-month basis, with interest-only monthly payments ongoing at the rate of~~ 10~~% per annum.~~

~~In January 2019, the Company provided Maryland Health & Wellness Center Inc. (“MHWC”), an entity that has been pre-approved by the state of Maryland for a cannabis dispensing license, with a $300,000~~ ~~construction~~The loan ~~bearing~~bore interest at a rate of 810.0% per annum. In June 2020, MHWC repaid the principal and accrued interest thereon, at which time the parties agreed to terminate their business relationship and release each other from all other previously executed agreements.

~~From May 2019 to July 2019, the Company extended loans aggregating $980,000~~ to Atalo Holdings Inc. (“Atalo”), an agriculture and biotechnology firm specializing in research, development, and production of industrial hemp and hemp-derived CBD products. The loans initially bore interest at 6% per annum, and ~~matured~~was repaid in April 2020. The Company wrote off the entire carrying value of the Atalo note receivable balance as of December 2019, based upon the expectation that Atalo would be critically impacted by the COVID-19 pandemic. In 2020, Atalo filed for bankruptcy.full in August 2021.

At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, inventory was comprised of ~~approximately (i) $3.1~~ ~~million and $395,000, respectively, of plants and other raw materials, (ii) $188,000~~ ~~and $226,000, respectively, of CBD isolate and hemp extract, and (iii) $3.5~~ ~~million and $599,000~~ ~~of work-in-process and finished cannabis and CBD products.~~the following:

At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, property and equipment consisted of the following:

	September 30, 2020			December 31, 2019			September 30, 2021			December 31, 2020
Land	$	3,988,810		$	3,887,710		$	4,449,810		$	3,988,810
Buildings and building improvements		27,334,283			27,063,235			34,343,369			29,309,856
Tenant improvements		8,607,282			7,762,991			9,295,691			8,844,974
Furniture and fixtures		555,766			299,645			1,868,571			619,880
Machinery and equipment		4,490,186			4,086,691			6,983,256			4,620,924
Construction in progress		4,977,181			2,827,940			8,938,997			3,140,807
		49,953,508			45,928,212			65,879,694			50,525,251
Less: accumulated depreciation		(4,445,931	)		(3,135,843	)		(6,363,525	)		(4,888,722	)
Property and equipment, net	$	45,507,577		$	42,792,369		$	59,516,169		$	45,636,529

During the nine months ended September 30, ~~2020~~2021 and ~~2019,~~December 31, 2020, additions to property and equipment ~~were approximately~~approximated $~~4.1~~15,354,000 ~~million~~ and $~~6.7~~1,876,000 ~~million,~~, respectively.

~~Additions during~~The 2021 additions were primarily comprised of (i) the ~~nine months ended September 30,~~development of the facility in Metropolis, IL, and (ii) purchases of building improvements, machinery, and equipment at the facilities in Hagerstown, MD and New Bedford, MA. The 2020 additions consisted primarily of (i) the commencement of construction in Mt. Vernon, IL, and (ii) machinery and equipment purchases for facilities in Massachusetts, Maryland, Illinois, and Delaware. ~~Additions during the nine months ended~~

The construction in progress balances of approximately $8.9 million and $3.1 million at September 30, ~~2019~~2021 and December 31, 2020, respectively, consisted ~~primarily~~ of ~~(i)~~ the commencement of construction of properties in Milford, DE ~~(ii) the continued buildout of properties in Maryland~~ and ~~Massachusetts, and (iii) improvements to the Wilmington, DE and Las Vegas, NV properties.~~

~~During the nine months ended September 30, 2020, the Company disposed of an asset with a cost of approximately $91,000~~ ~~and accumulated depreciation through the disposal date of approximately $6,000. The loss on disposal of approximately $85,000~~ ~~is reflected in~~ ~~Other Non-Operating Expenses~~ ~~in the statement of operations at September 30, 2020. There were~~ 0 ~~disposals in 2019.~~Annapolis, MD.

Depreciation expense for the nine months ended September 30, ~~2020~~2021 and ~~2019~~2020 approximated $~~1,341,000~~1,499,000 and $~~698,000~~1,341,000, respectively.

At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, intangible assets were comprised of (i) the carrying value of cannabis license fees, and (ii) goodwill arising from the Company’s acquisitions.

The Company’s cannabis licenses are issued from the states of Illinois and Massachusetts and require the payment of annual fees. These fees, comprised of a fixed component and a variable component based on the level of operations, are capitalized and amortized over the respective twelve-month periods. At September 30, 2021 and December 31, 2020, the carrying value of these cannabis licenses approximated $281,000 and $161,000, respectively.

The goodwill associated with acquisitions is reviewed on a quarterly basis for impairment. Based on this review and other factors, the goodwill of approximately $2.1 million at September 30, 2021 and December 31, 2020 was deemed to be unimpaired.

At September 30, 2021 and December 31, 2020, mortgage balances, including accrued ~~but unpaid~~ interest, were comprised of the following:

In November 2017, the Company entered into a 10-year mortgage agreement with Bank of New England in the amount of $4,895,000~~(the~~ (the “Initial Mortgage”) for the purchase of a 138,000square foot industrial property in New Bedford, ~~Massachusetts,~~MA, within which the Company has built a 70,000square foot cannabis cultivation and processing facility. Pursuant to the Initial Mortgage, the Company made monthly payments of (i) interest-only from the mortgage date through May 2019 at a rate equal to the prime rate plus 2%, with a floor of 6.25% per annum, and (ii) principal and interest payments from May 2019 to July 2020 at a rate equal to the prime rate on May 2, 2019 plus 2%, with a floor of 6.25% per annum. In July 2020, at which time the Initial Mortgage had a remaining principal balance of approximately $4.8million, the parties consummated an amended and restated mortgage agreement, secured by the Company’s properties in New Bedford and Middleboro in the amount of $13.0million bearing interest at a rate of 6.5% per annum that matures in August 2025~~(the~~ (the “Refinanced Mortgage”). Proceeds from the Refinanced Mortgage were used to pay down the Initial Mortgage and approximately $7.2million of promissory notes as further described below. ~~The~~At September 30, 2021 and December 31, 2020, the outstanding principal balance of the Refinanced Mortgage approximated $~~12.9~~ 12.6million ~~on September 30, 2020,~~and $12.8 million, respectively, of which approximately $~~330,000~~ 352,000~~was current. The outstanding principal balance of the Initial Mortgage approximated~~ and $~~4.8~~ 335,000~~million on December 31, 2019, of which approximately $94,000~~ , respectively, was current.

The Company maintains another mortgage with Bank of New England for the 2016 purchase of a 45,070square foot building in Wilmington, ~~Delaware~~DE which was developed into a cannabis seed-to-sale facility and is currently leased to the Company’s cannabis-licensed client in that state. The mortgage matures in 2031with monthly principal and interest payments at a rate of 5.25% per annum through September 2021, and thereafter the rate adjusting every five years to the then prime rate plus 1.5% with a floor of 5.25% per annum. At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the outstanding principal balance on this mortgage ~~was approximately~~approximated $~~1,603,000~~ 1.5 million and $~~1,682,000~~1.6, million, respectively, of which approximately $~~112,000~~ 118,000and $~~105,000~~114,000, respectively, was current.

In May 2016, the Company entered into a mortgage agreement with DuQuoin State Bank (“DSB”) for the purchase of ~~two~~ properties in Anna, IL and Harrisburg, IL which the Company developed into two 3,400square foot free-standing retail ~~dispensaries in Illinois.~~dispensaries. On May 5^thof each year, this mortgage is due to be repaid unless it is renewed for another year at a rate determined by DSB’s executive committee. The mortgage was renewed in May ~~2020~~2021 at a rate of 6.75% per annum. At September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the outstanding principal balance on this mortgage ~~was approximately~~approximated $~~822,000~~ 793,000and $~~829,000~~ 815,000respectively, of which approximately $~~31,000~~ 32,000and $~~24,000~~31,000, respectively, was current.

In July 2021, the Company purchased the land and building in which it operates its cannabis dispensary in Metropolis, IL. The purchase price consisted of 750,000 shares of the Company’s common stock, which was valued at $705,000 on the date of the transaction, and payoff of the seller’s remaining mortgage of approximately $1.6 million. In connection with this purchase, the Company entered into another mortgage agreement with DSB in the amount of $2.7 million that matures in July 2041 and initially bears interest at a rate of 6.25% per annum which is adjusted each year based on a certain interest rate index plus a margin. As part of this transaction, the seller was provided with a 30% ownership interest in Mari Holdings Metropolis LLC (“Metro”), the Company’s subsidiary that owns the property and related mortgage obligation, reducing the Company’s ownership interest in Metro to 70%. At September 30, 2021, the outstanding principal balance on this mortgage approximated $2.7 million, of which approximately $71,000 was current.

In February 2020, the Company entered into a mortgage agreement with South Porte Bank for the purchase and development of a property in Mt. Vernon, IL. Pursuant to the amended mortgage agreement, the ~~Company made interest-only~~mortgage shall be repaid in monthly ~~payments at a rate~~installments of principal and interest of approximately $~~5.5~~6,000~~% per annum~~ which began in August 2021 and continues through its ~~initial~~ maturity ~~date~~ in ~~August 2020. At that~~June 2022, at which time ~~the parties amended the mortgage agreement to extend~~ ~~the maturity date through November 2020,~~all remaining principal, interest and ~~requiring continuing monthly interest-only payments at~~ ~~5.5% per annum.~~fees shall be due.

~~In February 2020, pursuant to an exchange agreement as further described in Note 11 –~~ ~~Mezzanine Equity~~,Issued by the Company ~~issued two promissory notes in the aggregate principal amount of approximately $4.4~~ ~~million, bearing interest at~~ ~~16.5% per annum~~ and ~~maturing in August 2021~~its MariMed Hemp Inc. Subsidiary~~(the “$4.4M Notes”), in exchange for a loan in the same amount.~~ ~~The Company has the right to extend the maturity date through February 2022 upon payment of an extension fee equal to 2.5% of the principal amount of the loan~~. ~~As of September 30, 2020,~~ no ~~principal payments were made on the $4.4M Notes and accrued interest through such date of approximately $439,000~~ ~~was paid.~~

In June 2019, the Company and MariMed Hemp Inc., its wholly-owned subsidiary (“MMH”), issued a secured promissory note in the principal amount of $10.0million (the “$10M Note”) to an unaffiliated party (the “Noteholder”)~~. The proceeds from the $10M Note were used to finance a portion of the purchases of hemp seed inventory that was sold to GenCanna (the “Seed Transactions”) as further discussed in Note 17 –~~ ~~Related Party Transactions~~. The $10M Note provided for the repayment of principal plus a payment of $1.5million (the “$1.5M Payment”) on the maturity date of January 31, 2020. Such payment was charged to interest expense over the life of the $10M Note.

As part of the $10M Note transaction, the Company issued three-year warrants to purchase up to 375,000 shares of common stock at an exercise price of $4.50 per share to the Noteholder. The fair value of these warrants on the issuance date of approximately $601,000 was recorded as a discount to the $10M Note. Approximately $523,000 of the warrant discount was amortized to interest expense in 2019, with the remainder in January 2020. ~~Accordingly, the carrying value of the $10M Note approximated $9.9~~ ~~million at December 31, 2019.~~

The Company entered into an amendment agreement with the Noteholder in February 2020, whereby the Company and ~~MariMed Hemp~~MMH issued an amended and restated promissory note maturing in June 2020 in the principal amount of $11,500,000(~~the~~ (the “$11.5M Note”), comprised of the principal amount of the $10M Note and the $1.5M ~~Payment (which the Company had accrued).~~Payment. The $11.5M Note bore interest at a rate of 15% per annum, requiring periodic interest payments and minimum amortization payments of $3,000,000in the aggregate, which the Company ~~made.~~made in the first half of 2020.

The Company entered into a second amendment agreement with the Noteholder in June 2020, whereby (i) $352,000of outstanding principal of the $11.5M Note was converted into 1,900,000shares of the Company’s common stock (which did not result in ana material extinguishment gain or loss as the conversion price ~~was higher than~~approximated the price of the Company’s common stock on the ~~conversion~~agreement date), and (ii) the Company and ~~MariMed Hemp~~MMH issued a second amended and restated promissory note in the principal amount of approximately $8.8million, ~~(the “$8.8M Note”),~~ comprised of the outstanding principal and unpaid interest balances of the $11.5M Note, plus an extension fee of approximately $330,000, bearing interest at a rate of 15% per annum and maturing in June 2022 (the “$8.8M Note”). In addition, the Company issued ~~three-year~~ three-year warrants to the Noteholder to purchase up to 750,000shares of common stock at an exercise price of $0.50per share. The fair value of these warrants on the issuance date of approximately $66,000was recorded as a discount to the $8.8M Note, ~~to be~~and amortized to interest expense over the life of the $8.8M Note.

The ~~$8.8M Note bears interest at~~Company made a ~~rate of~~ 15~~% per annum,~~ ~~matures in June 2022, and~~ required ~~a minimum amortization~~principal payment of $4,000,000 in July 2020 ~~which the Company paid~~ with a portion of proceeds of the Refinanced ~~Mortgage. The Company can prepay all, or a portion,~~Mortgage discussed earlier in this footnote, and additional principal payments of $600,000 in the ~~outstanding principal and unpaid interest~~aggregate in calendar 2020. Accordingly, the carrying value of the $8.8M Note ~~however if any prepayment is made prior to~~was approximately $4.2 million at December ~~25, 2021, the Company shall be required to pay a prepayment premium equal to~~ 31, 2020.

The Noteholder ~~has the right to require the redemption of up to $250,000~~ of principal and unpaid interest thereon per calendar month. Such monthly redemptions shall be paid in common stock if certain defined conditions of the $8.8M Note and of the Company’s common stock are met, or else in cash. The Noteholder hashad the option to convert the $8.8M Note, in whole or in part, into shares of the Company’s common stock at a conversion price of $0.30, per share, subject to certain conversion limitations.

~~The~~ This non-detachable conversion feature of the $8.8M Note ~~is secured by a first priority security~~had no intrinsic value on the agreement date, and therefore no beneficial conversion feature arose. In March 2021, the Noteholder converted $1,000,000 of principal and approximately $10,000 of accrued interest ~~in the assets of certain~~into 3,365,972 shares of the Company’s subsidiaries and brands, and a pledge of the Company’s ownership interest in certain of its subsidiaries. The $8.8M Note imposes certain covenants on the borrowers, all of which were complied with as of September 30, 2020. On such date,common stock, reducing the carrying value of the $8.8M Note to approximately $3.2 million.

The Company entered into a third amendment agreement with the Noteholder in April 2021 whereby the Company and MMH issued a third amended and restated promissory note in the principal amount of approximately $3.2 million (the “$3.2M Note”) which bears interest at a rate of 0.12% per annum and matures in April 2023. The Noteholder has the option to convert, subject to certain conversion limitations, all or a portion of the $3.2M Note into shares of the Company’s common stock at a conversion price of $0.35 per share, such conversion price subject to adjustment in the event of certain transactions by the Company. The third amended agreement resulted in a decrease in the fair value of the embedded conversion feature of the $3.2M Note and therefore no accounting was required for such conversion feature.

On or after the one-year anniversary of the $3.2M Note, upon twenty days prior written notice to the Noteholder, the Company can prepay all of the outstanding principal and unpaid interest of the $3.2M Note, along with a prepayment premium equal to 10% of the principal amount being prepaid. The Noteholder shall remain entitled to convert the $3.2M Note during such notice period. On or after the one-year anniversary of the $3.2M Note, the Noteholder has the right to require the redemption in cash of up to $125,000 of principal and unpaid interest thereon per calendar month.

In 2021, the Noteholder converted approximately $2.3 million of principal on the $3.2M Note into 6,676,153 shares of the Company’s common stock, reducing the carrying value of the $3.2M Note to approximately $875,000 at September 30, 2021. All note conversions were effected in accordance with the terms of their respective note agreements, and therefore the Company was not required to record a gain or loss on such conversions.

In February 2020, pursuant to an exchange agreement as further described in Note 13 – Mezzanine Equity, the Company issued two promissory notes in the aggregate principal amount of approximately $4.4 million, bearing interest at 16.5% per annum and maturing in August 2021 (the “$4.4M Notes”), in exchange for a loan in the same amount. At December 31, 2020, the principal and accrued interest balance of the $4.4M Notes approximated $~~4.8~~4.6 million. In March 2021, utilizing a portion of the proceeds from the Hadron transaction discussed in Note 13 – Mezzanine Equity, the $4.4M Notes were fully paid down, along with accrued interest through the repayment date.

In April 2019, ~~MariMed Hemp~~MMH issued a secured promissory note in the principal amount of $1,000,000 (the “$1M Note”) to an unaffiliated party. The ~~proceeds of the $1M Note were used to finance a portion of the Seed Transactions as further discussed in Note 17 –~~ ~~Related Party Transactions~~~~. The $1M Note is secured by the collateral assignment of certain receivables from GenCanna and certain obligations of GenCanna to MariMed Hemp. The~~ principal balance plus a payment of $180,000, initially due in December 2019, was ~~extended to March 2020 in accordance with the terms of the $1M Note, requiring an additional payment of $30,000~~ ~~(the “$30,000 Fee”). Prior to the extended due date, the parties agreed that the $1M Note would continue~~continued on a month-to-month ~~basis bearing interest at a rate of~~ 15~~% per annum.~~basis. In September 2020, the Company paid down $500,000of principal on the $1M ~~Note. At September 30, 2020,~~Note, reducing the ~~outstanding balance consisted~~carrying value of the $1M Note to $500,000 at December 31, 2020. In March 2021, the Company paid interest on the $1M Note of $200,000. Also in March 2021, utilizing a portion of the proceeds from the Hadron transaction discussed in Note 12 – Mezzanine Equity, the remaining principal of $500,000 was paid down. At September 30, 2021, the Company is carrying an accrued interest balance of ~~principal and~~ approximately $~~403,000~~200,000 to cover the payment of ~~accrued~~any additional interest on the $1M Note, which ~~included~~ the $~~30,000~~ Company does not believe is required to be paid.~~Fee.~~

In March 2019, the Company raised $6.0million through the issuance of a secured promissory note (the “$6M Note”) to an unaffiliated party (the “Holding Party”) bearing interest at a rate of 13% per annum and a service fee of $900,000~~(the~~ (the “Service Fee”). ~~The proceeds of the note were used to finance a portion of the Seed Transactions as further discussed in Note 17 –~~ ~~Related Party Transactions~~~~. The $6M Note is secured by the collateral assignment of certain receivables from and obligations of GenCanna to MariMed Hemp.~~ The $6M Note’s initial maturity date ofin December ~~31,~~ 2019 was extended to April ~~30,~~ 2020in accordance with its ~~terms, with the Company paying a $300,000~~ ~~extension fee in December 2019 which was charged to interest expense.~~terms.

The Company and the Holding Party entered into a note extension agreement in April 2020 (the “Initial Extension Agreement”) pursuant to which (i) the $6M Note’s due date was extended to September 2020, and the $6M Note was modified to include unpaid accrued interest of $845,000through the modification date and interest at a rate of 10% per annum (the “$6.8M Note”), and (iii) a new convertible note in the amount of $900,000~~(the~~ (the “$900k Note”) was issued evidencing the Service Fee, bearing interest at a rate of 12% per annum. The Company satisfied the ~~$900k~~$900k Note and accrued interest of $20,100in full as of the June 2020 maturity date by the payment in July 2020 of $460,050in cash, representing one-half of the principal and accrued interest, and the issuance in June 2020 of 2,525,596shares of the Company’s common stock, ~~representing~~in payment of the other half of the principal and accrued interest.

~~In September 2018,~~Previous to the $6M Note, the Company raised $3.0 million from the issuance of a secured promissory note to the Holding Party in September 2018, bearing interest at a rate of 10% per annum (the “$3M Note”). The maturity date of the $3M Note, initially in March 2020, was extended for an additional six months in accordance with its terms, with the interest rate increasing to 12% per annum during the extension period. Pursuant to the Initial Extension Agreement, the maturity date of the $3M Note was extended to December 2020. ~~The Company may elect to prepay the $3M Note in whole or part without premium or penalty provided the Holding Party is given proper notice and the Company is not in default of the note agreement.~~

~~In consideration of the Initial Extension Agreement, the Company (i) paid the Holding Party a fee of $50,000~~, (ii) extended the security interest in the Company’s properties in Maryland to secure each note held by the Holding Party, and (iii) granted the Holding Party certain security interests in equity interests held by the Company. Each of the notes held by the Holding Party provides for cross-default and imposes certain covenants on the Company, all of which were complied with as of September 30, 2020.

~~As part of the $3M Note transaction, the Company issued three-year warrants to the Holding Party’s designees to purchase~~ ~~750,000~~ ~~shares of the Company’s common stock at an exercise price of $1.80~~ ~~per share.~~ The ~~Company recorded a discount on the $3M Note of approximately $1,511,000~~ ~~from the allocation of note proceeds to the warrants based on the fair value of such warrants on the issuance date. Approximately $882,000~~ ~~of the warrant discount was amortized to interest expense during 2018, and the remaining $629,000~~ ~~was amortized during 2019.~~

~~In October 2020, the~~ Company and the Holding Party entered into a second note extension agreement ~~effective September 30,~~in October 2020 (the “Second Extension Agreement”), whereby the Company (i) paid ~~in October 2020,~~ $1million of principal and all outstanding accrued interest of approximately $333,000on the $6.8M Note; (ii) issued an amended and restated senior secured promissory note in the principal amount of $5,845,000~~(the~~ (the “$5.8M Note”) to replace the $6.8M Note; and (iii) amended and restated the $3M Note (the “New $3M Note”, and together with the $5.8M Note, the “Amended Notes”). ~~At September 30, 2020, the $~~1 ~~million of principal and approximately $333,000~~ ~~of accrued interest on the $6.8M Note, both of which were paid in October 2020, were reflected in the current portion of outstanding notes payable and in accrued interest, respectively.~~

The Amended Notes ~~bear~~bore interest at a rate of 12% per annum ~~and~~with initial ~~mature~~maturity dates in September 2022.If all principal and accrued interest on either or both of the Amended Notes are not paid on or prior to their respective maturity dates, the Holding Party shall have the right, exercisable in its sole discretion at any time from September 2022 through March 2023, to convert all or a portion of the principal and interest owed into shares of the Company’s common stock at a conversion price equal to the average closing price for the 20 consecutive trading days prior to the date of conversion.~~The $5.8M Note requires mandatory principal payments of $400,000~~ ~~in February 2021, and $500,000~~ ~~per quarter during the period from May 2021 to August 2022 (such quarterly payments amounting to $3.0~~ ~~million in the aggregate).~~ ~~The $5.8M Note can be prepaid in whole or in part at any time without penalty.~~ ~~The New $3M Note can be prepaid in whole or in part without penalty only after the $5.8M Note has been fully repaid.~~

In consideration of the Second Extension Agreement, the Company (i) issued four-year warrants to the Holding Party’s designees to purchase up to 5,000,000shares of the Company’s common stock at an exercise price of $0.25per share; (ii) paid the Holding Party a fee of $100,000; and (iii) extended the security interest in certain Company properties and the pledge of certain equity interests to secure the Amended Notes. The Company recorded a discount on the Amended Notes of approximately $573,000based on the fair value of such warrants on the issuance date, of which approximately $~~1,000~~75,000 was amortized as of the end of ~~the quarter,~~2020, and the remainder to be amortized over the life of the Amended Notes. Accordingly, the carrying value of the Amended Notes approximated $8.3million at ~~September 30,~~December 31, 2020, of which $~~1.4~~ 1.9million was current.

The Company made a required principal payment of $400,000 on the $5.8M Note in February 2021. In March 2021, utilizing a portion of the proceeds from the Hadron transaction discussed in Note 13 – Mezzanine Equity, the Amended Notes were fully paid down, along with accrued interest through the repayment date. In addition, the remaining discount of approximately $450,000 on this note was fully amortized on the payment date.

In August 2020, the Company entered into a note agreement with First Citizens’ Federal Credit Union for the purchase of a commercial vehicle. The note bears interest at a rate of 5.74% per annum and matures in July 2026. At September 30, 2021 and December 31, 2020, the balance of this note approximated $27,000 and $30,000, respectively, of which approximately $5,000 was current in both periods.

In June 2021, the Company entered into a note agreement with Ally Financial for the purchase of a second commercial vehicle. The note bears interest at the rate of 10% per annum and matures in May 2027. At September 30, 2021, the balance of this note approximated $33,000, of which approximately $5,000 was current.

In addition to the above transactions, at the start of 2020, the Company ~~raised~~was carrying $~~800,000~~ 3,190,000~~and $2,760,000~~ ~~during~~ ~~the nine months ended September 30, 2020 and December 31, 2019, respectively, from the issuance~~ of principal on promissory notes issued to accredited investors bearing interest at rates ranging from 6.5% to 18% per annum ~~and~~ ~~maturing in 2020 and 2021(the “Third Party~~(the “Existing Notes”). During 2020, the Company (i) raised approximately $~~2,800,000~~ 2,147,000 from the issuance of new promissory notes to accredited investors bearing interest at 12% and 15% per annum (the “New 2020 Notes”), (ii) repaid $2,100,000of the ~~Third Party~~Existing Notes, ~~was~~(iii) retired $500,000 of the Existing Notes through the issuance of common stock at a conversion price equal to the market price of the Company’s common stock on the conversion date of $0.32 per share, and (iv) repaid $700,000 of the New 2020 Notes. Accordingly, the remaining balance on the Existing Notes and New 2020 Notes approximated $2,037,000in ~~2020, and accordingly, $760,000~~ ~~remained outstanding~~the aggregate at ~~September 30, 2020~~December 31, 2020. This balance along with ~~related~~ accrued interest through the repayment date of approximately $~~48,000~~200,000 were fully paid down in March 2021 utilizing a portion of the proceeds from the Hadron transaction discussed in Note 13 – Mezzanine Equity.

As of September 30, ~~2020,~~2021, the aggregate scheduled maturities of the Company’s total debt outstanding ~~inclusive of the promissory notes and mortgages described within this Note 9 –~~ ~~Debt~~~~, and the convertible debentures described in the following Note 10~~ ~~– Debentures Payable,~~ were:

In a series of transactions from the period October 2018 through February 2020, the Company sold an aggregate of $21.0 million of convertible debentures (the “$21M Debentures”) to an accredited investor pursuant to an amended securities purchase agreement (the “SPA”). The following table as of September 30, 2021 summarizes the purchase dates and selected terms of each debenture ~~transaction~~agreement that ~~comprises~~comprised the $21M Debentures:

Issue Date	Maturity Date	Initial Principal		Interest Rate		Issue Discount		Warrant Discount		Ben. Conv. Feature		Converted To Common Stk.		Outstanding Principal		Maturity Date	Initial Principal	Interest Rate		Issue Discount	Warrant Discount		Beneficial Conversion Feature	Converted To Common Stock
10/17/18	10/16/20	$	5,000,000	6.0	%	1.0	%	$	457,966	$	1,554,389	$	5,000,000	$	-	10/16/20	$5,000,000		6.0%	1.0%	$	457,966	$1,554,389	$	5,000,000
11/07/18	11/06/20		5,000,000	6.0	%	1.0	%		599,867		4,015,515		5,000,000		-	11/06/20	5,000,000		6.0%	1.0%		599,867	4,015,515		5,000,000
05/08/19	05/07/21		5,000,000	6.0	%	1.0	%		783,701		2,537,235		3,250,000		1,750,000	05/07/21	5,000,000		6.0%	1.0%		783,701	2,537,235		5,000,000
06/28/19	06/27/21		2,500,000	0.0	%	7.0	%		145,022		847,745		1,050,000		1,450,000	06/27/21	2,500,000		0.0%	7.0%		145,022	847,745		2,500,000
08/20/19	08/19/21		2,500,000	0.0	%	7.0	%		219,333		850,489		2,500,000		-	08/19/21	2,500,000		0.0%	7.0%		219,333	850,489		2,500,000
02/21/20	02/20/21		1,000,000	6.5	%	6.5	%		28,021		379,183		-		1,000,000	02/20/21	1,000,000		6.5%	6.5%		28,021	379,183		1,000,000

~~The~~As of September 30, 2021, the holder of the $21M Debentures (the “Holder”) ~~has the right at any time to convert~~had converted all ~~or a portion~~ of the $21M Debentures, along with accrued ~~and unpaid~~ interest, into the Company’s common stock at conversion prices equal to 80% of a calculated average, ~~as determined in accordance with~~pursuant to the terms of the ~~$21M Debentures,~~debenture agreements, of the daily volume-weighted price during the ten consecutive trading days preceding the date of ~~conversion, subject to a cap in certain conversions. Notwithstanding this conversion right,~~conversion. Specifically, over the life of the $21M Debentures, the Holder ~~shall limit~~converted, in several transactions, an aggregate of $21.0 million of principal and approximately $836,000 of accrued interest into 92,704,035 shares of common stock at conversion prices ranging from $0.11 to $3.06 per share. Of these conversions, (i) during 2020, an aggregate of $9.7 million of principal and approximately $365,000 of accrued interest was converted into 77,766,559 shares of common stock at conversion prices ranging from $0.11 and $0.34 per share, and (ii) during 2021, an aggregate of $1.3 million of principal and approximately $56,000 of accrued interest was converted into 4,610,645 shares of common stock at a conversion price of $0.29 per share.

All of the aforementioned conversions were effected in accordance with the terms of the debenture agreements, and therefore the Company was not required to record a gain or loss on such conversions. The conversions were limited in any given month to certain agreed-upon amounts based on the conversion price, and the Holder ~~shall~~was also be limited from beneficially owning more than 4.99% of the Company’s outstanding common ~~stock (potentially further limiting the Holder’s conversion right).~~

~~The Company has the right to redeem all or a portion of the $21M Debentures, along with accrued and unpaid interest, at a~~ 10% premium, provided that the Company first delivers advance written notice to the Holder of its intention to make a redemption, with the Holder allowed to effect certain conversions of the $21M Debentures during such notice period.

~~Upon a change in control transaction, as defined, the Holder may require the Company to redeem all or a portion of the $21M Debentures at a price equal to~~ ~~110~~% of the outstanding principal amount of the $21M Debentures, plus all accrued and unpaid interest thereon. So long as the $21M Debentures are outstanding, in the event the Company enters into a Variable Rate Transaction (“VRT”), as defined in the SPA, the Holder may cause the Company to revise the terms of the $21M Debentures to match the terms of the convertible security issued in such VRT.stock.

In conjunction with the issuance of the $21M Debentures, the Company issued the Holder ~~three-year~~three-year warrants to purchase an aggregate of 1,354,675 shares of the Company’s common stock at exercise prices ranging from $0.75 to $5.50 per share, of which warrants to purchase 180,000 shares of common stock at an exercise price of $0.75 were issued in ~~the nine months ended September 30,~~ 2020. The fair value of the warrants of approximately $2.2million was recorded as a discount to the carrying amount of the $21M Debentures and are amortized to interest expense over the respective term of the individual debentures comprising the $21M Debentures.

Based on the conversion prices of the $21M Debentures in relation to the market value of the Company’s common stock, the $21M Debentures provided the Holder with a beneficial conversion feature, as the embedded conversion option was in-the-money on the commitment date. The aggregate intrinsic value of the beneficial conversion feature of approximately $10.2 million was recorded as a discount to the carrying amount of the $21M Debentures, ~~with an offset to additional paid-in-capital. The beneficial conversion feature is~~and amortized to interest expense over the respective term of the individual debentures comprising the $21M Debentures.

Pursuant to the terms of a registration rights agreement with the Holder, entered into concurrently with the SPA, the Company agreed to provide the Holder with certain registration rights with respect to ~~any potential~~ shares issued pursuant to the terms of the SPA and the $21M Debentures. An addendum to the SPA stipulates that the Holder has agreed not to undertake a conversion of all or a portion of the $21M Debentures that would require the Company to issue more shares than the amount of available authorized shares at the time of conversion, which amount of authorized shares shall not be less than the ~~current authorized number of 500 million shares of common stock, thereby eliminating the requirement to bifurcate and account for the conversion feature of the $21M Debentures as a derivative.~~

~~The Holder converted, in several transactions from November 2018 through September 2020, an aggregate of $16.8 million~~ ~~of principal and approximately $768,000~~ ~~of accrued interest into~~ ~~64,470,063~~ ~~shares of common stock at conversion prices ranging from $0.11~~ ~~to $3.06~~ ~~per share. Of these conversions, an aggregate of $6.8~~ ~~million of principal and approximately $356,000~~ ~~of accrued interest was converted into~~ ~~54,143,232~~ ~~shares of common stock at exercise prices of $0.11~~ ~~and $0.34~~ ~~per share during the nine months ended September 30, 2020.~~

All of the aforementioned conversions were performed in accordance with the terms of their respective convertible debenture agreements, and therefore the Company was not required to record a gain or loss on such conversions.

During the ~~nine months~~year ended ~~September 30,~~December 31, 2020, ~~and 2019,~~ amortization of the beneficial conversion features, after adjustment for the aforementioned conversions, approximated $~~2,553,000~~ 3.2~~and $4,646,000, respectively;~~ million; amortization of the warrant discounts approximated $~~545,000~~ 805,000~~and $913,000~~ ~~respectively; and the~~; amortization of original issue discounts approximated $~~267,000~~ 321,000; and $~~107,000, respectively. Additionally, accrued~~ interest expense ~~for such periods~~ approximated $~~234,000~~ 224,000~~and $421,000, respectively.~~

. At ~~September 30,~~December 31, 2020, the aggregate outstanding principal balance of the $21M Debentures was $~~4,200,000~~1.3. million. Also on such date, the unamortized balances of the beneficial conversion features, the warrant discounts, and original issue discounts were approximately $~~867,000~~177,000, $~~300,000~~39,000, and $~~105,000~~52,000, respectively. Accordingly, at ~~September 30,~~December 31, 2020, the carrying value of the $21M Debentures ~~was approximately~~approximated $~~2,928,000~~1,032,000, all of which was current.

~~At December 31, 2019,~~During the ~~aggregate outstanding principal balance on the $21M Debentures was $10,000,000. Also on such date, the unamortized balances~~nine months ended September 30, 2021, amortization of the beneficial conversion features, after adjustment for the aforementioned conversions, approximated $177,000; amortization of the warrant discounts ~~and~~approximated $39,000; amortization of original issue discounts ~~were approximately~~approximated $~~3,041,000~~52,000,; and interest expense approximated $~~817,000~~1,000~~, and $307,000, respectively. Accordingly, at December 31, 2019, the carrying value of the $21M Debentures was approximately $5,835,000, all of which was long term.~~.

In February 2020, the Company entered into an exchange agreement with two institutional shareholders (the “TIS Exchange Agreement”) whereby the Company (i) exchanged 4,908,333 shares of the Company’s common stock previously acquired by the two institutional shareholders for an equal number of shares of newly designated Series B convertible preferred stock, and (ii) issued the $4.4M Notes previously discussed in Note 911 – ~~Debt~~Promissory Notes.

In connection with the TIS Exchange Agreement, the Company filed (i) a certificate of designation with respect to the rights and preferences of the Series B convertible preferred stock, and (ii) a certificate of elimination to return all shares of the Series A convertible preferred stock, of which no shares were issued or outstanding at the time of filing, to the status of authorized and unissued shares of undesignated preferred stock.

The holders of Series B convertible preferred stock (the “Series B Holders”) are entitled to cast the number of votes equal to the number of shares of common stock into which the shares of Series B convertible preferred stock are convertible, together with the holders of common stock as a single class, on most matters. However, the affirmative vote or consent of the Series B Holders voting separately as a class is required for certain acts taken by the Company, including the amendment or repeal of certain charter provisions, liquidation or winding up of the Company, creation of stock senior to the Series B convertible preferred stock, and/or other acts defined in the certificate of designation.

The Series B convertible preferred stock shall, with respect to dividend rights and rights on liquidation, winding up and dissolution, rank senior to the Company’s common stock. The Company shall not declare, pay, or set aside any dividends on shares of any other class or series of capital stock of the Company unless the Series B Holders then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series B convertible preferred stock in an amount calculated pursuant to the certificate of designation.

In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the Series B Holders then outstanding shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders before any payment shall be made to the holders of common stock by reason of their ownership thereof, an amount per share equal to $3.00, plus any dividends declared but unpaid thereon, with any remaining assets distributed pro-rata among the holders of the shares of Series B convertible preferred stock and common stock, based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted to common stock.

At any time on or prior to the six-year anniversary of the issuance date of the Series B convertible preferred stock, (i) the Series B Holders have the option to convert their shares of Series B convertible preferred stock into common stock at a conversion price of $3.00 per share, without the payment of additional consideration, and (ii) the Company has the option to convert all, but not less than all, shares of Series B convertible preferred stock into common stock at a conversion price of $3.00 if the daily volume weighted average price of common stock (the “VWAP”) exceeds $~~4.00~~$4.00 per share for at least twenty consecutive trading days prior to the date on which the Company gives notice of such conversion to the Series B Holders.

On the day following the six-year anniversary of the issuance of the Series B convertible preferred stock, all outstanding shares of Series B convertible preferred stock shall automatically convert into common stock as follows:

If the sixty-day VWAP is less than or equal to $0.50 per share, the Company shall have the option to (i) convert all shares of Series B convertible preferred stock into common stock at a conversion price of $1.00 per share, and pay cash to the Series B Holders equal to the difference between the 60-day VWAP and $3.00 per share, or (ii) pay cash to the Series B Holders equal to $3.00 per share.

If the sixty-day VWAP is greater than $0.50 per share, the Company shall have the option to (i) convert all shares of Series B convertible preferred stock into common stock at a conversion price per share equal to the quotient of $~~3.00~~$3.00 per share divided by the sixty-day VWAP, or (ii) pay cash to the Series B Holders equal to $3.00 per share, or (iii) convert all shares of Series B convertible preferred stock into common stock at a conversion price per share equal to the sixty-day VWAP per share and pay cash to the Series B Holders at the difference between $3.00 per share and the sixty-day VWAP per share.

The Company shall at all times when the Series B convertible preferred stock is outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Series B convertible preferred stock, such number of its duly authorized shares of common stock as shall from time to time be sufficient to effect the conversion of all outstanding Series B convertible preferred stock.

In March 2021, the Company entered into a securities purchase agreement with Hadron Healthcare Master Fund (“Hadron”) with respect to a financing facility of up to $46.0 million in exchange for newly-designated Series C convertible preferred stock of the Company and warrants to purchase the Company’s common stock.

At the closing of the transaction in March 2021, Hadron purchased $23.0 million of Units at a price of $3.70 per Unit. Each Unit is comprised of one share of Series C preferred stock and a four-year warrant to purchase two and one-half shares of common stock. Accordingly, the Company issued to Hadron 6,216,216 shares of Series C preferred stock and warrants to purchase up to an aggregate of 15,540,540 shares of common stock. Each share of Series C preferred stock is convertible, at Hadron’s option, into five shares of common stock, and each warrant is exercisable at an exercise price of $1.087 per share. The warrants shall be subject to early termination if certain milestones are attained, and the market value of the Company’s common stock reaches certain predetermined levels. The fair value of the warrants of approximately $9.5 million on the issuance date was allocated to the proceeds and recorded as additional paid-in capital. The Company incurred costs of approximately $387,000 relative to the issuance of the aforementioned shares to Hadron which was recorded as a reduction to additional paid-in capital in March 2021.

In connection with the closing of the transaction, the Company filed a certificate of designation with respect to the rights and preferences of the Series C convertible preferred stock. Such stock is zero coupon, non-voting. and has a liquidation preference equal to its investment amount plus declared but unpaid dividends. Holders of Series C convertible preferred stock are entitled to receive dividends on an as-converted basis.

Of the $23.0 million of proceeds received by the Company in March 2021, approximately (i) $7.8 million is designated to fund construction and upgrades of certain of the Company’s owned and managed facilities, which was expended during the nine months ended September 30, 2021, and (ii) $15.2 million was used to pay down debt and obligations, comprised of principal and interest on the $4.4M Notes, the $1M Note, the New $3M Note, the $5.8M Note, the Existing Notes, the New 2020 Notes (all referred to in Note 11 – Promissory Notes), and a portion of the Due To Related Parties balance discussed in Note 19 – Related Party Transactions.

The balance of the committed facility of up to an additional $23.0 million is intended to fund the Company’s specific targeted acquisitions provided such acquisitions are contracted in 2021 and consummated, including obtaining the necessary regulatory approvals, no later than the end of 2022. Such funds shall be provided by Hadron on the same aforementioned terms as the initial proceeds.

Provided that as at least 50% of the shares of Series C convertible preferred stock remain outstanding, the holders shall have the right to appoint one observer to the Company’s board and to each of its board committees, and appoint a member to the Company’s board if and when a seat becomes available, at which time the observer roles shall terminate.

The transaction imposes certain covenants on the Company with respect to the incurrence of new indebtedness, the issuance of additional shares of any designation of preferred stock, and the payment of distributions.

At the Company’s 2021 annual meeting of stockholders in September 2021 (the “Annual Meeting”), stockholders approved an amendment to the Company’s certificate of incorporation increasing the number of authorized shares of common stock from 500,000,000 to 700,000,000.

Also at the Annual Meeting, stockholders approved an amendment to the Company’s Amended and Restated 2018 Stock Award and Incentive Plan (the “Plan”) increasing the aggregate number shares reserved for issuance under the Plan from 40,000,000 to 70,000,000.

In February 2020, the Company filed a certificate of elimination to return all shares of formerly designated Series A convertible preferred stock to the status of authorized and unissued shares of undesignated preferred stock.

In February 2020, pursuant to the TIS Exchange Agreement discussed in Note 13 – Mezzanine Equity, the 4,908,333 shares of common stock exchanged for shares of Series B convertible preferred stock were treated as an increase to treasury stock of $14,725,000 ($3.00 per share), and then immediately cancelled, thereby reducing treasury stock to zero, with corresponding reductions to common stock of approximately $55,000~~,000~~ (the par value of the exchanged common shares) and additional paid-in capital of approximately $14,720,000.

~~During~~In the nine months ended September 30, 2021 and 2020, the Company granted 9,081 and 97,797 shares of common stock, respectively, to an employee. The fair value of these shares of approximately $7,000 in 2021 and $11,000 in 2020 was charged to compensation expense. Of these shares granted, 2,204 shares and 33,319 shares, with fair values of approximately $2,000 and $5,000, respectively, were yet to be issued at September 30, 2021 and 2020, respectively, and were included in Common Stock Subscribed But Not Issued on the balance sheets at those dates.

In the nine months ended September 30, 2021, the Company granted 245,217 shares of restricted common stock to three employees. The fair value of these restricted shares of approximately $226,000 was charged to compensation expense. Of these restricted shares granted, 100,000 shares, with a fair value of approximately $93,000, were yet to be issued at September 30, 2021, and were included in Common Stock Subscribed But Not Issued on the balance sheet at such date. No shares of restricted common stock were issued in 2020.

In the nine months ended September 30, 2021 and 2020, the Company issued 71,691 and 4,400,000shares of common stock, respectively, to settle obligations of $51,000 and approximately $699,000~~of obligations.~~, respectively. Based on the price of the Company’s common stock on the settlement ~~date,~~dates, the Company incurred ~~a loss~~non-cash losses of approximately $2,500 in 2021 and $45,000 in 2020, which iswere reflected under Loss On Obligations Settled ~~With~~with Equityon the statement of ~~operations.~~ operations for each period.

~~such settlements occurred during~~In the nine months ended September 30, ~~2019.~~2021, the Company issued (i) 300,000 shares of common stock valued at $283,200 to pay for consulting fees, and (ii) 109,308 shares valued at approximately $92,000 to pay for licensing fees. No such fees were paid with common stock in 2020.

In July 2021, 79,815 shares of common stock were returned to the Company from the adjustment of a previously converted debenture. NaN common stock was returned in 2020.

During the nine months ended September 30, ~~2020, the Company granted~~ ~~97,797~~ ~~shares of common stock to a current employee. The fair value of the shares of approximately $16,000~~ ~~was charged to employee compensation during the period. At September 30, 2020,~~ ~~33,319~~ ~~of these shares were yet to be issued. During the nine months ended September 30, 2019, the Company granted~~ ~~108,820~~ ~~shares of common stock to current employees. The fair value of the shares of approximately $194,000~~ ~~was charged to employee compensation during the period.~~

~~During the nine months ended September 30, 2020,~~ ~~40,000~~ ~~shares of common stock granted to an employee in 2019 were forfeited. The Company recorded these returned shares at par value.~~ ~~NaN~~ ~~common stock forfeitures occurred in 2019.~~

~~During the nine months ended September 30, 2020~~2021 and ~~2019,~~2020, the Company issued ~~3,236,857~~11,413 and ~~97,136~~3,236,857 shares of common stock, respectively, associated with previously issued subscriptions on common stock with a value of approximately $~~1,168,000~~5,000 and $~~169,000~~1,168,000, respectively.

~~During the nine months ended September 30, 2019, the Company sold~~ ~~799,995~~ ~~shares of common stock at a price of $3.25~~ ~~per share, resulting in total proceeds of $2,600,000~~. ~~NaN~~ ~~common stock was sold during the nine months ended September 30, 2020.~~

~~As previously disclosed in Note 3~~ ~~– Acquisitions~~~~, the Company issued in 2019 (i)~~ ~~1,000,000~~ ~~shares of common stock in connection with the acquisition of the KPGs and Mari-IL, (ii)~~ ~~1,000,000~~ ~~shares of common stock as a good faith deposit on the Harvest acquisition, and (iii)~~ ~~520,000~~ ~~shares of common stock in connection with the acquisition of MediTaurus.~~

As previously disclosed in Note 411 – ~~– Investments~~Promissory Notes, the Company issued (i) an aggregate of ~~500,000~~10,042,125 shares of common stock in ~~2019 to purchase a minority~~2021 upon the conversion of approximately $3,346,000 of principal and interest ~~in Terrace, and~~on promissory notes, (ii) ~~378,259~~1,900,000 shares of common stock in ~~2018~~June 2020 to ~~purchase a minority~~extinguish $352,000 of principal on promissory notes, and (iii) 2,525,596 shares common stock in June 2020 upon the conversion of $460,050 of principal and interest ~~in MRSVP.~~on promissory notes.

As previously disclosed in Note ~~9 –~~ ~~Debt~~~~, the Company issued~~ ~~4,425,596~~ ~~shares of common stock during the nine months ended September 30, 2020 to retire approximately $812,000~~ ~~of promissory notes (principal and accrued interest).~~

~~As previously disclosed in Note 10~~12 – Debentures Payable, ~~during the nine months ended September 30, 2020,~~ the holder of the $21M Debentures converted (i) approximately $~~7.2~~1.4 million of principal and interest in 2021 into ~~54,143,232~~4,610,645 shares of common ~~stock. During the nine months ended September 30, 2019, the holder of the $21M debentures converted~~stock, and (ii) approximately $~~7.9~~10.1 million of principal and interest in 2020 into ~~6,798,339~~77,766,559 shares of common stock.

As further disclosed in Note 1315 – ~~– Stock~~ Options, the Company issued 178,885 shares of common stock during the nine months ended September 30, ~~2019,~~ ~~417,352~~ ~~shares of common stock were issued in connection with~~2021 from the exercise of stock options. NaN ~~stock~~ options were exercised during the ~~nine months ended September 30,~~same period in 2020.

As further disclosed in Note 1416 – – Warrants, the Company issued 980,062 shares of common stock during the nine months ended September 30, ~~2019, warrants to purchase~~ ~~686,104~~ ~~shares~~2021 from the exercise of ~~common stock were exercised.~~warrants. NaN warrants were exercised during the ~~nine months ended September 30,~~same period in 2020.

At September 30, 2021, the Company was obligated to issue (i) 102,204 shares of common stock valued at approximately $95,000 in connection with a stock grant and restricted stock grants to current employees, and (ii) 100,000 shares of common stock valued at approximately $94,000 in connection with the purchase of the remaining 30% interest of MediTaurus as discussed in Note 3 – Acquisitions. These shares were issued in November 2021. At September 30, 2020, the Company was obligated to issue 33,319 shares of common stock valued at approximately $5,000, in connection with a stock grant to a current employee. ~~Such~~These shares were ~~subsequently~~ issued in October 2020. ~~At September 30, 2019, the Company was obligated to issue~~ ~~6,603,532~~ ~~shares of common stock, valued at approximately $5.0~~ ~~million, in connection with the MediTaurus acquisition, stock option exercises, and debenture conversions. Such shares were subsequently issued in the fourth quarter of 2019.~~

In August 2019, the Company’s board of directors approved the Amended and Restated 2018 Stock Award and Incentive Plan (the “Incentive Plan”), based on the board’s belief that awards authorized under the Incentive Plan provide incentives for the achievement of important performance objectives and promote the long-term success of the Company. In September 2019, the Incentive Plan was approved by the stockholders at the Company’s annual stock-holders meeting.

The Incentive Plan is an omnibus plan, authorizing a variety of equity award types as well as cash and long-term incentive awards. The Incentive Plan amends and restates the Company’s 2018 Stock Award and Incentive Plan (the “Previous Plan”), which was approved by the board of directors in July 2018 but never presented to stockholders for approval. Any grants made under the Previous Plan prior to the approval date of the Incentive Plan shall continue to be governed by the terms of the Previous Plan.

The Incentive Plan authorizes a broad range of awards, including stock options, stock appreciation rights, restricted stock, deferred stock, dividend equivalents, performance shares, cash-based performance awards, and other stock-based awards. Such awards can be granted to employees, non-employee directors and other persons who provide substantial services to the Company and its affiliates. Nothing in the Incentive Plan precludes the payment of other compensation to officers and employees, including bonuses based upon performance, outside of the Incentive Plan.

~~An aggregate of~~ ~~40,000,000~~ shares are reserved for delivery to participants and may be used for any type of award under the Incentive Plan. Shares actually delivered in connection with an award will be counted against such number of reserved shares. Shares will remain available for new awards if an award under the Incentive Plan expires, is forfeited, canceled, or otherwise terminated without delivery of shares or is settled in cash. Each award under the Incentive Plan is subject to the Company’s claw back policy in effect at the time of grant of the award.

The board of directors may amend, suspend, discontinue, or terminate the Incentive Plan or the authority to grant awards thereunder without stockholder approval, except as required by law or regulation or under rules of the stock exchange, if any, on which the Company’s stock may then be listed. Unless earlier terminated, grants under the Incentive Plan will terminate ten years after stockholder approval of the Incentive Plan, and the Incentive Plan will terminate when no shares remain available and the Company has no further obligation with respect to any outstanding award.

During the nine months ended September 30, ~~2020,~~2021, the Company granted three- and five-year options to purchase up to 16,651,421 shares of common stock at exercise prices ranging from $0.30 to $1.00 per share. The fair value of these options of approximately $10,142,000 in the aggregate is being amortized to compensation expense over the respective option vesting periods, of which approximately $5,993,000 was amortized during the nine months ended September 30, 2021. Additionally, compensation expense in the first half of 2021 for options issued in previous years, and continuing to be amortized over their respective vesting periods, approximated $638,000.

During the nine months ended September 30, 2020, five-year options to purchase up to 1,064,500 shares of common stock were issued to employees at exercise prices of $0.15 and $0.30 per share. ~~During the same period in 2019, the Company granted options to purchase up to~~ ~~900,000~~ ~~shares of common stock, expiring four and five years from their grant dates, at exercise prices ranging from $0.99~~ ~~to $1.95~~ ~~per share.~~

The fair ~~values~~value of ~~the aforementioned~~these options ~~granted in 2020 and 2019~~ of approximately $117,000 ~~and $876,000, respectively, are~~in the aggregate is being amortized to compensation expense over their respective vesting periods, of which approximately $100,000 ~~and $101,000~~ was amortized during the nine months ended September 30, 2020. Additionally, compensation expense in the first half of 2020 for options issued in previous years, and ~~2019, respectively.~~continuing to be amortized over their respective vesting periods, approximated $746,000.

During the nine months ended September 30, ~~2019,~~2021, options to purchase ~~3,585,000~~251,000 shares of common stock were exercised at prices ranging from $~~0.08~~0.21 to $~~0.77~~0.45 per share. Of these exercised options, ~~2,285,000~~125,000 were exercised on a cashless basis with the exercise prices paid via the surrender of ~~523,192~~72,115 shares of common stock. No options were exercised during the nine months ended September 30, 2020.

During the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, options to purchase ~~210,000~~152,000 and ~~80,000~~210,000 shares of common stock, respectively, were forfeited or expired, resulting in an aggregate reduction of amortized compensation expense of zero in 2021 and approximately $208,000 ~~and $170,000, respectively.~~in 2020.

Stock options outstanding and exercisable as of September 30, ~~2020~~2021 were:

During the nine months ended September 30, 2021, the Company issued warrants to purchase up to 2,100,000 shares of common stock at exercise prices ranging from $0.50 to $0.83 per share, expiring three and five years from issuance. The fair value of these warrants on their issuance dates approximated $1,487,000 in the aggregate which was charged to compensation expense. Also during this period, the Company issued warrants to Hadron to purchase up to 15,540,540 shares of common stock at an exercise price of $1.087 per share, expiring four years from issuance, as part of the Hadron transaction previously discussed in Note 13 – Mezzanine Equity. The fair value of these warrants on the issuance date of approximately $9.5 million was allocated to the warrant of the $23.0 million of proceeds from the Hadron transaction and recorded in additional paid in capital.

During the nine months ended September 30, 2020, in conjunction with the $21M Debentures ~~previously disclosed~~discussed in Note 1012 – Debentures Payable, the Company issued ~~three-year~~three-year warrants to purchase up to 180,000 shares of common stock at an exercise price of $0.75 per share. ~~The fair value of these warrants on the issuance date approximated $28,000, with approximately $17,000~~ ~~of this amount amortized to interest expense during the period and the remainder to be amortized over the term of the respective debentures.~~

Also during this period, ~~as previously disclosed~~(i) in ~~Note 9 –~~ ~~Debt,~~ ~~(i) as part of~~conjunction with the $8.8M Note ~~transaction,~~discussed in Note 11 – Promissory Notes, the Company issued ~~three-year~~three-year warrants to purchase up to750,000shares of common stock at an exercise price of $0.50 per share, and (ii) in consideration of the Second Extension Agreement, also discussed in Note 11 – Promissory Notes, the Company issued ~~four-year~~four-year warrants to purchase up to 5,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The fair value of these warrants on their issuance dates approximated $639,000~~, with~~ in the aggregate, of which approximately $10,000 ~~of this amount~~was amortized to interest expense ~~during~~in the period and the remainder to be amortized byover the ~~maturity dates~~terms of the respective ~~promissory notes.~~debt instruments.

During the nine months ended September 30, ~~2019, in conjunction with the $21M Debentures previously disclosed in Note 10~~ ~~– Debentures Payable~~~~, the Company issued~~ ~~three-year warrants~~ ~~to purchase~~ ~~850,000~~ ~~shares of common stock at exercise prices of $3.00~~ ~~and $5.00~~ ~~per share. The fair value of these warrants at issuance approximated $1,148,000, with approximately $517,000 of this amount amortized to interest expense during the period and the remainder to be amortized over the remaining term of the respective debentures.~~

~~Also during this period, as part of the $10M Note transaction previously disclosed in Note 9 –~~ ~~Debt,~~ ~~the Company issued three-year~~2021, warrants to purchase ~~375,000~~1,237,500 ~~shares of common stock at an exercise price of $4.50~~ ~~per share. The fair value of these warrants at issuance approximated $601,000, with approximately $294,000~~ ~~of this amount amortized to interest expense during the period and the remainder amortized by the maturity date of the $10M Note.~~

~~The Company also issued stand-alone warrants to purchase up to~~ ~~25,000~~ ~~and~~ ~~125,000~~ ~~shares of common stock during the nine months ended September 30, 2020 and 2019, respectively. The fair value of these warrants at issuance approximated $2,000~~ ~~in 2020 and $139,000~~ ~~in 2019, and were charged to compensation expense during the periods.~~

~~During the nine months ended September 30, 2019, warrants to purchase up to~~ ~~686,104~~shares of common stock were exercised at exercise prices ranging from $~~0.12~~0.11 to $~~1.75~~0.55 per ~~share, resulting in aggregate proceeds to~~share. Of these exercised warrants, 437,500 were exercised on a cashless basis with the ~~Company~~exercise prices paid via the surrender of ~~approximately $612,000~~257,438~~. No~~ shares of common stock. NaN warrants were exercised during the same period in 2020.

During the nine months ended September 30, 2021, warrants to purchase 5,517,474 shares of common stock with exercise prices ranging from $0.90 to $4.30 per share were forfeited. No warrants were forfeited during the same period in 2020.

At September 30, ~~2020~~2021 and ~~2019,~~2020, warrants to purchase up to ~~17,735,107~~27,802,734 and~~11,270,107~~ 17,735,107 shares of common stock, respectively, were outstanding with exercise prices ranging from $~~0.15~~0.11 to $5.50 per share inacross both periods.

~~The~~For the nine months ended September 30, 2021 and 2020, the Company’s revenues were comprised of the following major categories:

~~The amount under~~ ~~Product Sales From Related Party~~ ~~shown in the table above represents the total revenues from the seed transactions with GenCanna, which is further disclosed in Note 17 –~~ ~~Related Party Transactions~~~~. Excluding these revenues, for~~For the nine months ended September 30, 2021 and 2020, ~~and 2019, revenue~~revenues from two clients represented ~~24%~~11% and ~~82%~~24%, respectively, of total revenues.

At ~~September~~ ~~30, 2020~~The Company maintains two types of reserves to address uncertain collections of amounts due—an allowance against trade accounts receivable (the “AR Allowance”), and ~~2019,~~a reserve against cash advanced by the Company ~~maintained reserves against bad debts of approximately $44.3~~ ~~million and $250,000, respectively.~~to its cannabis-licensed clients for working capital purposes (the WC Reserve”).

During the nine months ended September 30, 2021, the Company increased the AR Allowance by $1,400,000, and the WC Reserve by approximately $455,000. The ~~September~~ ~~30, 2020 reserves were primarily comprised~~aggregate of ~~(i) an allowance against the accounts receivable balance due from~~ ~~GenCanna~~these two amounts of approximately $~~29.0~~1,855,000 ~~million, following~~was charged to Bad Debts on the ~~commencement~~statement of ~~GenCanna’s Chapter 11 proceedings as previously discussed in Note 4 –~~ ~~Investments~~~~, (ii) an allowance against~~operations during this period. During the ~~accounts receivable balance of~~nine months ended September 30, 2020, the Company increased the AR Allowance by $1,000,000 and the WC Reserve by approximately $~~11.1~~ 342,000.

~~million, and reserve against the working capital balance of approximately $1.5~~ ~~million, due from Kind, in light of the current litigation between the Company and Kind as further discussed in Note 18 –~~ ~~Commitments and Contingencies~~~~, and (iii) an allowance against the accounts receivable balance of approximately $314,000, and~~ ~~a reserve against the working capital balance of approximately $2.3~~ ~~million due from Harvest, based on the Company’s expectation of the negative impact of the COVID-19 pandemic on Harvest’s local economy.~~

~~During 2019,~~Effective July 1, 2021, the Company ~~through its MariMed Hemp subsidiary,~~ entered into ~~several hemp seed sale transactions~~employment agreements with ~~GenCanna whereby~~its CEO, CFO, and COO, expiring in June 2024, that provide for an annual base salary of $350,000, $325,000, and $300,000, respectively, and the ~~Company acquired large quantities~~ability to receive annual bonuses of ~~top-grade feminized hemp seeds with proven genetics at volume discounts that it sold~~up to GenCanna at market rates. The seeds met the U.S. government’s definition of federally legal industrial hemp, which was descheduled as a controlled substance and classified as an agricultural commodity upon the signing75% of the ~~2018 U.S. Farm Bill.~~executive’s annual base salary for each year during the term, based on reaching certain performance goals established by the Company.

~~The Company purchased $~~Pursuant to the agreements, the CEO, CFO, and COO were granted (i) on the effective date, options to purchase up to ~~20.75~~5,000,000, ~~million of hemp seed inventory which it sold~~5,000,000, and ~~delivered to GenCanna for $33.2~~1,250,000 ~~million. The Company provided GenCanna with extended payment terms through December 2019, to coincide with the completion~~shares, respectively, of the ~~seeds’ harvest, although~~Company’s common stock, at an exercise price of $0.88 per share, that vest over one year and expire in July 2026, and (ii) in October 2021, options to purchase up to 5,000,000, 5,000,000, and 1,250,000 shares, respectively, of the ~~payment by GenCanna was not contingent upon the success~~Company’s common stock, at an exercise price of ~~such harvest or its yield. To partially fund the seed purchases, the Company raised~~ $~~17.0~~0.90 ~~million~~per share, that vest over one year and expire in ~~debt financings which is reflected in~~ ~~Notes Payable~~ ~~on the balance sheet and previously discussed in Note 9~~ ~~– Debt~~September 2026.

ByAdditionally, the ~~end~~agreements (i) provide these officers with additional grants on each anniversary of ~~2019, GenCanna had not paid~~ the ~~amount it owed~~effective date of the ~~Company for its seed purchases due to several challenges it faced late~~agreements in the ~~year, including defaults under its senior credit facility, a fire at its main processing and lab facility, the domestic decline of CBD selling prices, and the contraction~~sole discretion of the ~~cannabis capital markets. In February 2020, as previously discussed in Note 4 –~~ ~~Investments~~~~, under pressure from certain of its creditors, the GenCanna Debtors agreed~~Company’s Compensation Committee, and contain covenants not to ~~convert a previously-filed involuntary bankruptcy proceeding into a voluntary Chapter 11 proceeding,~~compete, non-solicitation provisions, and ~~filed voluntary petitions under Chapter 11 in the Bankruptcy Court.~~

~~As required by the relevant accounting guidance, the Company initially recorded the $33.2~~ ~~million due from GenCanna as a related party receivable, with approximately $29.0~~ ~~million recognized as related party revenue,~~termination obligations, among other terms and ~~approximately $4.2~~ ~~million classified as unearned revenue (such amount representing the Company’s~~ ~~33.5%~~ ownership portion of the profit on these transactions, which was to have been recognized as revenue upon payment by GenCanna). As a result of GenCanna’s Chapter 11 proceedings, the Company fully reserved the receivable balance of approximately $~~29.0~~ ~~million and wrote off the entire unearned revenue balance of approximately $4.2~~ ~~million.~~conditions.

In ~~2019,~~July 2021, the Company granted ~~five-year~~five-year optionsto purchase up to 100,000shares of common stock to each of the Company’s three independent board members at an exercise price of $~~0.99~~0.88 per share.

In April 2020, the Company issued options to purchase up to 50,000 shares of common stock to its COO, with an exercise price of $0.30 per share and expiring three years from grant date. The ~~aggregate~~ fair value of these options of approximately $~~191,000~~ 6,000was fu~~lly amortized at March 31, 2020.~~charged to compensation expense over the annual vesting period. No options were ~~granted~~issued to related parties ~~during the nine months ended September 30, 2020.~~in 2021.

In ~~2019,~~2020, options to purchase an aggregate of ~~200,000~~ ~~and~~ ~~132,499~~550,000 shares of common stock were exercised by the Company’s CEO, CFO, and an independent board member ~~respectively,~~ at ~~weighted average~~ exercise prices of $~~0.11~~0.13 and $~~0.08~~0.14 per ~~share, respectively. The independent board member’s options were exercised on a cashless basis with the exercise prices paid via the surrender of 3,108 shares of common stock.~~share. No options were exercised by related parties ~~during the nine months ended September 30, 2020.~~

~~In 2019, options to purchase~~ ~~117,501~~ ~~shares of common stock were forfeited by board members. No options were forfeited by related parties during the nine months ended September 30, 2020.~~in 2021.

The Company’s ~~current~~ corporate offices are leased from ~~a company owned by a related party under a~~ ~~10-year~~an entity in which the Company’s CFO has an investment interest. This lease ~~that commenced August 2018~~ expires in October 2028 and contains a five-year extension option. ~~During~~In each of the ~~nine months~~nine-month periods ended September 30, ~~2020~~2021 and ~~2019,~~2020, expenses incurred under this lease approximated $117,000.

The Company procures nutrients, lab equipment, cultivation supplies, furniture, and tools from an entity owned by the family of the Company’s COO. The aggregate purchases from this entity in the nine months ended September 30, 2021 and 2020 approximated $3.8 million and $1.8 million, respectively.

The Company pays royalties on the revenue generated from its Betty’s Eddies® product line to an entity owned by the Company’s COO and its SVP of Sales under a royalty agreement. This agreement was amended effective January 1, 2021 whereby, among other modifications, the royalty percentage changed from 2.5% on all sales of Betty’s Eddies® products to (i) 3.0% and 10.0% of wholesale sales of existing products within the product line if sold directly by the Company, or licensed by the Company for sale by third-parties, respectively, and (ii) 0.5% and 1.0% of wholesale sales of future developed products within the product line if sold directly by the Company, or licensed by the Company for sale by third-parties, respectively. The aggregate royalties due to this entity in ~~both periods.~~the nine months ended September 30, 2021 and 2020 approximated $210,000 and $275,000, respectively.

In the nine months ended September 30, 2021 and 2020, one of the Company’s majority owned subsidiaries paid aggregate distributions of approximately $34,000 and $40,000, respectively, to the Company’s CEO and CFO, who own minority equity interests in such subsidiary. In the nine months ended September 30, 2021, another of the Company’s majority owned subsidiaries paid distributions of approximately $4,000 to a current employee who owns a minority equity interest in such subsidiary.

In the nine months ended September 30, 2021 and 2020, the Company purchased fixed assets and consulting services of approximately $723,000 and $455,000, respectively, in the aggregate from two entities owned by two of the Company’s general managers.

In the nine months ended September 30, 2021 and 2020, the Company purchased fixed assets of approximately $438,000 and $176,000 from an entity owned by an employee.

The balance of Due To Related Parties at ~~September 30, 2020 and~~ December 31, ~~2019~~2020 of approximately $~~1,233,000~~ 1.2~~and $1,455,000, respectively, were~~ million was comprised of amounts owed of approximately (i) $~~515~~460,000~~,000 and~~ to the Company’s CEO, (ii) $~~420~~653,000~~,000, respectively,~~ to entities owned by the Company’s CEO and CFO, ~~(ii) $673,000~~ ~~and $990,000, respectively, to companies partially owned by these officers,~~ and (iii) $4545,000~~,000 in both periods~~ to a stockholder of the Company. ~~Such~~All amounts owed ~~are not subject to repayment schedules.~~were repaid in March 2021.

~~Both of the~~The Company’s mortgages with Bank of New England, ~~discussed in Note 9~~ ~~– Debt,~~ ~~as well as the mortgage with Commonwealth Real Estate Ventures LLC disclosed in Note 19 –~~ ~~Subsequent Events,~~DuQuoin State Bank, and South Porte Bank are personally guaranteed by the Company’s CEO and CFO.

The Company is the lessee under ~~five~~six operating leasesand four finance leases. These leases contain rent holidays and customary escalations of lease payments for the type of facilities being leased. The Company recognizes rent expense on a straight-line basis over the expected lease term, including cancelable option periods which the Company fully expects to exercise. Certain leases require the payment of property taxes, insurance and/or maintenance costs in addition to the rent payments.

The Company leases machinery and office equipment under finance leases that expire in February 2022 through June 2024 with such terms being a major part of the economic useful life of the leased property.

The components of lease expense for the nine months ended September 30, ~~2020~~2021 were as follows:


Operating lease cost	$	737,993	$	820,607

Finance lease cost:
Amortization of right-of-use assets	$	24,512	$	24,512
Interest on lease liabilities		5,834		4,051
Total finance lease cost	$	30,346	$	28,563

The weighted average remaining lease term for operating leases is ~~8.7~~7.6 years, and for the finance ~~lease~~leases is ~~3.0~~2.2 years. The weighted average discount rate used to determine the right-of-use assets and lease liabilities was between ~~7.5%~~7.5% to 12% for all leases.

Future minimum lease payments as of September 30, ~~2020~~2021 under all non-cancelable leases having an initial or remaining term of more than one year were:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER ALL NON-CANCELABLE OPERATING LEASES

	Operating Leases			Finance Lease			Operating Leases			Finance Leases
2020	$	246,937		$	9,603
2021		1,008,227			38,412		$	282,673		$	9,603
2022		949,535			27,123			1,071,079			27,123
2023		910,166			23,201			1,035,017			23,201
2024		835,411			3,229			963,589			3,229
2025								936,947			-
Thereafter		4,267,635			-			3,468,041			-
Total lease payments		8,217,911			101,568			7,757,344		$	63,156
Less: imputed interest		(2,248,157	)		(10,718	)		(1,942,403	)		(5,012	)
	$	5,969,754		$	90,850		$	5,814,941		$	58,144

An employment agreement which commenced in 2012 with Thomas Kidrin, the former CEO of the Company, ~~that provided Mr. Kidrin with salary, car allowances, stock options, life insurance, and other employee benefits,~~ was terminated by the Company in 2017. ~~At September 30, 2020 and December 31, 2019,~~Since the termination date, the Company had maintained an accrual of approximately $1,043,000for any amounts that may be owed under this ~~agreement, although the Company contends that such agreement is not valid and that no amount is due.~~agreement.

In July 2019, Mr. Kidrin, also a former director of the Company, filed a complaint in the Massachusetts Superior Court, ~~that alleges~~which alleged the Company failed to pay all wages owed to him and breached the employment agreement, and ~~requests~~requested multiple damages, attorney fees, costs, and interest. The Company ~~has~~ moved to dismiss certain counts of the complaint and ~~has~~ asserted counterclaims against Mr. Kidrin alleging breach of contract, breach of fiduciary duty, money had and received, and unjust enrichment. ~~The~~

While the Company’s motion to dismiss was pending, the parties entered into a settlement agreement and general release in August 2021 whereby, among other conditions, (i) Mr. Kidrin’s complaint was dismissed with prejudice, (ii) the Company ~~believes that~~issued to Mr. Kidrin five-year warrants to purchase up to 1,000,000 shares of the ~~allegations~~Company’s common stock at an exercise price of $0.50 per share, (iii) the Company irrevocably transferred intangible assets relating to the online virtual worlds business the Company had conducted in early 2014, prior to its pivot into the ~~complaint are without merit~~legal cannabis industry (such assets had zero carrying value on the Company’s balance sheet), and ~~intends~~(iv) each party released and discharged the other from all claims, losses, and liabilities.

In August 2021, the fair value of the warrants of approximately $776,000 was charged to ~~vigorously defend this matter~~compensation expense, and ~~prosecute~~the Company reversed its ~~counterclaims.~~accrual of approximately $1,043,000

As previously disclosed in Note 3 – Acquisitions, Kind has sought to renege on the ~~sellers~~parties’ original agreement to a partnership/joint venture made in the fall of Kind have attempted to renegotiate the terms of the MOU, alleging that the MOU is not an enforceable agreement, despite the MOU containing all the definitive material terms with respect to the acquisition transaction2016 and ~~confirming the management and lease agreements.~~subsequent MOU. The Company engaged with the ~~sellers~~members of Kind in a good faith in an attempt to reach updated terms acceptable to both parties, ~~but~~however the ~~non-reciprocation~~members of ~~the sellers resulted~~Kind failed to reciprocate in good faith, resulting in an impasse. Incrementally, both parties through counsel further sought to resolve the impasse, ~~and~~however such initiative resulted in both parties commencing legal proceedings.

OnIn November ~~13,~~ 2019, Kind ~~Therapeutics USA Inc. (“Kind”)~~ commenced an action by filing a complaint against the Company in the Circuit Court for Washington County, MD captioned Kind Therapeutics USA, Inc. vs. MariMed, Inc., et al. (Case No. C-21-CV-19-000670) ~~asserting claims against the Company, including~~(the “Complaint”). The Complaint, as amended, alleges breach of contract, breach of fiduciary duty, ~~accounting, and~~ unjust enrichment, intentional misrepresentation, rescission, civil conspiracy, and seeking an accounting and declaratory judgment and damages in excess of $75,000 (the court has subsequently dismissed Kind’s claims for declaratory judgment on the lease, rescission of the lease, and civil conspiracy). On November 15, 2019, the Company filed counterclaims against Kind and a third-party complaint against the ~~Members~~members of Kind (Jennifer DiPietro, Susan Zimmerman, and Sophia Leonard-Burns) and William Tham (the ~~“Counterclaim”~~“Counterclaims”). The ~~Counterclaim alleged~~Counterclaims, as amended, allege breach of contract with respect to each of the partnership/joint venture agreement, the MOU, the MSA, the Lease, and the ~~Management~~Licensing and Manufacturing Agreement ~~(the “MSA”~~(“LMA”), unjust enrichment, promissory estoppel/detrimental reliance, ~~and~~ fraud in the inducement, breach of fiduciary duty, and ~~seeking~~seeks reformation of the MSA, a declaratory ~~judgement that~~judgment regarding enforceability of the partnership/joint venture arrangement and/or the MOU, ~~is an enforceable contract,~~ specific performance of ~~such contact,~~the parties’ various contracts, and the establishment of a constructive trust for the Company’s benefit. The ~~Counterclaim~~Counterclaims also ~~seeks~~seek damages.

~~Both~~At the time the Complaint and Counterclaims were filed, both parties, MariMed (including MariMed Holdings MD LLC and MariMed Advisors Inc.) and Kind, brought motions for a temporary restraining order and a preliminary injunction. By Opinion and Order entered on November 21, 2019, the Court denied both parties motions for a temporary restraining order. In its opinion, the Court specifically noted that, contrary to Kind’s allegations, the MSA and the ~~20-year lease agreementfor Kind’s utilization of the Company’s cultivation and production facility (the “Lease”)~~Lease “appear to be independent, valid and enforceable contracts.”

~~On or about April 3,~~A hearing on the parties’ cross-motions for preliminary injunction was held in September 2020 and November 2020. Also in November 2020, the Court granted the Company’s motion for summary judgment as to the Lease, determining that the Lease is valid and enforceable. Based on this ruling, the Company ~~filed its First Amended Counterclaim~~is seeking judgment at trial in the amount of approximately $5.4 million for past due rent and ~~Third Party Complaint in which additional claims were added and clarified, including breach of Lease and breach~~expenses owed by Kind under the Lease.

In December 2020, the Court entered a Preliminary Injunction Order, accompanied by a Memorandum Opinion, denying Kind’s motion for a preliminary injunction (which Kind had withdrawn at the conclusion of the ~~Licensing~~hearing) and ~~Manufacturing Agreement (the “LMA”) against Kind, along with other alternative claims and seeking damages. On August 11, 2020,~~granting the Company’s request for preliminary injunction. The Court determined that the Company ~~filed~~is likely to succeed with respect to the validity and enforceability of the MSA and the LMA, that the Company would suffer substantial and irreparable harm without the preliminary injunction, and that the balance of convenience and public interest both warranted the issuance of a preliminary injunction in the Company’s favor. The Court ordered, inter alia, that the MSA and LMA are in effect pending judgment after trial on the merits, and that Kind and its ~~Second Amended Counterclaim~~members, and ~~Third Party Complaint~~their attorneys, agents, employees, and representatives, are prohibited from (a) interfering with the Company’s duties and responsibilities under the MSA and (b) withdrawing funds, making any distribution, paying any loans, returning any capital, or making any payment towards a debt from any Kind bank or other financial account(s) without written consent of the Company or Order of the Court, thereby preserving the Company’s management of Kind’s operations and finances at least through the jury trial currently scheduled to begin on March 28, 2022. Further, the Court ordered Kind to pay management and licensing fees to the Company beginning January 1, 2021. Kind has noted an appeal of the Order to the Maryland Court of Special Appeals, which is pending; however, the preliminary injunction order remains in ~~which additional clarifications were made~~effect.

In addition to the favorable rulings on the Lease, MSA, and ~~claims added for breach of fiduciary duty and breach of partnership. The~~LMA, the Company believes that its claims ~~for breach of contract~~ with respect to the ~~MOU, the MSA, the Lease, and the LMA, as well as all other claims~~70%/30% partnership/joint venture agreement are meritorious. Further, the Company believes that Kind’s claims against the Company are without merit. On March 18, 2021, the Court issued an opinion and order on Kind’s motion for summary judgment finding that the MOU was not enforceable by the Company against Kind as a final binding agreement. The Company is evaluating an appeal of this ruling which under Maryland rules can only be pursued upon final judgment.

In March 2021, the Kind parties filed motions to modify the preliminary injunction order or, alternatively, for direction from the Court based on Kind’s claim to have terminated the MSA. In September 2021, the court denied the motion to modify the preliminary injunction and granted, in part, the motion for direction, but only with respect to Kind’s request to pay litigation costs. The preliminary injunction remains in full effect, and the Company has filed a petition for civil contempt against the Kind parties for interfering with the Company’s management of Kind. The contempt petition is currently pending.

The Company intends to aggressively prosecute and defend the action. Trial has been scheduled from March 28, 2022 to April 11, 2022.

In ~~light~~August 2020, Jennifer DiPietro, directly and derivatively on behalf of Mari Holdings MD LLC (“Mari-MD”) and Mia Development LLC (“Mia”), commenced a suit against the Company’s CEO, CFO, and wholly-owned subsidiary MariMed Advisors Inc. (“MMA”), in Suffolk Superior Court, Massachusetts.

In this action, DiPietro, a party to prior ongoing litigation in Maryland involving the Company and Kind as discussed above, brings claims for breach of fiduciary duty, breach of contract, fraud in the inducement, aiding and abetting the alleged breach of fiduciary duty, and also seeks access to books and records and an accounting related to her investments in Mari-MD and Mia. DiPietro seeks unspecified money damages and rescission of her interest in Mari-MD, but not of her investment in Mia, which has ~~not~~provided substantial returns to her as a member.

The Company has answered the complaint and MMA filed counterclaims against DiPietro on its own behalf and derivatively on behalf of Mari-MD for breach of her fiduciary duties to each of those entities, and for tortious interference with Mari-MD’s lease and MMA’s management services agreement with Kind.

The Company believes that the allegations of the complaint are without merit and intends to defend the case vigorously. The Company’s counterclaim seeks monetary damages from DiPietro, including the Company’s legal fees in the Kind action.

During 2019, the Company’s MMH subsidiary sold and delivered hemp seed inventory to GenCanna Global Inc., a Kentucky-based cultivator, producer, and distributor of hemp (“GenCanna”). At the time of sale, the Company owned a 33.5% ownership interest in GenCanna. The Company recorded ~~management fees charged to Kind~~a related party receivable of approximately $~~1.1~~ 29.0million ~~for~~from the ~~nine months ended September 30, 2020. A hearing~~sale, which was fully reserved on December 31, 2019.

In February 2020, GenCanna USA, GenCanna’s wholly-owned operating subsidiary, under pressure from certain of its creditors including MGG Investment Group LP, GenCanna’s senior lender (“MGG”), agreed to convert a previously-filed involuntary bankruptcy proceeding with the ~~parties’ cross-motions for preliminary injunction was held on September 14~~U.S. Bankruptcy Court in the Eastern District of Kentucky (the “Bankruptcy Court”) into a voluntary Chapter 11 proceeding. In addition, GenCanna and GenCanna USA’s subsidiary, Hemp Kentucky LLC (collectively with GenCanna and GenCanna USA, the “GenCanna Debtors”), filed voluntary petitions under Chapter 11 in the Bankruptcy Court.

In May 2020, after an abbreviated solicitation/bid/sale process, the Bankruptcy Court, over numerous objections by creditors and shareholders of the GenCanna Debtors which included the Company, entered an order authorizing the sale of all or substantially all of the assets of the GenCanna Debtors to ~~17, 2020~~MGG. After the consummation of the sale of all or substantially all of their assets and ~~November 2~~business, the GenCanna Debtors n/k/a OGGUSA, Inc. and ~~4, 2020,~~OGG, Inc. (the “OGGUSA Debtors”) filed their liquidating plan of reorganization (the “Liquidating Plan”) to collect various prepetition payments and commercial claims against third parties, liquidate the remaining assets of the ODDUSA Debtors, and make payments to creditors. The Company and the ~~Court’s ruling on~~unsecured creditors committee filed objections to such Liquidating Plan, including opposition to the ~~motions~~release of litigation against the OGGUSA Debtors’ senior lender, MGG, for lender liability, equitable subordination, and return of preference. As a part of such plan confirmation process, the OGGUSA Debtors filed various objections to proofs of claims filed by various creditors, including the proof of claim in the amount of approximately $33.6 million filed by the Company. Through intense and lengthy negotiations with the OGGUSA Debtors and the unsecured creditors committee regarding the objections to the Liquidating Plan, the Company reached an agreement with the OGGUSA Debtors to withdraw the objections to the Company’s claim and to have it approved by the Bankruptcy Court as a general unsecured claim in the amount of $31.0 million.

Since the approval of the Liquidating Plan, the OGGUSA Debtors have been in the process of liquidating the remaining assets, negotiating and prosecuting objections to other creditors’ claims, and pursuing the collection of accounts receivable and Chapter 5 bankruptcy avoidance claims. As of the date of this filing, there is ~~pending. The trial is currently scheduled~~insufficient information as to ~~start on June 7, 2021.~~what portion, if any, of the Company’s allowed claim will be paid upon the completion of the liquidation of the remaining assets of the OGGUSA Debtors.

In September 2021, MD Global Partners LLC (“MDGP”) filed an action in the Supreme Court of the State of New York alleging breach of contract. This matter was settled in October 2021 as disclosed in Note 21 – Subsequent Events.

In October 2021, the Company entered into a settlement agreement with and obtained a general release from MDGP whereby the Company paid $150,000 to resolve the action filed by MDGP as previously disclosed in Note 20 – Commitments and Contingencies.

~~In October 2020, the holder of the $21M Debentures converted an aggregate of approximately $1,259,000~~ ~~of principal and accrued interest into~~ ~~10,653,600~~ ~~shares of common stock at conversion prices of $0.11~~ ~~and $0.12~~ ~~per share.~~

In October ~~2020, as previously discussed~~and November 2021, the Noteholder of the $3.2M Note converted $475,000 of principal in ~~Note 9 –~~ ~~Debt~~,the aggregate into 1,357,143 shares of the Company’s common stock. Such conversions were effected in accordance with the terms of the note agreement, and therefore the Company ~~and~~was not required to record a gain or loss upon the ~~Holding Party entered into the Second Extension Agreement whereby the~~ ~~Company (i) paid, in October 2020, $~~1 ~~million of principal and all outstanding accrued interest of approximately $333,000~~ ~~on the $6.8M Note, (ii) issued the $5.8M Note, which replaced the $6.8M Note, and the New $3M Note, both with maturity dates in~~ ~~September 2022~~.conversions.

In October ~~2020,~~2021, the Company ~~entered into a $~~granted its CEO, CFO, and COO options to purchase up to ~~1.3~~ 5,000,000, 5,000,000, and ~~million mortgage agreement with Commonwealth Real Estate Ventures LLC. The mortgage is secured by~~1,250,000 shares, respectively, of the Company’s ~~properties~~common stock, at an exercise price of $0.90 per share, that vest over one year and expire in ~~Illinois, and requires interest-only monthly payments at a rate of~~ ~~15%~~ ~~per annum through its maturity date in~~ ~~October 2021. The mortgage contained an origination charge of~~ 1% ~~of the principal balance. Repayment of the mortgage is personally guaranteed by the Company’s CEO and CFO.~~September 2026.

shares of common stock were exercised at an exercise price of $0.14 per share, (ii) options to purchase 110,000 shares of common stock were forfeited, (iii) warrants to purchase 1,201,163 shares of common stock were forfeited, and (iv) 202,204 shares of common stock that were classified under Common Stock ~~Issuance Obligations~~Subscribed But Not Issued on the balance sheet at September 30, 2021, as discussed in Note 14 – Stockholders’ Equity, were issued.

~~In October 2020, the Company issued~~ ~~33,319~~ ~~shares of common stock in connection with the stock grant to a current employee previously disclosed in Note 12 –~~ ~~Stockholders’ Equity.~~

Item 2. Management’s Discussions and Analysis of Financial Condition and Results of Operations

When used in this form 10-Q and in future filings by the Company with the Commission, the words or phrases such as “anticipate,” “believe,” “could,” “should,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on any such forward looking statements, each of which speak only as of the date made. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company has no obligation to publicly release the result of any revisions which may be made to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different. These factors include, but are not limited to, changes that may occur to general economic and business conditions; changes in current pricing levels that we can charge for our services or which we pay to our suppliers and business partners; changes in political, social and economic conditions in the jurisdictions in which we operate; changes to laws and regulations that pertain to our products and operations; and increased competition.

The following discussion should be read in conjunction with the unaudited financial statements and related notes which are included under Item 1 of this report.

We do not undertake to update our forward-looking statements or risk factors to reflect future events or circumstances.

MariMed Inc. (the “Company”) is a multi-state operator in the United States cannabis industry. The Company develops, operates, manages, and optimizes over 300,000 square feet of state-of-the-art, regulatory-compliant facilities for the cultivation, production and dispensing of medicinal and recreational cannabis. The Company also licenses its proprietary brands of cannabis and hemp-infused products, along with other top brands, in several domestic markets and overseas.

Upon its entry into the cannabis industry in 2014, the Company was an advisory firm that procured state-issued cannabis licenses on behalf of its clients, ~~leased its~~developed cannabis facilities which it leased to these newly-licensed companies, and provided industry-leading expertise and oversight in all aspects of their cannabis operations. The Company also provided its clients with as ongoing regulatory, accounting, real estate, human resources, and administrative services.

~~A goal in completing~~high-growth states. Core to this transition is tothe acquisition and consolidation of the Company’s clients (the “Consolidation Plan”). Among several benefits, the Consolidation Plan would present a simpler, more transparent financial picture of the full breadth of the Company’s efforts, with a clearer representation of the revenues, earnings, and other financial metrics the Company has generated for its clients. The Company has played a key role in the successes of these entities, from the securing of their cannabis licenses, to the development of facilities that are models of excellence, to funding their operations, and to providing operational and corporate guidance. Accordingly, the Company believes it is well suited to own these facilities and manage the continuing growth of their operations.

To date, acquisitions of ~~the licensed~~its client businesses in Massachusetts and Illinois have been ~~state-approved and~~ completed and ~~establishes~~establish the Company as a fully integrated seed-to-sale multi-state operator (“MSO”). The acquisitions of the remaining entities located in Maryland, Nevada, and Delaware are at various stages of completion and subject to each state’s laws governing the ownership ~~and~~ transfer of cannabis licenses, which in the case of Delaware requires a modification of current cannabis ownership laws to permit for-profit ownership. Meanwhile, the Company continues to expand these businesses and maximize the Company’s revenue from rental income, management fees, and licensing royalties.

The transition to a fully integrated MSO is part of a strategic growth plan (the “Strategic Growth Plan”) the Company is implementing to drive its revenues and profitability. The Strategic Growth Plan has four components: (i) complete the Consolidation Plan, (ii) increase revenues in existing states, by spending capital to increase the Company’s cultivation and production capacity, and develop additional assets within those states, (iii) expand the Company’s footprint in additional legal cannabis states through new applications and acquisitions of existing cannabis businesses, and (iv) optimize the Company’s brand portfolio and licensing revenue, by creating products that meet specific customer needs, and ~~business~~distributing these products in ~~these~~ states ~~and plans to leverage its success to expand into other markets~~ where cannabis ~~is and becomes legal.~~has been legalized.

~~The~~As to its products, the Company has ~~also~~ created its own brands of cannabis flower, concentrates, and precision-dosed products utilizing proprietary strains and formulations. These products are developed by the Company in cooperation with state-licensed operators who meet the Company’s strict standards, including all natural—not artificial or synthetic—ingredients. The Company licenses its brands and product formulations only to certified manufacturing professionals who follow state cannabis laws and adhere to the Company’s precise scientific formulations and trademarked product recipes.

The ~~Company’s branded~~Company utilizes proprietary cannabis genetics to produce high-quality flowers and concentrates under the award-winning³ Nature’s Heritage™ brand, and cannabis-infused products ~~are licensed~~ under the brand names ~~including~~ Kalm ~~Fusion™~~Fusion®, ~~Nature’s Heritage™, and Betty’s Eddies™, and are distributed~~ in the form of ~~dissolvable strips,~~chewable tablets ~~powders, microwaveable popcorn,~~and drink powder mixes, and the award-winning¹Betty’s Eddies® brand of all natural fruit ~~chews,~~chews. Both cannabis-infused brands are top-selling products in Maryland and ~~other varieties~~Massachusetts²and the Company intends to continue to introduce additional product lines under these brands in ~~development.~~ the foreseeable future.

The Company also has exclusive ~~sublicensing~~alliances with prominent brands. The Company has partnered with renown ice cream maker Emack & Bolio’s® to create a line-up of cannabis-infused vegan and dairy ice cream. Additionally, the Company has secured distribution rights ~~in certain states to distribute~~for the Binske® line of cannabis products crafted from premium artisan ingredients, the Healer™ line of medical full-spectrum cannabis tinctures, and the ~~clinically tested~~clinically-tested medicinal cannabis strains developed in Israel by global medical cannabis research pioneer Tikun Olam™. The Company’s hemp division distributes hemp-derived CBD products, including its Florance™ brand, in the US and abroad. The Company intends to continue licensing and distributing its brands as well as other top brands in the Company’s current markets and in additional legal markets worldwide.

In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic. The spread of the virus in the United States and the measures implemented to contain it—including business shutdowns, indoor capacity restrictions, social distancing, and diminished travel—have negatively impacted the economy and have created significant volatility and disruption in financial markets. Consequently, the Company’s expansion efforts and implementation of its strategic plan have been delayed. Additionally, while the cannabis industry has been deemed an essential business, and is not expected to suffer severe declines in revenue, the Company’s business, operations, financial condition, and liquidity have been adversely affected, as further discussed in the notes accompanying the financial statements and within this ~~Management’s Discussions and Analysis of Financial Condition and Results of Operations~~.

The Company’s revenues are ~~currently~~primarily comprised of the following ~~primary~~ categories:

~~At September 30, 2020,~~The Company produced significant improvements to its liquidity in the Company had cash and cash equivalents of approximately $2.3 million and negative working capital of approximately $9.1 million, compared to cash and cash equivalents of approximately $739,000 and negative working capital of approximately $29.3 million at December 31, 2019.reported periods:

~~The Company produced the following improvements to key liquidity metrics during the reported period:~~

The large negative working capital balance at December 31, 2019 was primarily caused by GenCanna’s bankruptcy proceeding under Chapter 11 initiated in early 2020, the details of which are disclosed in the footnotes accompanying the Company financial statements included in this report. Prior to the commencement of these bankruptcy proceedings, during the period March 2019 to June 2019, the Company raised $17.0 million via the issuance of promissory notes to three unaffiliated third parties (the “Seed Funding Notes”). The proceeds from the Seed Funding Notes were used to fund the purchase of large quantities of top-grade hemp seeds at volume discounts which were then sold to GenCanna at market rates (the “Seed Transactions”). The Seed Funding Notes were committed to be repaid by the end of calendar 2019 utilizing a portion of the approximate $29.0 million of revenue to be generated from the Seed Transactions. Upon the commencement of the GenCanna bankruptcy proceedings, the Company recorded a bad debt reserve at December 31, 2019 against the entire $29.0 million receivable balance from GenCanna.

~~Also contributing to~~The aforementioned improvements were primarily the ~~large negative working capital balance at December 31, 2019 were the additional bad debt reserves recorded by the Company on such date~~result of ~~$11.2 million against the working capital and receivable balances due from Kind,~~(i) increases in light of the pending litigation between the Company and Kind, and $2.2 million against the working capital and receivable balances due from Harvest, based on the impact of the COVID-19 pandemic on Harvest’s operations.

During 2020, the Company (i) successfully extended the maturity dates of all of the Seed Funding Notes, (i) converted $802,000 of accrued interest on the Seed Funding Notes into shares of the Company’s common stock, and (iii) paid down $4,450,000 of principal and accrued interest of the Seed Funding Notes with proceeds from newly-issued long-term debt and cash generated from operations. These actions, coupled with the continuing growthrevenues and profitability ofgenerated by the Company’s cannabis operations in the states of Illinois and ~~Maryland,~~Massachusetts, acquired as part of the Company’s Consolidation Plan to transition from a consulting business to a direct owner of cannabis licenses and ~~offset~~operator of seed-to-sale operations, and (ii) $23.0 million of gross proceeds raised by the ~~continued reserves on amounts due from GenCanna, Kind,~~Company under a financing facility of up to $46.0 million pursuant to a securities purchase agreement with Hadron Healthcare Master Fund (“Hadron”) in exchange for newly-designated Series C convertible preferred stock and ~~Harvest, resulted in a negative working capital balance of $9.1 million at September 30, 2020, an improvement from December 31, 2019 of approximately $20.2 million.~~warrants.

The approximate $1.5 million increase in cash and cash equivalents from December 31, 2019 to September 30, 2020 was primarily attributable to the proceeds from the Refinanced Mortgage, the $4.4M Notes, the Third Party Notes, and the $1M Note as discussed in Note 9 – ~~Debt~~ of the Company’s financial statements, coupled with the continuing growth in profitability of the Company’s cannabis operations in Illinois and Massachusetts as explained below, offset primarily by the buildup of inventory balances and the purchase of property and equipment.

With respect to the Company’s consolidation plan, the operations of the acquired entities in Illinois and Massachusetts have started to generate considerable liquidity and working capital for the Company. Since their acquisition in October 2019, the KPGs in Illinois have generated in excess of $4.6 million of pretax income for the Company, which continues to exceed forecasts, in part due to the legalization of adult-use cannabis in this state in January 2020. Additionally, the ~~KPGs added a third dispensary in Mt. Vernon~~section below entitled Non-GAAP Measurement discusses an additional financial measure not defined by GAAP which commenced operations in September 2020. In Massachusetts, the cultivation and production facility acquired by the Company in December 2018 has ramped up its grow capabilities to full capacity. Additionally, the Company received final approval for adult-use cannabis production and sales from the Massachusetts Cannabis Control Commission, and commenced business in this state’s robust adult-use market in September 2020.

~~In connection with the preparation of its financial statements for the nine months ended September 30, 2020,~~ the Company’s management ~~evaluated the Company’s ability~~uses to ~~continue as a going concern in accordance with ASU 2014-15,~~ ~~Presentation of Financial Statements–Going Concern (Subtopic 205-40)~~, which requires an assessment of relevant conditions or events, considered in the aggregate, that are known or reasonably knowable by management on the issuance dates of the financial statements which indicate the probable likelihood that the Company will be unable to meet its obligations as they become due within one year after the issuance date of the financial statements.evaluate liquidity.

Net cash provided by operating activities ~~for~~in the nine months ended September 30, ~~2020~~2021 approximated ~~$1.6~~$28.2 million, compared to ~~net cash used~~approximately $1.6 million in ~~operating activities of approximately $24.2 million for~~ the same period in ~~2019.~~2020. The year-over-year improvement was primarily attributable to ~~(i)~~ the increase in cannabis-derived profits ~~in 2020~~ generated by the ~~acquisition of the KPGs~~acquired operations in Illinois and ARL in Massachusetts, (ii) the intentional slowing of payments of trade accounts payable and other liabilities in 2020, and (iii) the large purchase of hemp seeds in 2019 as part of the Seed Transactions, offset by higher cannabis inventory in 2020.Massachusetts.

Net cash used in investing activities ~~for~~in the nine months ended September 30, ~~2020~~2021 approximated ~~$3.9~~$13.7 million, compared to approximately ~~$9.3~~$3.9 million ~~for~~in the same period in ~~2019.~~2020. The ~~year-over-year decrease in the use of cash~~increase was due to (i) development of the ~~investments~~Company’s facilities in ~~Atalo, Healer, MHWC,~~Milford, DE, Mt. Vernon, IL, Metropolis, IL, (ii) improvements to existing facilities in Massachusetts, Maryland, Illinois, and ~~MediTaurus made in 2019. No similar investments were made in 2020. The year-over-year decrease is also due~~Delaware, and (iii) amounts paid to ~~reduced property~~renew cannabis licenses, offset by proceeds from (x) notes receivable and ~~equipment purchases in 2020.~~(y) the MRSVP asset sale transaction.

Net cash provided by financing activities ~~for~~in the nine months ended September 30, ~~2020~~2021 approximated ~~$3.8~~$7.7 million, compared to approximately ~~$29.5~~$3.8 million ~~for~~in the same period in ~~2019. In~~2020. The 2021 activities primarily consisted of the net proceeds of approximately $22.6 million from the aforementioned Hadron transaction and an additional mortgage from DuQuoin State Bank of $2.7 million, offset by the paydown of debt and obligations of approximately $17.4 million and distributions of approximately $301,000. The 2020 ~~the Company raised~~activities primarily consisted of debt financings of approximately $20.1 million, ~~from debt financings,~~ offset by ~~approximately $15.9 million~~paydowns of ~~promissory note and mortgage repayments, compared to~~ debt and ~~equity financings in 2019~~obligations of ~~$29.2~~approximately $16.0 million ~~in the aggregate with no repayments~~and distributions of ~~debt.~~approximately $229,000.

The remaining proceeds from the ~~aforementioned financings were used to execute on~~Hadron transaction will fund construction and upgrades of certain of the Company’s ~~strategy~~owned and managed facilities. The balance of the committed facility of up to ~~become a fully integrated multistate operator~~an additional $23.0 million is intended to fund the Company’s specific targeted acquisitions that are contracted in 2021 and consummated by the end of ~~seed-to-sale cannabis operations, to continue the development of its regulated facilities, to grow its hemp operations, to expand its branded licensing business, and for working capital purposes.~~2022.

Three months ended September 30, ~~2020~~2021 compared to three months ended September 30, ~~2019~~2020

~~Total revenues for~~Revenues in the three months ended September 30, ~~2020~~2021 approximated ~~$13.5~~$33.2 million compared to approximately ~~$11.2~~$13.5 million ~~for~~in the same period in ~~2019,~~2020, an increase of approximately ~~$2.2~~$19.7 million or ~~19.9%~~146.7%. ~~Excluding~~The year-over-year increase was primarily due to the ~~Seed Transactions, core~~nearly three-fold growth of cannabis sales to approximately $30.1 million in the current period, compared to approximately $10.8 million from the same period a year ago. This growth was attributable to sales increases of approximately (i) $11.7 million generated by the Company’s retail operations in Illinois, where the Company opened an additional dispensary in late 2020 and another in May 2021, and (ii) $4.1 million generated by the Company’s retail operations in Massachusetts, which saw a nearly ten-fold increase in customer visits year-over-year, and (iii) $3.5 million generated by the Company’s wholesale operations in Massachusetts, which saw a three-fold increase in customers. The year-over-year increase in revenues ~~for~~was also the result of continued improvement in real estate rentals, management fees, and supply procurement revenue primarily from increased business with the Company’s clients in Delaware and Maryland.

Cost of revenues in the three months ended September 30, ~~2020 grew~~2021 approximated $15.0 million compared to approximately ~~$13.5~~$4.8 million ~~from approximately $4.2 million for~~in the same period in ~~2019,~~2020, an increase of approximately $9.3 million or 219.8%. The year-over-year increase was due to aggregate cannabis sales during the quarter ended September 30, 2020 of approximately $10.8 million generated by the KPGs in Illinois, acquired by the Company in October 2019, and ARL in Massachusetts, acquired by the Company in late 2018 and whose selling operations commenced in December 2019. The cannabis sales were offset by decreases in procurement revenue and management fees charged to Kind, the Company’s cannabis-licensed client in Maryland, and with whom the Company is currently engaged in litigation.

Cost of revenues for the three months ended September 30, 2020 approximated $4.8 million compared to approximately $6.5 million for the same period in 2019, a decrease of approximately $1.7 million or 26.7%.$10.2 million. The year-over-year variance was primarily attributable to the ~~cost of seeds incurred by the Company during the quarter ended September 30, 2019 of approximately $5.0 million as part of the Seed Transactions. Excluding the Seed Transactions, cost~~higher level of revenues ~~for~~as these costs are largely variable in nature and fluctuate in step with revenues. As a percentage of revenues, these costs increased to 45.3% in the three months ended September 30, ~~2020 increased to approximately $4.0 million~~2021 from ~~approximately $1.5 million for~~35.5% in the same period in ~~2019.~~2020, primarily due to the change in the relative mix of revenue categories in each period. Specifically, in the three months ended September 30, 2021, (a) 90.6% of revenues were comprised of product sales, which historically have had corresponding cost of revenue of approximately 45.0% to 50.0%, and (b) 7.3% of revenues were comprised of real estate rentals and management fees, which have no corresponding cost of revenue. This compares to revenues in the same period in 2020 that were comprised of (x) 80.0% of product sales and (y) 14.2% of real estate rentals and management fees. While the cost rate is higher for product sales, the level of product sales the Company can potentially generate is several multiples higher than the level of real estate rentals and management fees the Company can generate, resulting in significantly higher potential gross profit dollars to be generated.

As a result of the foregoing, gross profit approximated $18.2 million, or 54.7% of revenues, in the three months ended September 30, 2021, from approximately $8.7 million, or 64.5% of revenues, in the same period in 2020.

Personnel expenses increased to approximately $1.5 million in the three months ended September 30, 2021 from approximately $1.4 million in the same period in 2020. The increase was primarily due to the hiring of additional staff to support (i) higher levels of revenue, and (ii) the Company’s expansion into a direct owner and operator of seed-to-sale cannabis businesses, offset by the reversal of an approximate $1.0 million accrual related to the Kidrin complaint which was settled in August 2021. As a percentage of ~~revenue,~~revenues, personnel expenses decreased to 4.5% (7.6% excluding the accrual reversal) in the three months ended September 30, 2021 from 10.1% in the same period in 2020.

Marketing and promotion costs increased to approximately $563,000 in the three months ended September 30, 2021 from approximately $103,000 in the same period in 2020. The increase is primarily the result of increased spending on branding and design consulting, customer loyalty programs, social media, and local outdoor advertising. As a percentage of revenues, these costs ~~remained relatively steady~~increased to 1.7% in the three months ended September 30, 2021 compared with 0.8% in the same period in 2020.

General and administrative costs increased to approximately $9.5 million in the three months ended September 30, 2021 from approximately $2.9 million in the same period in 2020. This change is primarily due to increases of approximately (i) $6.2 million of non-cash equity compensation expense associated with option grants and warrant issuances, (ii) $407,000 of facility costs from additional properties in service in 2021, and (iii) $269,000 of credit card processing fees due to increased credit card sales at ~~35.9% in 2020 and 35.9% in 2019, demonstrating~~ the Company’s ~~leveraging~~cannabis dispensaries, offset by lower professional fees. As a percentage of ~~its infrastructure~~revenues, these costs increased to ~~produce higher~~28.6% in the three months ended September 30, 2021 from 21.8% in the same period in 2020.

Bad debt expense approximated $36,000 in the three months ended September 30, 2021 compared to approximately $892,000 in the same period in 2020. The decrease is due to lower reserves required against trade accounts receivable. As a percentage of revenues, this expense decreased to 0.1% in the three months ended September 30, 2021 from 6.6% in the same period in 2020.

As a result of the foregoing, the Company generated operating income of approximately $6.6 million in the three months ended September 30, 2021 compared to approximately $3.4 million in the same period in 2020.

Net non-operating expenses decreased to approximately $487,000 in the three months ended September 30, 2021 from approximately $1.7 million in the same period in 2020. The decrease is primarily due to an approximate $1.6 million reduction of interest expense from lower levels of ~~revenue with minimal increases~~outstanding debt, offset by the gain on ~~cost~~sale of ~~revenues.~~the MRSVP investment of approximately $309,000.

As a result of the foregoing, the Company generated income before income taxes of approximately $6.1 million in the three months ended September 30, 2021, compared to approximately $1.7 million in the same period in 2020. After a tax provision of approximately $4.0 million in the three months ended September 30, 2021, net income approximated $2.1 million in the current period, compared to approximately $1.7 million in the prior period.

Nine months ended September 30, 2021 compared to nine months September 30, 2020

Revenues for the nine months ended September 30, 2021 approximated $90.4 million compared to approximately $30.5 million for the same period in 2020, an increase of approximately $59.9 million or 196.1%. The year-over-year increase was primarily attributable to the nearly four-fold growth of cannabis sales to approximately $79.8 million in the current period, compared to approximately $22.0 million from the same period a year ago. This growth was attributable to sales increases of approximately (i) $29.6 million generated by the Company’s retail operations in Illinois, where the Company opened an additional dispensary in late 2020 and another in May 2021, and also saw significant increases in sales of existing dispensaries in this state, (ii) $11.9 million generated by the Company’s retail operations in Massachusetts, which saw a 1,298.6% increase in customer visits, and (iii) $16.3 million generated by the Company’s wholesale operations in Massachusetts, which saw a year-over-year increase in customers of 245.5%. The year-over-year increase in revenues was also the result of continued improvement across all revenue categories, primarily from increased business with the Company’s clients in Delaware and Maryland.

Cost of revenues approximated $39.6 million for the nine months ended September 30, 2021 from approximately $10.8 million for the same period in 2020. The year-over-year variance was primarily attributable to the higher level of revenues as these costs are largely variable in nature and fluctuate in step with revenues. As a percentage of revenues, these costs increased to 43.8% in the nine months ended September 30, 2021 from 35.5% in the same period in 2020, primarily due to the change in the relative mix of revenue categories in each period. Specifically, in the nine months ended September 30, 2021, (a) 88.2% of revenues were comprised of product sales, which historically have had corresponding costs of revenue of approximately 45.0% to 50.0%, and (b) 8.8% of revenues were comprised of real estate rentals and management fees, which have no corresponding cost of revenue. This compares to revenues in the same period in 2020 that were comprised of (x) 72.0% of product sales and (y) 20.1% of real estate rentals and management fees. While the cost rate is higher for product sales, the level of product sales the Company can potentially generate is several multiples higher than the level of real estate rentals and management fees the Company can generate, resulting in significantly higher potential gross profit dollars to be generated.

As a result of the foregoing, gross profit approximated ~~$8.7~~$50.8 million, or ~~64.5%~~56.2% of total revenues, for the ~~three~~nine months ended September 30, ~~2020,~~2021 from approximately ~~$4.7~~$19.7 million, or ~~41.9%~~64.5% of total revenues, for the same period a year ago. Excluding the Seed Transactions, gross profit increased to approximately $8.7 million for the three months ended September 30, 2020 from approximately $2.7 million for the same period a year ago, an increase of approximately $6.0 million or 221.5%.

Personnel expenses increased to approximately ~~$1.4~~$5.3 million for the ~~three~~nine months ended September 30, ~~2020~~2021 from approximately ~~$1.2~~$4.1 million for the same period a year ago. The increase was primarily due to the hiring of additional staff to support (i) higher levels of revenue, and (ii) the Company’s expansion into a direct owner and operator of seed-to-sale cannabis ~~businesses.~~businesses, offset by the reversal of an approximate $1.0 million accrual related to the Kidrin complaint which was settled in August 2021. As a percentage of revenues, personnel expenses decreased to 5.8% (7.0% excluding the ~~Seed Transactions, personnel expenses dropped significantly~~accrual reversal) in 2021 compared to ~~10.1%~~13.3% in ~~2020 from to 29.5% in 2019.~~2020.

Marketing and promotion costs increased ~~slightly~~ to approximately ~~$103,000~~$1.1 million for the ~~three~~nine months ended September 30, ~~2020~~2021 from approximately ~~$92,000~~$281,000 for the same period a year ago. The change is primarily the result of increased spending on branding and design consulting, customer loyalty programs, social media, and local outdoor advertising. As a percentage of revenues, ~~excluding the Seed Transactions,~~ these costs ~~fell~~increased to ~~0.8%~~1.2% in ~~2020~~2021 from ~~2.2%~~0.9% in ~~2019.~~2020.

General and administrative costs increased to approximately ~~$2.9~~$16.9 million for the ~~three~~nine months ended September 30, ~~2020~~2021 from approximately ~~$2.4~~$7.5 million for the same period a year ago. This ~~increase~~change is primarily due to ~~taxes paid~~increases of approximately (i) $7.2 million in non-cash equity compensation expense associated with option grants and warrant issuances, (ii) $1.0 million in facility costs on additional properties in service in 2021, (iii) $896,000 of credit card processing fees due to a significant increase in credit card sales at the Company’s cannabis ~~operation,~~dispensaries, and ~~increases~~(iv) $351,000 in ~~corporate insurance.~~depreciation and amortization expenses from higher property, equipment, and intangibles. As a percentage of revenues, ~~excluding the Seed Transactions, these~~general and administrative costs ~~fell significantly to 21.8%~~were 18.7% in 2021 compared with 24.6% in 2020, ~~from 56.9% in 2019~~reflecting the more efficient utilization of the Company’s fixed overhead costs.

~~During~~Bad debt expense increased to approximately $1.9 million in the ~~three~~nine months ended September 30, ~~2020,~~2021 compared to approximately $1.3 million in the ~~Company~~same period in 2020. The change is due to the increase of reserves recorded ~~additional bad debt reserves~~against aging trade accounts receivable. As a percentage of ~~approximately $892,000~~revenues, this expense decreased to ~~cover potential losses that would be incurred by~~2.1% in the ~~Company~~nine months ended September 30, 2021 from 4.4% in the ~~impact of COVID-19 and the measures enacted by local governments to reduce its spread.~~same period in 2020.

As a result of the foregoing, the Company generated operating income of approximately ~~$3.4~~$25.7 million for the ~~three~~nine months ended September 30, ~~2020~~2021, compared to approximately $973,000 for the same period a year ago. Excluding the Seed Transactions, the Company generated operating income of approximately $3.4 million for the three months ended September 30, 2020 compared to an operating loss of approximately $1.0$6.5 million for the same period in ~~2019, a positive swing of approximately $4.4 million.~~2020.

Net non-operating expenses decreased to ~~$1.7~~approximately $2.6 million for the ~~three~~nine months ended September 30, ~~2020 from~~2021 compared to approximately ~~$7.4~~$8.3 million for the same period in ~~2019.~~2020. The ~~decrease~~year-over-year change is primarily due to ~~(i) a charge~~an approximate $5.5 million reduction of interest expense from lower levels of outstanding debt, coupled with an approximate $506,000 decrease in the ~~third quarter~~fair value of ~~2019~~investments, offset by the gain on sale of the MRSVP investment of approximately $2.9 million from the Company’s equity in GenCanna’s net loss (GenCanna was accounted for as an equity investment at such time), and (ii) a decrease in interest expense of approximately $2.6 million attributable to a lower amount of remaining beneficial conversion feature on the $21M Debentures that was amortized in 2020 compared to 2019.$309,000.

As a result of the foregoing, the Company generated ~~net~~ income before income taxes of approximately ~~$1.7~~$23.0 million for the ~~three~~nine months ended September 30, ~~2020.~~2021. For the same period a year ago, ~~after~~the Company incurred a loss before income taxes of approximately $1.8 million. After a tax provision of approximately ~~$901,000,~~$9.0 million in 2021, the Company ~~incurred~~generated net income of approximately $14.0 million for the nine months ended September 30, 2021 compared to a net loss of approximately ~~$7.3~~$1.8 million ~~and excluding~~for the ~~Seed Transactions, incurred~~same period in 2020, a ~~net loss~~positive swing of approximately ~~$8.4~~$15.8 million.

In addition to the financial information reflected in this report, which is prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company is providing a non-GAAP financial measurement of profitability – Adjusted EBITDA – as a supplement to the preceding discussion of the Company’s financial results.

Management defines Adjusted EBITDA as net income (loss), determined in accordance with GAAP, excluding the following:

Management believes Adjusted EBITDA is a useful measure to assess the performance and liquidity of the Company as it provides meaningful operating results by excluding the effects of expenses that are not reflective of its operating business performance. In addition, the Company’s management uses Adjusted EBITDA to understand and compare operating results across accounting periods, and for financial and operational decision making. The presentation of Adjusted EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with GAAP.

Management believes that investors and analysts benefit from considering Adjusted EBITDA in assessing the Company’s financial results and its ongoing business as it allows for meaningful comparisons and analysis of trends in the business. Adjusted EBITDA is used by many investors and analysts themselves, along with other metrics, to compare financial results across accounting periods and to those of peer companies.

As there are no standardized methods of calculating non-GAAP measurements, the Company’s calculations may differ from those used by analysts, investors, and other companies, even those within the cannabis industry, and therefore may not be directly comparable to similarly titled measures used by others.

Reconciliation of Net Income (Loss) to Adjusted EBITDA (a Non-GAAP Measurement)

The table below reconciles Net Income (Loss) to Adjusted EBITDA for the three and nine months ended September 30, ~~2019~~

Total revenues for the nine months ended September 30, 2020 approximated $30.5 million compared to $40.4 million for the same period in 2019. The year-over-year variance was primarily attributable to revenues of approximately $22.0 million generated from the Seed Transactions. Excluding the Seed Transactions, core revenues for the nine months ended September 30, 2020 grew to approximately $30.5 million from approximately $11.4 million for the same period in 2019, an increase of approximately $19.2 million or 168.3%. The year-over-year increase was due to aggregate cannabis sales in 2020 of approximately $22.0 million generated by the KPGs in Illinois, acquired by the Company in October 2019,2021 and ARL in Massachusetts, acquired by the Company in late 2018 and whose selling operations commenced in December 2019. The cannabis sales were offset by decreases in procurement revenue and management fees charged to Kind, the Company’s cannabis-licensed client in Maryland, and with whom the Company is currently engaged in litigation.2020:

Cost of revenues for the nine months ended September 30, 2020 approximated $10.8 million compared to approximately $24.5 million for the same period in 2019. The year-over-year variance was primarily attributable to the cost of seeds incurred by the Company of approximately $20.8 million as part of the Seed Transactions. Excluding the Seed Transactions, cost of revenues for the nine months ended September 30, 2020 increased to approximately $10.8 million from approximately $3.8 million for the same period in 2019. As a percentage of total revenues, these costs increased to 35.5% in 2020 from 33.2% in 2019, which is the result of Company’s transition from a cannabis advisory company to a multi-state operator of cannabis businesses, whereby the Company will generate less revenues from a rental income and management fees, which have minimal associated costs, to a vastly higher level of revenue from product sales, which have a relatively higher level of associated costs.

As a result of the foregoing, gross profit approximated $19.7 million, or 64.5% of total revenues, for the nine months ended September 30, 2020 from approximately $15.9 million, or 39.3% of total revenues, for the same period a year ago. Excluding the Seed Transactions, gross profit increased to approximately $19.7 million for the nine months ended September 30, 2020 from approximately $7.6 million for the same period a year ago, an increase of approximately $12.1 million or 159.0%.

Personnel expenses increased to approximately $4.1 million for the nine months ended September 30, 2020 from approximately $2.7 million for the same period a year ago. The increase was primarily due to the hiring of additional staff to support (i) higher levels of revenue, and (ii) the Company’s expansion into a direct owner and operator of seed-to-sale cannabis businesses. As a percentage of revenues excluding the Seed Transactions, personnel expenses dropped to 13.3% in 2020 from 24.1% in 2019.

Marketing and promotion costs decreased slightly to approximately $281,000 for the nine months ended September 30, 2020 from approximately $287,000 for the same period a year ago. As a percentage of revenues excluding the Seed Transactions, these costs fell to 0.9% in 2020 from 2.5% in 2019.

General and administrative costs increased to approximately $7.5 million for the nine months ended September 30, 2020 from approximately $6.8 million for the same period a year ago. The increase is primarily due to higher facility costs on additional properties owned and in service in 2020, higher depreciation expense on such properties, taxes paid on the Company’s cannabis operation, and increases in corporate insurance. As a percentage of revenue excluding the Seed Sales, general and administrative costs decreased significantly to 24.6% in 2020 from 59.3% in 2019, reflecting a more efficient use of the Company’s fixed overhead costs.

During the nine months ended September 30, 2020, the Company recorded an additional bad debt reserve of approximately $1.3 million to cover potential losses that would be incurred by the Company from the impact of COVID-19 and the measures enacted by local governments to reduce its spread.

As a result of the foregoing, the Company generated operating income of approximately $6.5 million for the nine months ended September 30, 2020 compared to approximately $6.1 million for the same period in 2019. Excluding the Seed Transactions, the Company generated operating income of approximately $6.5 million for the nine months ended September 30, 2020 compared to an operating loss of approximately $2.2 million for the same period in 2019, a positive swing of approximately $8.7 million.

Net non-operating expenses were approximately $8.3 million for the nine months ended September 30, 2020 compared to approximately $6.7 million for the same period in 2019. The increase is primarily due to the approximate $2.9 million received by the Company in 2019 from the settlement of the AgriMed matter discussed in Note 3 – ~~Acquisitions~~ ~~of the Company’s financial statements,~~2021 and ~~declines in value of the Company’s investments in Terrace, Chooze and MRSVP in 2020, offset by a decrease interest expense.~~2022 Plans

As a result of the foregoing, the Company incurred a net loss of approximately $1.8 million for the nine months ended September 30, 2020. For the same period a year ago, after a tax provision of approximately $1.9 million, the Company incurred a net loss of approximately $2.5 million, and excluding the Seed Transactions, incurred a net loss of approximately $8.9 million.

For the balance of ~~2020,~~2021 and into 2022, the Company’s focus will be to continue to ~~be on~~execute its Strategic Growth Plan. The Company’s priority activities will include the ~~following key areas:~~following:

No assurances can be given that any of these plans will come to fruition or that if implemented will necessarily yield positive results.

~~No assurances can be given that any of these plans will come to fruition or that if implemented will necessarily yield positive results~~

Please refer to Note 1921 – Subsequent Eventsof the Company’s financial statements included in this report for a discussion of material events that occurred after the balance sheet date.

The issuance of the shares of common stock described in Note 1921 – Subsequent Events of the Company’s financial statements were deemed to be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon Sections 4(a)(2) and/or 4(a)(5) of the Securities Act. A legend restricting the sale, transfer, or other disposition of these securities other than in compliance with the Securities Act was placed on the securities issued in the foregoing transactions.

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

In the opinion of management, inflation has not had a material effect on the Company’s financial condition or results of its operations.

In the opinion of management, the Company’s financial condition and results of its operations are not materially impacted by seasonal sales.

The Company is a “smaller reporting company” as defined by Regulation S-K and, as such, is not required to provide the information contained in this item pursuant to Regulation S-K.

Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, ~~2020~~2021 (the “Evaluation Date”). Based upon that evaluation, the chief executive officer and the chief financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) are accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

During the ~~nine months ended September 30, 2020 and~~ past several fiscal ~~year,~~years, we implemented significant measures to remediate the previously disclosed ineffectiveness of our internal control over financial reporting, which included an insufficient degree of segregation of duties amongst our accounting and financial reporting personnel, and the lack of a formalized and complete set of policy and procedure documentation evidencing our system of internal controls over financial reporting. The remediation measures consisted of the engagement of accounting consultants as needed to provide expertise on specific areas of the accounting guidance, the continued hiring of individuals with appropriate experience in internal controls over financial reporting, and the modification of our accounting processes and enhancement to our financial controls, including the testing of such controls.

Other than as described above, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) that occurred during the ~~nine~~three months ended September 30, ~~2020~~2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In July 2019, ~~Thomas~~Mr. Kidrin, ~~the former chief executive officer and~~also a former director of the Company, filed a complaint in the Massachusetts Superior Court, ~~Suffolk County, captioned Thomas Kidrin v. MariMed Inc., et. al., Civil Action No. 19-2173D. In the complaint, Mr. Kidrin alleges that~~which alleged the Company failed to pay all wages owed to him and breached his employment ~~agreement, dated August 30, 2012, and requests multiple damages, attorney fees, costs, and interest.~~agreement. The Company ~~has~~ moved to dismiss certain counts of the complaint and ~~has~~ asserted counterclaims against Mr. Kidrin alleging breach of contract, breach of fiduciary duty, money had and received, and unjust enrichment. The Company believes that the allegations in the complaint are without merit and intends to vigorously defend this matter and prosecute its counterclaims.Kidrin.

~~On November 13, 2019, Kind Therapeutics USA Inc.~~In August 2021, the parties entered into a settlement agreement and general release whereby, among other conditions, (i) Mr. Kidrin’s complaint was dismissed with prejudice, (ii) the Company issued to Mr. Kidrin five-year warrants to purchase up to 1,000,000 shares of the Company’s common stock at an exercise price of $0.50 per share, (iii) the Company irrevocably transferred intangible assets relating to the online virtual worlds business the Company had conducted in early 2014, prior to its pivot into the legal cannabis industry (such assets had zero carrying value on the Company’s balance sheet), and (iv) each party released and discharged the other from all claims, losses, and liabilities.

In September 2021, MD Global Partners LLC (“~~Kind”~~MDGP”) ~~commenced~~filed an action in the ~~Circuit~~Supreme Court ~~for Washington County, MD captioned Kind Therapeutics USA, Inc. vs. MariMed, Inc., et al. (Case No. C-21-CV-19-000670) asserting claims against~~of the State of New York alleging that the Company ~~including breach of contract, breach of fiduciary duty, accounting, and unjust enrichment, and seeking declaratory judgment and damages in excess of $75,000. On November 15, 2019,~~had breached an executed contract. In October 2021, the Company ~~filed counterclaims against Kind~~entered into a settlement agreement with and obtained a ~~third-party complaint against~~general release from MDGP whereby the ~~Members of Kind (Jennifer DiPietro, Susan Zimmerman, and Sophia Leonard-Burns) and William Tham (the “Counterclaim”). The Counterclaim alleges breach of contract with respect~~Company paid $150,000 to ~~each of~~resolve this matter.

Other than the ~~Memorandum of Understanding (the “MOU”) and~~above, there has been no material change to the Management Services Agreement (the “MSA”), unjust enrichment, promissory estoppel/detrimental reliance, and fraud in the inducement, and seeking a declaratory judgement that the MOU is an enforceable contract, specific performance of such contact, and the establishment of a constructive trust for the Company’s benefit. The Counterclaim also seeks damages. Both parties, MariMed (including MariMed Holdings MD, LLC and MariMed Advisors Inc.) and Kind, brought motions for a temporary restraining order and a preliminary injunction. By Opinion and Order entered on November 21, 2019, the Court denied both parties motions for a temporary restraining order. In its opinion, the Court specifically noted that, contrary to Kind’s allegations, the MSA and the 20-year lease agreement for Kind’s utilizationstatus of the Company’s cultivation and production facility (the “Lease”) “appear to be independent, valid and enforceable contracts.” On or about April 3, 2020, the Company filed its First Amended Counterclaim and Third Party Complaint in which additional claims were added and clarified, including breach of Lease and breach of the Licensing and Manufacturing Agreement (the “LMA”) against Kind, along with other alternative claims and seeking damages. On August 11, 2020, the Company filed its Second Amended Counterclaim and Third Party Complaint in which additional clarifications were made and claims added for breach of fiduciary duty and breach of partnership. The Company believes that its claims for breach of contract with respect to the MOU, the MSA, the Lease, and the LMA, as well as all other claims are meritorious. Further, the Company believes that Kind’s claims against the Company are without merit. The Company intends to aggressively prosecute and defend the action. A hearing on the parties’ cross-motions for preliminary injunction was held on September 14 to 17, 2020 and November 2 and 4, 2020, and the Court’s ruling on the motions is pending. The trial is currently scheduled to start on June 7, 2021.legal proceedings.

As a smaller reporting company, the Company is not required to provide the information contained in this item pursuant to Regulation S-K. However, information regarding the Company’s risk factors appears in Part I, Item 1A. of its Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. These risk factors describe some of the assumptions, risks, uncertainties, and other factors that could adversely affect the Company’s business or that could otherwise result in changes that differ materially from management’s expectations. There have been no material changes to the risk factors contained in the Annual ~~Report except for the following additional risk related to COVID-19:~~Report.

~~Our business, operations, financial condition, and liquidity have been and may continue to be materially and adversely affected by the outbreak of COVID-19.~~

In March 2020, the World Health Organization declared COVID-19 a global pandemic, and governmental authorities around the world implemented measures to reduce the spread of the virus. The spread of COVID-19 in the United States and the measures to contain it have negatively impacted the economy and created significant volatility and disruption in financial markets. Business shutdowns in certain states in response to stay-at-home orders and related measures have temporarily eliminated certain customers’, principally non-medical use customers’, access to our managed dispensaries, adversely impacting sales during this restricted period. In addition, these restrictions and other disruptions caused by the pandemic have impacted our expansion, consolidation, and administrative functions. Further, the volatility in the financial markets and investor uncertainty has delayed and adversely impacted our ability to consummate debt and equity financings to raise working capital to support our operations and expansion plans. As a result, our business, operations, financial condition, and liquidity have been and may continue to be materially and adversely affected. Further, the disruption to the global economy and to our business, along with the decline in our stock price, may also negatively impact the future carrying values of certain assets, including inventories, accounts receivables, intangibles, and goodwill. The full extent to which COVID-19 and the measures to contain it will impact our business, operations financial condition, and liquidity will depend on the severity and duration of the COVID-19 outbreak and other future developments related to the response to the virus, all of which are highly uncertain. As a result, we cannot predict the ultimate impact of COVID-19 on the Company and its operational and financial performance.

During the ~~quarter~~three months ended September 30, ~~2020,~~2021, the Company issued ~~18,256,436~~(i) 3,104,725 shares of common stock ~~from~~upon the conversion of ~~debentures, and 34,171~~approximately $1,087,000 of principal of promissory notes, (iii) 145,217 shares of common stock, ~~related~~with a fair value on grant date of approximately $133,000 in the aggregate, in connection with the grants of restricted stock to ~~an employee~~employees, (iv) 750,000 shares of common stock ~~grant.~~valued at $705,000 to purchase property and equipment, and (v) 409,308 shares of common stock to pay fees of approximately $375,000.

The issuance of the shares of common stock described above were deemed to be exempt from registration under the Securities Act in reliance upon Sections 4(a)(2) and/or 4(a)(5) of the Securities Act. A legend restricting the sale, transfer, or other disposition of these securities other than in compliance with the Securities Act was placed on the securities issued in the foregoing transactions.

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 thereto duly authorized.

Delaware		27-4672745
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

Title of each class		Ticker symbol(s)		Name of each exchange on which registered
Not Applicable.		Not Applicable.		Not Applicable.

Large Accelerated filer ☐	Accelerated filer ☒☐
Non-accelerated filer ☐ ☒	Smaller reporting company ☒
	Emerging growth company ☒

		Page
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of September 30, ~~2020~~2021 (Unaudited) and December 31, ~~2019~~2020	3

	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited)	34

	Condensed Consolidated Statements of ~~Operations for the Three and Nine Months Ended September 30, 2020 and 2019 (Unaudited)~~	4

	~~Condensed Consolidated Statements of~~ Stockholders’ Equity for the Nine Months Ended September 30, 2021 and 2020 ~~and 2019~~ (Unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2020~~2021 and ~~2019~~2020 (Unaudited)	6

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3536

Item 3.	Quantitative and Qualitative Disclosure About Market Risk	4443

Item 4.	Controls and Procedures	4443

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	4544

Item 1A.	Risk Factors	4544

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4644

Item 3.	Defaults Upon Senior Securities	4644

Item 4.	Mine Safety Disclosures	4644

Item 5.	Other Information	4644

Item 6.	Exhibits	47 45

Signatures		49

Subsidiary:	Percentage Owned
MariMed Advisors Inc.		100.0	~~100.0%~~%
Mia Development LLC		89.5	~~89.5%~~%
Mari Holdings IL LLC		100.0	~~100.0%~~%
Mari Holdings MD LLC		97.4	~~97.4%~~%
Mari Holdings NV LLC		100.0	~~100.0%~~%
Mari Holdings Metropolis LLC		70.0%
Mari Holdings Mt. Vernon LLC		100.0%
Hartwell Realty Holdings LLC		100.0	~~100.0%~~%
iRollie LLC		100.0	~~100.0%~~%
ARL Healthcare Inc.		100.0	~~100.0%~~%
KPG of Anna LLC		100.0	~~100.0%~~%
KPG of Harrisburg LLC		100.0	~~100.0%~~%
MariMed Hemp Inc.		100.0	~~100.0%~~%
MediTaurus LLC		100.0	~~70.0%~~%

	Shares		Par Value		Shares			Amount			Capital			Deficit			Interests			Equity
	Common Stock				Common Stock Subscribed But Not Issued						Additional Paid-In			Accumulated			Non-Controlling			Total Stockholders’
	Shares		Par Value		Shares			Amount			Capital			Deficit			Interests			Equity
Balances at December 31, 2018		211,013,043	$	211,013		97,136		$	169,123		$	87,180,165		$	(25,575,808	)	$	(220,032	)	$	61,764,461
Sales of common stock		799,995		800		-			-			2,599,200			-			-			2,600,000
Issuance of subscribed shares		97,136		97		(97,136	)		(169,123	)		169,026			-			-			-
MediTaurus acquisition		-		-		752,260			2,080,000			-			-			1,200,000			3,280,000
Terrace investment		500,000		500		-			-			1,589,500			-			-			1,590,000
Harvest payment		1,000,000		1,000		-			-			(1,000	)		-			-			-
Exercise of options		417,352		417		2,644,456			413,894			11,189			-			-			425,500
Exercise of warrants		686,104		686		-			-			611,756			-			-			612,442
Stock grants		-				-
Stock forfeiture		-				-
Amortization of stock grants		108,820		109		-			-			193,601			-			-			193,710
Amortization of option grants		-		-		-			-			1,219,958			-			-			1,219,958
Issuance of stand-alone warrants
Amortization of stand-alone warrant issuances		-		-		-			-			139,015			-			-			139,015
Issuance of warrants attached to debt
Warrant discount on promissory notes		-		-		-			-			600,621			-			-			600,621
Warrant discount on debentures payable		-		-		-			-			1,148,056			-			-			1,148,056
Discount on debentures payable
Extinguishment of promissory note		-
Common stock issued to settle obligations		-
Beneficial conversion feature on debentures		-		-		-			-			4,235,469			-			-			4,235,469
Conversion of debentures payable		3,591,523		3,592		3,206,816			2,464,438			5,391,253			-			-			7,859,283
Conversion of common stock to preferred stock		-
Conversion of promissory note		-
Distributions		-		-		-			-			-			-			(376,993	)		(376,993	)
Net income (loss)		-		-		-			-			-			(2,744,808	)		246,367			(2,498,441	)
Balances at September 30, 2019		218,213,973	$	218,214		6,603,532		$	4,958,332		$	105,087,809		$	(28,320,616	)	$	849,342		$	82,793,081

	Common Stock						Common Stock Subscribed But Not Issued						Additional Paid-In			Accumulated			Non- Controlling			Total Stockholders’
	Shares			Par Value			Shares			Amount			Capital			Deficit			Interests			Equity
Balances at December 31, 2020		314,418,812		$	314,419			11,413		$	5,365		$	112,974,329		$	(104,616,538	)	$	(577,139	)		8,100,436

Issuance of subscribed shares		11,413			11			(11,413	)		(5,365	)		5,354			-			-			-
Stock grants		152,094			152			102,204			95,284			137,932			-			-			233,368
Exercise of options		178,885			179			-			-			31,321			-			-			31,500
Exercise of warrants		980,062			980			-			-			91,795			-			-			92,775
Amortization of option grants		-			-			-			-			6,208,376			-			-			6,208,376
Issuance of stand-alone warrants		-			-			-			-			832,105			-			-			832,105
Issuance of warrants with stock		-			-			-			-			654,681			-			-			654,681
Conversion of debentures payable		4,610,645			4,611			-			-			1,351,841			-			-			1,356,452
Conversion of promissory notes		10,042,125			10,042			-			-			3,336,403			-			-			3,346,445
Common stock issued to settle obligations		71,691			72			-			-			53,473			-			-			53,545
Purchase of property and equipment with stock		750,000			750			-			-			704,250			-			-			705,000
Fees paid with stock		409,308			409			-			-			374,610			-			-			375,019
Return of stock		(79,815	)		(80	)		-			-			(9,857	)		-			-			(9,937	)
Equity issuance costs		-			-			-			-			(386,983	)		-			-			(386,983	)
Acquisition of 30% interest in subsidiary		-			-			100,000			93,900			871,460			-			(975,360	)		(10,000	)
Distributions		-			-			-			-			-			-			(300,781	)		(300,781	)
Net income		-			-			-			-			-			13,732,790			288,960			14,021,750
Balances at September 30, 2021		331,545,220		$	331,545			202,204		$	189,184		$	127,231,090		$	(90,883,748	)	$	(1,564,320	)	$	35,303,751

¹	LeafLink 2021 Best Selling Medical Product, LeafLink 2020 Industry Innovator, Explore Maryland Cannabis 2020 Edible of the Year, LeafLink 2019 Best Selling Medical Product.

²	Sources: BDSA 2021 and LeafLink Insights 2020.

³	LeafLink 2021 Fastest-Selling Concentrate.

	●	Identify the contract(s) with a customer;

	●	Identify the performance obligations in the contract(s);

	●	Determine the transaction price;

	●	Allocate the transaction price to the performance obligations in the contract(s); and

	●	Recognize revenue as the performance obligation is satisfied.

	●	Product Sales – direct sales of cannabis and cannabis-infused products by the Company’s ~~dispensary~~retail dispensaries and wholesale operations in Massachusetts and Illinois, and ~~direct~~ sales of hemp and hemp-infused ~~products by the Company’s hemp division. In 2019, this division participated~~products. An increase in ~~one-time sales of acquired hemp seed inventory, as further explained in Note 17 –~~ ~~Related Party Transactions~~~~. Future~~ product sales ~~are~~is expected ~~to include~~from the Company’s planned cannabis-licensee acquisitions in Maryland, Nevada, and Delaware (upon this state’s amendment to permit for-profit ownership of cannabis entities). This revenue is recognized when products are delivered or at retail ~~point-of-sale.~~ points-of-sale.

	●	Real Estate – rental income and additional rental fees generated from leasing of the Company’s state-of-the-art, regulatory-compliant cannabis facilities to its cannabis-licensed clients. Rental income is generally a fixed amount per month that escalates over the respective lease ~~term,~~terms, while additional rental fees are based on a percentage of tenant revenues that exceed specified amounts.

	●	Management – fees for providing the Company’s cannabis clients with comprehensive oversight of their cannabis cultivation, production, and dispensary operations. ~~Along with this oversight, the Company provides human resources, regulatory, marketing, and other corporate services.~~ These fees are based on a percentage of such clients’ revenue and are recognized after services have been performed.

	●	Supply Procurement – the Company maintains volume discounts with top national vendors of cultivation and production resources, supplies, and equipment, which the Company acquires and resells to its clients or third parties within the cannabis industry. The Company recognizes this revenue after the delivery and acceptance of goods by the purchaser.

	●	Licensing – ~~revenue~~royalties from the ~~sale~~licensed distribution of ~~precision-dosed, cannabis-infused products—such as~~the Company’s branded products including Kalm ~~Fusion™, Nature’s Heritage™~~Fusion® and Betty’s Eddies®, and ~~Betty’s Eddies™—~~from sublicensing of contracted brands including Healer and Tikun Olam, to regulated dispensaries throughout the United States and Puerto Rico. The recognition of this revenue occurs when the products are delivered.

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

Cash and cash equivalents	$	443,980
Inventory		113,825
Intangibles		2,067,727
Minority interests		138,356
Accounts payable		(642,033	)
Accrued expenses		(186,005	)
Due to third parties		(1,020,850	)
Total fair value of consideration	$	915,000

Cash and cash equivalents	$	64,196
Accounts receivable		5,362
Inventory		519,750
Goodwill		2,662,669
Accounts payable		(777	)
Total value of MediTaurus		3,251,200
Noncontrolling interests in MediTaurus		(975,360	)
Total fair value of consideration	$	2,275,840

	September 30, 2020		December 31, 2019
Current investments:
Terrace Inc.	$	1,002,659	$	1,449,144
Total current investments		1,002,659		1,449,144

Non-current investments:
MembersRSVP LLC		1,085,528		1,066,975
Chooze Corp.		-		257,686
GenCanna Global Inc.		-		-
Iconic Ventures Inc.		-		-
Total non-current investments		1,085,528		1,324,661
Total investments	$	2,088,187	$	2,773,805

	●	Delaware – a 45,000 square foot facility purchased in September 2016 and developed into a cannabis cultivation, processing, and dispensary facility which is leased to a cannabis-licensed client ~~occupying~~ ~~100% of the space~~ under a triple net lease that commenced in 2017 and expires in 2035.

	●	Maryland – a 180,000square foot former manufacturing facility purchased in January 2017 and developed by the Company into a cultivation and processing facility which is leased to a licensed cannabis client under a triple net lease that commenced in 2018and expires in 2037.

	●	Massachusetts – a 138,000 square foot industrial property of which approximately half of the available square footage is leased to a non-cannabis manufacturing company under a lease that commenced in 2017 and expires in ~~2022.~~

	●	~~Illinois – two~~ ~~3,400~~ ~~square foot free-standing retail dispensaries in the cities of Anna and Harrisburg and leased to the KPGs, each under a~~ 20~~-year lease that~~ ~~commenced in 2018~~2022. ~~With the acquisition of the KPGs as disclosed in Note 3 –~~ ~~Acquisitions~~, this lease was eliminated upon the consolidation of the KPGs in October 2019. Accordingly, the rental receipts on such leases have been removed from the table of future minimum rental receipts below.

	●	Delaware – 4,000square feet of retail space in a multi-use building space which the Company developed into a cannabis dispensary and is subleased to its cannabis-licensed client under a under a triple net lease expiring in December 2021 with a five-year option to ~~extend.~~extend.

	●	Delaware – a 100,000 square foot warehouse which the Company is developing into a cultivation and processing facility to be subleased to its cannabis-licensed client. The lease expires in March 2030, with an option to extend the term for three additional five-year periods.

	●	Delaware – a 12,000 square foot premises which the Company developed into a cannabis production facility with offices, and is subleased to its cannabis-licensed client. The lease expires in January 2026 and contains an option to negotiate an extension at the end of the lease term.

	September 30, 2021		December 31, 2020
Plants	$	1,490,314	$	3,352,425
Ingredients and other raw materials		256,331		176,338
Work-in-process		3,434,208		468,377
Finished goods		5,813,110		2,833,431
Total inventory	$	10,993,963	$	6,830,571

	September 30, 2020			December 31, 2019
Bank of New England – Massachusetts properties	$	12,912,723		$	4,825,226
Bank of New England – Delaware property		1,602,730			1,682,275
DuQuoin State Bank – Illinois properties		822,245			829,229
South Porte Bank – Illinois property		906,653			-
Total mortgages payable		16,244,351			7,336,730
Mortgages payable, current portion		(1,379,541	)		(223,888	)
Mortgages payable, less current portion	$	14,864,810		$	7,112,842

	September 30, 2021			December 31, 2020
Bank of New England – New Bedford, MA and Middleboro, MA properties	$	12,583,053		$	12,834,090
Bank of New England – Wilmington, DE property		1,491,525			1,575,658
DuQuoin State Bank – Anna, IL and Harrisburg, IL properties		786,046			814,749
DuQuoin State Bank – Metropolis, IL property		2,688,230			-
South Porte Bank – Mt. Vernon, IL property		838,440			906,653
Total mortgages payable		18,387,294			16,131,150
Mortgages payable, current portion		(1,412,545	)		(1,387,014	)
Mortgages payable, less current portion	$	16,974,749		$	14,744,136

2020	$	2,808,883
2021		11,024,306
2022		12,268,122
2023		544,571
2024		577,281
Thereafter		13,110,191
Total		40,333,354
Less discounts		(994,591	)
	$	39,338,763


2021	$	1,253,995
2022		593,112
2023		1,231,622
2024		669,650
2025		716,186
Thereafter		14,859,046
Total		19,323,611
Less discounts		(741	)
Long-term debt, net	$	19,322,870

Exercise Price		Shares Under Option				Remaining
per Share		Outstanding		Exercisable		Life in Years
$	0.130		200,000		200,000		0.01
$	0.140		550,000		550,000		0.25
$	0.149		500,000		500,000		5.25
$	0.300		554,500		-		4.50
$	0.330		50,000		50,000		0.44
$	0.417		900,000		400,000		4.24
$	0.450		125,000		125,000		1.01
$	0.590		15,000		15,000		4.19
$	0.630		300,000		300,000		1.25
$	0.770		200,000		200,000		2.25
$	0.900		50,000		50,000		2.62
$	0.910		50,000		50,000		2.06
$	0.950		50,000		30,000		2.25
$	0.992		300,000		300,000		3.99
$	1.000		125,000		75,000		4.09
$	1.350		100,000		50,000		2.83
$	1.950		375,000		250,000		2.75
$	2.320		100,000		100,000		2.95
$	2.450		2,000,000		2,000,000		2.23
$	2.500		100,000		100,000		2.91
$	2.650		200,000		200,000		2.98
$	2.850		56,250		43,750		2.20
$	2.850		100,000		75,000		3.20
$	3.000		25,000		25,000		3.21
$	3.725		100,000		100,000		3.19
			7,125,750		5,788,750

Exercise Price	Shares Under Option				Remaining Life
per Share	Outstanding		Exercisable		in Years
$0.140		160,000		80,000		3.78
$0.149		500,000		500,000		4.25
$0.169		200,000		200,000		4.12
$0.225		2,000,000		1,250,000		4.11
$0.250		20,000		20,000		3.67
$0.250		50,000		12,500		4.07
$0.250		800,000		600,000		4.12
$0.250		80,000		60,000		4.15
$0.250		50,000		50,000		3.42
$0.300		403,000		403,000		3.50
$0.417		900,000		900,000		3.24
$0.505		100,000		50,000		4.26
$0.505		800,000		200,000		4.28
$0.590		15,000		15,000		3.19
$0.630		300,000		300,000		0.25
$0.740		590,000		356,250		4.58
$0.770		200,000		200,000		1.25
$0.830		287,000		143,500		4.48
$0.830		600,000		-		4.66
$0.840		878,921		600,000		4.79
$0.840		99,000		19,800		4.84
$0.850		90,000		33,125		4.71
$0.880		11,550,000		5,925,000		4.78
$0.880		15,000		-		4.87
$0.890		10,000		2,500		4.31
$0.892		40,000		20,000		4.31
$0.895		25,000		12,500		4.32
$0.900		50,000		50,000		1.61
$0.910		50,000		50,000		1.06
$0.920		300,000		-		4.76
$0.928		500,000		100,000		4.86
$0.950		50,000		50,000		1.25
$0.970		100,000		50,000		4.71
$0.983		145,000		-		4.74
$0.990		500,000		-		4.97
$0.992		300,000		300,000		2.99
$1.000		15,000		15,000		2.71
$1.000		125,000		125,000		3.09
$1.350		100,000		100,000		1.83
$1.950		375,000		375,000		1.75
$2.320		100,000		100,000		1.95
$2.450		2,000,000		2,000,000		1.23
$2.500		100,000		100,000		1.91
$2.650		200,000		200,000		1.98
$2.850		56,250		56,250		1.20
$2.850		100,000		100,000		2.20
$3.000		25,000		25,000		2.21
$3.725		100,000		100,000		2.19
		26,054,171		15,849,425

	2021		2020
Product sales - retail	$	59,230,023	$	16,895,170
Product sales - wholesale		20,536,161		5,097,128
Real estate rentals		5,397,384		5,065,538
Management fees		2,562,002		1,081,562
Supply procurement		1,446,085		1,218,334
Licensing fees		1,248,625		1,180,097
Total revenues	$	90,420,280	$	30,537,829

	●	Delaware – 4,000 square feet of retail space in a multi-use building under a five-year lease that ~~commenced~~expires in ~~October 2016 and contains~~December 2021 with a five-year option to ~~extend the term.~~extend. The Company developed the space into a cannabis dispensary which is subleased to its cannabis-licensed client.

	●	Delaware – a 100,000 square foot warehouse leased in March 2019 that the Company is developing into a cultivation and processing facility to be subleased to the same Delaware client. The lease term is 10 years,, with an option to extend the term for three additional five-year periods.

	●	Delaware –a 12,000 square foot premises which the Company developed into a cannabis production facility with offices, and is subleases to its cannabis-licensed client. The lease expires in January 2026 and contains an option to negotiate an extension at the end of the lease term.

	●	Nevada – 10,000 square feet of an industrial building that the Company has built-out into a cannabis cultivation facility and plans to rent to its cannabis-licensed client under a sub-lease which will be coterminous with this lease expiring in 2024.

	●	Massachusetts – 10,000 square feet of office space which the Company utilizes as its corporate offices under a ~~10-year~~10-year lease with a related party expiring in 2028, with an option to extend the term for an additional five-year ~~period~~period..

	●	Maryland – a 2,700 square foot ~~2-unit~~two-unit apartment under a lease that expires in July 2022 ~~with an option to renew for a two-year term.~~.

	●	~~cost~~Cost of ~~revenues, which includes~~Revenues – the direct costs associated with the generation of the Company’s ~~revenues;~~revenues.

	●	~~operating expenses, which include~~Operating Expenses – comprised of the sub-categories of personnel, marketing and promotion, general and administrative, and bad ~~debts; and~~debts.

	●	~~non-operating income~~Non-operating Income and ~~expenses, which include~~Expenses – comprised of the sub-categories of interest expense, interest income, ~~equity in earnings of equity method investments, loss~~losses on obligations settled with equity, ~~and~~ changes in the fair value of non-consolidated ~~investments.~~investments, and other non-operating gains and losses.

	●	~~During the nine months ended~~Cash and cash equivalents increased 753% to approximately $25.6 million at September 30, ~~2020, the Company’s operating activities provided positive cash flow~~2021, from approximately $3.0 million at December 31, 2020.

	●	Working capital increased to approximately $27.3 million at September 30, 2021 from a working capital deficit of approximately ~~$1.6~~$2.2 million ~~compared to approximately $24.2 million of negative cash flow used by such activities during the same period of 2019,~~at December 31, 2020, a positive swing of approximately ~~$25.8~~$29.5 million.

	●	AtIn the nine months ended September 30, ~~2020,~~2021, the Company’s ~~negative working capital was~~operating activities provided positive cash flow of approximately ~~$9.1~~$28.2 million, ~~a continued improvement from approximately $21.5 million at June 30, 2020 and approximately $29.3 million at December 31, 2019.~~

	●	~~The Company successfully restructured the terms of its short term promissory notes payable~~compared to approximately ~~$8.5~~$1.6 million ~~at September 30,~~in the same period in 2020, ~~from~~an increase of approximately ~~$17.2 million at June 30, 2020 and $23.1 million at December 31, 2019.~~$26.6 million.

	-	interest income and interest expense;
	-	income taxes;
	-	depreciation of fixed assets and amortization of intangibles;
	-	non-cash expenses on debt and equity issuances;
	-	impairment or write-downs of intangible assets;
	-	unrealized gains and losses on investments and currency translations;
	-	legal settlements;
	-	gains or losses from the extinguishment of debt via the issuance of equity;
	-	discontinued operations; and
	-	merger- and acquisition-related transaction expenses.

	1)	~~In Massachusetts, increase production~~Continue to consolidate the cannabis businesses that the Company has developed and ~~wholesale revenue at its cultivation and production facility in New Bedford, and drive revenues at the recently approved for adult-use dispensary in Middleboro.~~manages.

	2)	Expand our revenue, assets, and footprint in the states in which the Company is operating.
		- In Massachusetts, the Company intends to open two additional dispensaries and significantly expand the capacity and capability of its manufacturing facility.
		- In Delaware, the Company is completing the development of an additional 60,000 square feet of cultivation and production in a new facility in Milford.
		- In Maryland, the Company intends to expand its manufacturing facility by 40,000 square feet and open a dispensary in Annapolis.
		-In Illinois, ~~increase sales~~the Company intends to go vertical by acquiring one or more craft licenses and ~~profits~~to potentially add up to six more dispensaries up to the statutory limit of ~~the dispensaries in Anna, Harrisburg and recently-opened Mt. Vernon.~~ ten.

	3)	~~Continue to expand the Company’s Nature’s Heritage™ branded flower~~Expand into other legal states through M&A and ~~popular infused-product brands, such as Betty’s Eddies™ and Kalm Fusion™, into the robust Massachusetts medical and adult-use marketplace.~~filing new applications in states where new licensing opportunities arise.

	4)	~~Continue~~Expand revenues by producing and distributing our award-winning brands to ~~execute its aforementioned~~qualified strategic ~~plan.~~partners or acquiring production and distribution licenses.

Exhibit No.		Description

3.1		Certificate of Incorporation of the Company (a)

3.1.1		~~Amended~~Certificate of Amendment to the Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on March 9, 2017 (b)

3.1.2		Series B Convertible Preferred Stock Certificate of Designation as filed with the Secretary of State of Delaware on February 27, ~~2020.~~2020 (h)

3.1.3		Certificate Eliminating the Series A Preferred Stock as filed with the Secretary of State of Delaware on February 27, ~~2020.~~2020 (h)

3.1.4		Series C Convertible Preferred Stock Certificate of Designation as filed with the Secretary of State of Delaware on March 1, 2021 (p)

3.1.5		Certificate of Amendment to the Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on April 25, 2017, effective as of May 1, 2017 *

3.1.6		Certificate of Amendment to the Certificate of Incorporation of the Company as filed with the Secretary of State of Delaware on September 24, 2021 *

3.2		By-Laws -– Restated as Amended (a)

4.1		Amended and Restated Promissory Note, dated February 10, 2020, in the principal amount of $11,500,000, issued by MariMed Hemp Inc. and MariMed Inc. (f)

4.1.1		Promissory Note, dated February 27, 2020, in the principal amount of $3,742,500, issued by MariMed Inc. to Navy Capital Green Fund, ~~LP.~~LP (h)

4.1.2		Promissory Note, dated February 27, 2020, in the principal amount of $675,000, issued by MariMed Inc. to Navy Capital Green Co-Invest Fund, ~~LLC.~~LLC (h)

4.1.3		12% Convertible Promissory Note, dated April 23, 2020, in the principal amount of $900,000, issued by MariMed Inc. to Best Buds Funding ~~LLC.~~LLC (i)

4.2		Second Amended and Restated Promissory Note, dated June 24, 2020, in the principal amount of $8,811,653.84, issued by MariMed Hemp Inc. and MariMed Inc. to SYYM ~~LLC.~~LLC (j)

4.3		Common Stock Purchase Warrant, dated June 24, 2020, issued by MariMed Inc.to SYYM ~~LLC.~~LLC (k)

4.4		Amended and Restated Senior Secured Commercial Promissory Note, dated October 19, 2020, in the principal amount of $5,845,000, issued by MariMed Advisors, Inc. to Best Buds Funding ~~LLC.~~LLC (m)

4.5		Amended and Restated Senior Secured Commercial Promissory Note, dated October 19, 2020, in the principal amount of $3,000,000, issued by MariMed Advisors, Inc. to Best Buds Funding ~~LLC.~~LLC (m)

4.6
~~4.6~~		Common Stock Purchase Warrant, dated September 30, 2020, issued by MariMed Inc.to Best Buds Funding, LLC. and/or its ~~designees.~~designees (m)

4.7		Amended and Restated Common Stock Purchase Warrant, dated March 18, 2021, issued by MariMed Inc. to Hadron Healthcare Master Fund (q)

4.8		Third Amended and Restated Promissory Note, dated April 1, 2021, in the principal amount of $3,211,653.84, issued by MariMed Hemp Inc. and MariMed Inc. to SYYM LLC (r)

10.1		Employment Agreement dated as of August 30, 2012 between Worlds Online Inc. and Thomas Kidrin (o)

10.2		2011 Stock Option and Restricted Stock Award Plan (a)

10.3		Form of Convertible Debenture issued by the Company (c)

10.4		Form of Secured Convertible Debenture of GenCanna Global, Inc. (c)

10.5		Form of Securities Purchase Agreement between the Company and YA II PN, LTD. (c)

10.6		Amended and Restated Registration Rights Agreement dated as of November 5, 2018 between the Company and YA II PN, LTD. (c)

10.7		Amended and Restated 2018 Stock Award and Incentive ~~Plan.~~Plan (d)

10.7.1		Amendment to the Amended and Restated 2018 Stock Award and Incentive Plan, effective as of September 23, 2021 *

10.8		Form of Stock Option Agreement, dated September 27, 2019, with each of David R. Allen, Eva Selhub, M.D., and Edward J. ~~Gildea.~~Gildea (e)

10.9		Amendment Agreement, dated as of February 10, 2020, between SYYM LLC, as noteholder and collateral agent, and MariMed Inc. and MariMed Hemp Inc., as ~~co-borrowers.~~co-borrowers (g)

10.10		Exchange Agreement, dated as of February 27, 2020, among MariMed Inc., Navy Capital Green Management, LLC, a Delaware limited liability company, as discretionary investment manager of Navy Capital Green Fund, LP, and Navy Capital Green Co-Invest Fund, LLC. (h)

10.11		Amendment Agreement dated June 24, 2020, between SYYM LLC, as noteholder and collateral agent, and MariMed Inc. and MariMed Hemp Inc., as ~~co-borrowers.~~co-borrowers (l)

10.12		Note Extension Agreement, effective as of September 30, 2020, among Best Buds Funding LLC, as lender, and each of MariMed Inc., Mari Holdings MD LLC, and MariMed Advisors Inc., as the borrower ~~parties.~~parties (n)

10.13		Securities Purchase Agreement, dated March 1, 2021, between MariMed Inc. and Hadron Healthcare Master Fund (p)

10.14		First Amendment to Securities Purchase Agreement, dated March 18, 2021, between MariMed Inc. and Hadron Healthcare Master Fund (q)

10.15		Amendment Agreement dated April 1, 2021, between SYYM LLC, as noteholder and collateral agent, and MariMed, Inc. and MariMed Hemp, Inc., as co-borrowers (r)

10.16 ***		Employment Agreement between MariMed Inc. and Robert Fireman, dated July 9, 2021 (s)

10.17 ***		Employment Agreement between MariMed Inc. and Jon R. Levine, dated July 9, 2021 (s)

10.18 ***		Employment Agreement between MariMed Inc. and Timothy Shaw, dated July 9, 2021 (s)

10.19 ***		Form of the First Amendment to the Employment Agreement, effective as of September 22, 2021, between MariMed Inc. and each of Robert Fireman, Jon R. Levine, and Timothy Shaw *

10.20 ***		Form of Stock Option Agreement, dated July 9, 2021, with each of Robert Fireman, Jon R. Levine, and Timothy Shaw *

10.21 ***		Form of Stock Option Agreement, dated October 1, 2021, with each of Robert Fireman, Jon R. Levine, and Timothy Shaw (t)

10.22		Settlement Agreement and General Release, dated August 19, 2021, between MariMed Inc. and Thomas Kidrin *

31.1.		Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive ~~Officer.~~Officer *

31.2.		Rule 13a-14(a)/15d-14(a) Certifications of Chief Financial ~~Officer.~~Officer *

32.1.		Section 1350 Certifications of Chief Executive ~~Officer.~~Officer **

32.2.		Section 1350 Certifications of Chief Financial ~~Officer.~~Officer **

101.INS XBRL		Instance Document *

101.SCH XBRL		Taxonomy Extension Schema *

101.CAL XBRL		Taxonomy Extension Calculation Linkbase *

101.DEF XBRL		Taxonomy Extension Definition Linkbase *

101.LAB XBRL		Taxonomy Extension Label Linkbase *

101.PRE XBRL		Taxonomy Extension Presentation Linkbase *

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) *

(a)	Incorporated by reference to the same numbered ~~Exhibit filed with~~exhibit of the Registration Statement on Form 10-12G (File No. 000-54433) filed on June 9, 2011.

(b)	Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2016, filed on April 17, 2017.

(c)	Incorporated by reference to the Current Report on Form 8-K filed on November 9, 2018.

(d)	Incorporated herein by reference to Appendix A of the Company’s Definitive Proxy Statement on Schedule 14A filed on August 26, 2019.

(e)	Incorporated by reference to Exhibit 10.2 ~~filed with~~of the Quarterly Report on Form 10-Q for the period ended September 30, 2019, filed on November 29, 2019.

(f)	Incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed on February 12, 2020.

(g)	Incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on February 12, 2020.

(h)	Incorporated by reference to the Current Report on Form 8-K filed on February 27, 2020.

(i)	Incorporated by reference to the Quarterly Report on Form 10-Q for the period ended ~~March 31,~~June 30, 2020, filed on May 28, 2020.

(j)	Incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed on June 30, 2020.

(k)	Incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K filed on June 30, 2020.

(l)	Incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on June 30, 2020.

(m)	Incorporated by reference to the same numbered exhibit of the Current Report on Form 8-K filed on October 26, 2020.

(n)	Incorporated by reference to Exhibit 10.13 of the Current Report on Form 8-K filed on October 26, 2020.

(o)	Incorporated by reference to the same numbered ~~Exhibit filed with~~exhibit of the Annual Report on Form 10-K for the year ended December 31, 2012, filed on March 29, 2013.

(p)	Incorporated by reference to the same numbered exhibit of the Current Report on Form 8-K filed on March 2, 2021.

(q)	Incorporated by reference to the same numbered exhibit of the Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 23, 2021.

(r)	Incorporated by reference to the exhibit of the Current Report on Form 8-K filed on March 23, 2021.

(s)	Incorporated by reference to the same numbered exhibit of the Current Report on Form 8-K filed on July 9, 2021.

(t)	Same as Exhibit 10.20.