UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period ended March 31, ~~2021~~2022

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

For the transition period from __________________ to __________________

Commission File number 0-54433

MARIMED INC.

(Exact Name of Registrant as Specified in Its Charter)

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

10 Oceana Way

Norwood, MA 02062

(Address of Principal Executive Offices)

617-795-5140

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None.

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

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.

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

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 May ~~17, 2021,~~10, 2022, ~~322,725,060~~335,793,167 shares of the registrant’s common stock were outstanding.

MariMed Inc.

Table of Contents

			Page
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of March 31, ~~2021~~2022 (Unaudited) and December 31, ~~2020~~2021		3

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)		4

	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2022 and 2021 ~~and 2020~~ (Unaudited)		5

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 ~~and 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		30

Item 3.	Quantitative and Qualitative Disclosure About Market Risk		36

Item 4.	Controls and Procedures		36

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings		37

~~Item 3.~~	~~Quantitative and Qualitative Disclosure About Market Risk~~	44

~~Item 4.~~	~~Controls and Procedures~~	44

	~~PART II – OTHER INFORMATION~~

~~Item 1.~~	~~Legal Proceedings~~	45

Item 1A.	Risk Factors		4637

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		4637

Item 3.	Defaults Upon Senior Securities		4637

Item 4.	Mine Safety Disclosures		4637

Item 5.	Other Information		4637

Item 6.	Exhibits	47	38

Signatures			5041

MariMed Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and par value amounts)

March 31, December 31,
2021 2020
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 12,318,717 $ 2,999,053
Accounts receivable, net 7,341,124 6,675,512
Deferred rents receivable 1,876,049 1,940,181
Notes receivable, current portion 374,978 658,122
Inventory 7,454,328 6,830,571
Investments 1,312,028 1,357,193
Other current assets 1,016,162 582,589
Total current assets 31,693,386 21,043,221

Property and equipment, net 47,490,375 45,636,529
Intangibles, net 2,689,828 2,228,560
Investments 1,165,788 1,165,788
Notes receivable, less current portion 1,212,829 965,008
Right-of-use assets under operating leases 5,564,376 5,247,152
Right-of-use assets under finance leases 70,249 78,420
Other assets 97,951 80,493
Total assets $ 89,984,782 $ 76,445,171

Liabilities, mezzanine equity, and stockholders’ equity
Current liabilities:
Accounts payable $ 6,050,126 $ 5,044,918
Accrued expenses 4,663,951 3,621,269
Sales and excise taxes payable
1,286,349

1,053,693

Debentures payable -
1,032,448

Notes payable, current portion 4,856 8,859,175
Mortgages payable, current portion 1,382,411 1,387,014
Operating lease liabilities, current portion 1,129,611 1,008,227
Finance lease liabilities, current portion 36,618 38,412
Due to related parties - 1,157,815
Other current liabilities -
23,640

Total current liabilities 14,553,922 23,226,611

Notes payable, less current portion 3,235,972 10,682,234
Mortgages payable, less current portion 14,616,387 14,744,136
Operating lease liabilities, less current portion 5,013,417 4,822,064
Finance lease liabilities, less current portion 38,184 44,490
Other liabilities 100,200 100,200
Total liabilities 37,558,082 53,619,735

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

Stockholders’ equity:
Undesignated preferred stock, $0.001 par value; 38,875,451 and 45,091,667 shares authorized at March 31, 2021 and December 31, 2020, respectively; 0 shares issued and outstanding at March 31, 2021 and December 31, 2020 - -
Common stock, $0.001 par value; 500,000,000 shares authorized at March 31, 2021 and December 31, 2020; 322,499,699 and 314,418,812 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively 322,500 314,419
Common stock subscribed but not issued; 6,877 and 11,413 shares at March 31, 2021 and December 31, 2020, respectively 5,365 5,365
Additional paid-in capital 115,340,044 112,974,329
Accumulated deficit (100,396,635 ) (104,616,538 )
Noncontrolling interests (569,574 ) (577,139 )
Total stockholders’ equity 14,701,700 8,100,436
Total liabilities, mezzanine equity, and stockholders’ equity $ 89,984,782 $ 76,445,171

	March 31,			December 31,
	2022			2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	33,467		$	29,683
Accounts receivable, net		3,462			1,666
Deferred rents receivable		1,586			1,678
Notes receivable, current portion		129			127
Inventory		12,238			9,768
Investments		1,253			251
Other current assets		2,179			1,440
Total current assets		54,314			44,613

Property and equipment, net		65,482			62,150
Intangibles, net		2,395			2,230
Investments		100			-
Notes receivable, less current portion		9,104			8,987
Right-of-use assets under operating leases		4,913			5,081
Right-of-use assets under finance leases		576			46
Other assets		98			98
Total assets	$	136,982		$	123,205

Liabilities, mezzanine equity, and stockholders’ equity
Current liabilities:
Accounts payable	$	8,311		$	5,099
Accrued expenses		1,728			1,349
Income taxes payable		20,059			16,467
Sales and excise taxes payable		1,355			1,798
Notes payable, current portion		10			10
Mortgages payable, current portion		1,416			1,400
Operating lease liabilities, current portion		1,128			1,071
Finance lease liabilities, current portion		178			27
Other current liabilities		-			2
Total current liabilities		34,185			27,223

Notes payable, less current portion		46			448
Mortgages payable, less current portion		16,624			16,814
Operating lease liabilities, less current portion		4,343			4,574
Finance lease liabilities, less current portion		372			22
Other liabilities		100			100
Total liabilities		55,670			49,181

Mezzanine equity:
Series B convertible preferred stock, $0.001 par value; 4,908,333 shares authorized, issued and outstanding at March 31, 2022 and December 31, 2021		14,725			14,725
Series C convertible preferred stock, $0.001 par value; 12,432,432 shares authorized at March 31, 2022 and December 31, 2021; 6,216,216 shares issued and outstanding at March 31, 2022 and December 31, 2021		23,000			23,000
Total mezzanine equity		37,725			37,725

Stockholders’ equity:
Undesignated preferred stock, $0.001 par value; 38,875,451 shares authorized at March 31, 2022 and December 31, 2021; 0 shares issued and outstanding at March 31, 2022 and December 31, 2021		-			-
Common stock, $0.001 par value; 700,000,000 shares authorized at March 31, 2022 and December 31, 2021; 335,558,206 and 334,030,348 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		336			334
Common stock subscribed but not issued; 2,717 and 0 shares at March 31, 2022 and December 31, 2021, respectively		2			-
Additional paid-in capital		138,064			134,920
Accumulated deficit		(93,204	)		(97,392	)
Noncontrolling interests		(1,611	)		(1,563	)
Total stockholders’ equity		43,587			36,299
Total liabilities, mezzanine equity, and stockholders’ equity	$	136,982		$	123,205

See accompanying notes to condensed consolidated financial statements.

MariMed Inc.

Condensed Consolidated Statements of Operations

~~(Unaudited)~~(in thousands, except share and per share amounts; unaudited)

	2021			2020
	Three Months Ended March 31,						2022			2021
	2021			2020			Three Months Ended March 31,
							2022			2021
Revenues	$	24,642,564		$	7,466,019		$	31,282		$	24,643

Cost of revenues		11,456,646			2,597,917			14,306			11,457

Gross profit		13,185,918			4,868,102			16,976			13,186

Operating expenses:
Personnel		1,727,141			1,513,383			3,042			1,727
Marketing and promotion		224,369			112,384			643			225
General and administrative		3,170,724			2,235,009			6,228			3,171
Bad debts		1,025,415			-			14			1,025
Total operating expenses		6,147,649			3,860,776			9,927			6,148

Operating income		7,038,269			1,007,326			7,049			7,038

Non-operating income (expenses):
Interest expense		(1,512,022	)		(2,691,145	)		(313	)		(1,512	)
Interest income		34,027			46,031			163			34
Loss on obligations settled with equity		(1,286	)		-			-			(1	)
Change in fair value of investments		(45,165	)		(687,002	)
Gain (loss) on change in fair value of investment								48			(45	)
Other investment income								954			-
Total non-operating income (expenses), net		(1,524,446	)		(3,332,116	)		852			(1,524	)

Income (loss) before income taxes		5,513,823			(2,324,790	)
Income before income taxes								7,901			5,514
Provision for income taxes		1,203,797			12,926			3,660			1,204
Net income (loss)	$	4,310,026		$	(2,337,716	)
Net income							$	4,241		$	4,310

Net income (loss) attributable to noncontrolling interests	$	90,123		$	83,728
Net income (loss) attributable to MariMed Inc.	$	4,219,903		$	(2,421,444	)
Net income attributable to noncontrolling interests							$	53		$	90
Net income attributable to MariMed Inc.							$	4,188		$	4,220

Net income (loss) per share
Net income per share
Basic		0.01			(0.01	)	$	0.01		$	0.01
Diluted		0.01			(0.01	)	$	0.01		$	0.01

Weighted average common shares outstanding
Basic		305,212,269			230,829,366			334,762,825			305,212,269
Diluted		340,825,940			230,829,366			378,890,365			340,825,940

See accompanying notes to condensed consolidated financial statements.

MariMed Inc.

Condensed Consolidated Statements of Stockholders’ Equity

~~(Unaudited)~~(in thousands, except share amounts; unaudited)

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, 2019 228,408,024 $ 228,408 3,236,857 $ 1,168,074 $ 112,245,730 $ (106,760,527 ) $ (553,465 ) 6,328,220
Issuance of subscribed shares 3,236,857 3,237 (3,236,857 ) (1,168,074 ) 1,164,837 - - -
Stock grants - - 30,307 5,365 - - - 5,365
Exercise of warrants -
Amortization of option grants - - - - 317,355 - - 317,355
Issuance of stand-alone warrants
Discount on debentures payable - - - - 28,021 - - 28,021
Beneficial conversion feature on debentures payable - - - - 379,183 - - 379,183
Conversion of debentures payable 8,584,276 8,584 - - 1,796,073 - - 1,804,657
Conversion of common stock to preferred stock (4,908,333 ) (4,908 ) - - (14,720,092 ) - - (14,725,000 )
Conversion of promissory notes -
Common stock issued to settle obligations -
Equity issuance costs
Distributions - - - - - - (100,905 ) (100,905 )
Net income (loss) - - - - - (2,421,444 ) 83,728 (2,337,716 )
Balances at March 31, 2020 235,320,824 $ 235,321 30,307 $ 5,365 $ 101,211,107 $ (109,181,971 ) $ (570,642 ) $ (8,300,820 )

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, 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 - - 6,877 5,365 - - - 5,365
Exercise of warrants 50,000 50 - - 7,450 - - 7,500
Amortization of option grants - - - - 294,598 - - 294,598
Issuance of stand-alone warrants - - - - 55,786 - - 55,786
Conversion of debentures payable 4,610,645 4,611 - - 1,351,841 - - 1,356,452
Conversion of promissory notes 3,365,972 3,366 - - 1,006,426 - - 1,009,792
Common stock issued to settle obligations 42,857 43 - - 31,243 - - 31,286
Equity issuance costs - - - - (386,983 ) - - (386,983 )
Distributions - - - - - - (82,558 ) (82,558 )
Net income (loss) - - - - - 4,219,903 90,123 4,310,026
Balances at March 31, 2021 322,499,699 $ 322,500 6,877 $ 5,365 $ 115,340,044 $ (100,396,635 ) $ (569,574 ) $ 14,701,700

	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, 2020		314,418,812	$	314		11,413		$	5		$	112,974		$	(104,615	)	$	(577	)		8,101
Issuance of subscribed shares		11,413		-		(11,413	)		(5	)		5			-			-			-
Stock grants		-		-		6,877			5			-			-			-			5
Exercise of warrants		50,000		-		-			-			8			-			-			8
Amortization of option grants		-		-		-			-			295			-			-			295
Issuance of stand-alone warrants		-		-		-			-			56			-			-			56
Conversion of debentures payable		4,610,645		5		-			-			1,351			-			-			1,356
Conversion of promissory notes		3,365,972		3		-			-			1,007			-			-			1,010
Common stock issued to settle obligations		42,857		-		-			-			31			-			-			31
Equity issuance costs		-		-		-			-			(387	)		-			-			(387	)
Distributions		-		-		-			-			-			-			(83	)		(83	)
Net income (loss)		-		-		-			-			-			4,220			90			4,310
Balances at March 31, 2021		322,499,699	$	322		6,877		$	5		$	115,340		$	(100,395	)	$	(570	)	$	14,702

	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, 2021		334,030,348	$	334		-	$	-	$	134,920	$	(97,392	)	$	(1,563	)	$	36,299
Stock grants		-		-		2,717		2		-		-			-			2
Exercise of options		10,000		-		-		-		3		-			-			3
Amortization of option grants		-		-		-		-		2,469		-			-			2,469
Conversion of promissory notes		1,142,858		1		-		-		399		-			-			400
Fees paid with stock		375,000		1		-		-		273		-			-			274
Distributions		-		-		-		-		-		-			(101	)		(101	)
Net income		-		-		-		-		-		4,188			53			4,241
Balances at March 31, 2022		335,558,206		336		2,717		2		138,064		(93,204	)		(1,611	)		43,587

The above statements do not show columns for ~~undesignated preferred stock~~the shares and par value of Undesignated

Preferred Stock as the balances were zero and there was no activity in the reported periods.

See accompanying notes to condensed consolidated financial statements.

MariMed Inc.

Condensed Consolidated Statements of Cash Flows

~~(Unaudited)~~(in thousands; unaudited)

	2021			2020			2022			2021
	Three Months Ended March 31,						Three Months Ended March 31,
	2021			2020			2022			2021
Cash flows from operating activities:
Net income (loss) attributable to MariMed Inc.	$	4,219,903		$	(2,421,444	)
Net income (loss) attributable to noncontrolling interests		90,123			83,728
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net income attributable to MariMed Inc.							$	4,188		$	4,220
Net income attributable to noncontrolling interests								53			90
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		462,423			484,091			702			462
Amortization of intangibles		177,302			79,079			140			177
Amortization of stock grants		5,365			5,365			2			5
Amortization of option grants		294,598			317,355			2,469			295
Amortization of stand-alone warrant issuances		55,786			-			-			56
Amortization of warrants attached to debt		539,273			223,363			-			539
Amortization of beneficial conversion feature		176,522			990,846			-			177
Amortization of original issue discount		51,753			56,808			-			52
Bad debt expense		1,025,415			-			14			1,025
Fees paid with stock								274			-
Loss on obligations settled with equity		1,286			-			-			1
Change in fair value of investments		45,165			687,002
Gain (loss) on change in fair value of investment								(48	)		45
Other investment income								(954	)		-
Changes in operating assets and liabilities:
Accounts receivable, net		(1,691,027	)		(842,914	)		(1,810	)		(1,691	)
Deferred rents receivable		64,132			(204,253	)		92			64
Due from third parties		-			(99,320	)
Inventory		(623,757	)		(1,496,168	)		(2,470	)		(624	)
Other current assets		(433,573	)		19,314			(739	)		(434	)
Other assets		(17,458	)		(32,000	)		-			(17	)
Accounts payable		1,035,208			21,180			3,212			1,035
Accrued expenses		1,074,913			855,127			217			(129	)
Income taxes payable								3,592			1,204
Sales and excise taxes payable		232,656			619,489			(443	)		233
Operating lease payments, net		(4,487	)		79,523			(6	)		(4	)
Finance lease interest payments		1,504			2,087			7			2
Other current liabilities		(23,640	)		164,637			(2	)		(24	)
Net cash provided by (used in) operating activities		6,759,385			(407,105	)
Net cash provided by operating activities								8,490			6,759

Cash flows from investing activities:
Purchase of property and equipment		(2,308,098	)		(1,363,169	)		(4,015	)		(2,308	)
Purchase of cannabis licenses		(638,570	)		(25,000	)		(305	)		(638	)
Investment in Green Growth Group, Inc.								(100	)		-
Interest on notes receivable		69,338			34,397			43			69
Net cash used in investing activities		(2,877,330	)		(1,353,772	)		(4,377	)		(2,877	)

Cash flows from financing activities:
Proceeds from issuance of preferred stock		23,000,000			-			-			23,000
Equity issuance costs		(386,983	)		-			-			(387	)
Proceeds from issuance of promissory notes		-			4,517,500
Repayments of promissory notes		(15,800,579	)		(2,400,000	)		(2	)		(15,801	)
Proceeds from issuance of debentures		-			935,000
Proceeds from mortgages		-			235,900
Payments on mortgages		(132,352	)		(60,381	)		(174	)		(1,157	)
Proceeds from exercise of options								3			-
Proceeds from exercise of warrants		7,500			-			-			8
Due to related parties		(1,157,815	)		(240,547	)		-			(132	)
Finance lease principal payments		(9,604	)		(9,603	)		(55	)		(10	)
Distributions		(82,558	)		(100,905	)		(101	)		(83	)
Net cash provided by financing activities		5,437,609			2,876,964
Net cash (used in) provided by financing activities								(329	)		5,438

Net change to cash and cash equivalents		9,319,664			1,116,087			3,784			9,320
Cash and cash equivalents at beginning of period		2,999,053			738,688			29,683			2,999
Cash and cash equivalents at end of period	$	12,318,717		$	1,854,775		$	33,467		$	12,319

Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,091,927		$	380,084		$	302		$	1,092
Cash paid for income taxes	$	14,075		$	13,000		$	68		$	14

Non-cash activities:
Finance lease right-of-use assets and liabilities							$	514		$	-
Conversion of promissory notes							$	400		$	1,010
Conversions of debentures payable	$	1,356,452		$	1,804,657		$	-		$	1,356
Conversion of promissory notes	$	1,009,792		$	-
Operating lease right-of-use assets and liabilities	$	466,105		$	-		$	-		$	466
Common stock issued to settle obligations	$	30,000		$	-		$	-		$	30
Issuance of common stock associated with subscriptions	$	5,365		$	1,168,074		$	-		$	5
Exchange of common stock to preferred stock	$	-		$	14,725,000
Conversion of accrued interest to promissory notes	$	-		$	1,500,000
Beneficial conversion feature on debentures payable	$	-		$	379,183
Discount on debentures payable	$	-		$	28,021

See accompanying notes to condensed consolidated financial statements.

MariMed Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

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, 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.

~~In 2018,~~Over the last few years, the Company made the strategic decision to transition from a consulting business to a direct owner and operator of cannabis licenses in high-growth states. Core to this transition is the acquisition and ~~operator~~consolidation of ~~seed-to-sale operations (hereinafter referred to as~~ the Company’s clients (the “Consolidation Plan”). ~~The Consolidation Plan calls for the acquisition of its cannabis-licensed clients located in Delaware, Illinois, Maryland, Massachusetts, and Nevada. In addition,~~Among several benefits, the Consolidation Plan ~~includes the potential acquisition of a Rhode Island asset. All of these acquisitions are subject to state approval, and once consolidated, the entities will operate under the MariMed banner.~~

To date, acquisitions of the licensed businesses in Massachusetts and Illinois have been completed and establish the Company as a fully integrated seed-to-sale multi-state operator. 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 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.

~~A goal in completing this transition from a consulting business to a direct owner of cannabis licenses and operator of seed-to-sale operations is to~~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~~businesses and manage the continuing growth of their operations.

To date, the Company’s acquisition and consolidation of its cannabis-licensed clients’ retail businesses in Illinois and retail and wholesale businesses in Massachusetts have been completed. In April 2022, the acquisition of its client’s wholesale business in Maryland, and a third-party wholesale business in Illinois were consummated. The acquisitions of clients’ retail and wholesale businesses in Nevada and Delaware are at various stages of completion and subject to each state’s laws governing the ownership transfer of cannabis licenses and other closing conditions. Delaware will require a modification of current cannabis ownership laws to permit for-profit ownership, which is expected to occur when the state legalizes recreational adult-use cannabis. Until the law changes and the acquisition is approved, the Company continues to generate revenue from rental income, management fees, and licensing royalties.

In addition to the aforementioned acquisitions of its cannabis-licensed clients, in February 2022, the Company was notified that it was awarded a cannabis dispensary license from the state of Ohio, for which it had previously applied. The Company is awaiting the final verification process to be completed by the state before commencing cannabis operations in this state.

The Company’s transition to a fully integrated muti-state cannabis operator (“MSO”) is part of a strategic growth plan (the “Strategic Growth Plan”) it 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 expanding into additional states with legal cannabis programs.

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 quality 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 proprietary~~Company markets its high-quality cannabis ~~genetics produce~~ flowers and concentrates under the ~~brand name~~award-winning¹ Nature’s ~~Heritage™, and cannabis-infused products~~Heritage brand; chewable tablets under the brand names Kalm ~~Fusion®, in the form of chewable tablets~~Fusion and ~~drink powder mixes, and~~K Fusion; all natural fruit chews under the award-winning¹Betty’s ~~Eddies® brand of all natural fruit chews. Both cannabis-infused~~Eddies brand; brownies, cookies, and other social sweets under the Bubby’s Baked brand; and powder drink mixes under the Vibations: High + Energy brand. The Company’s brands ~~are top selling~~have been top-selling products in Maryland and ~~Massachusetts~~Massachusetts.²~~and the~~The Company intends to introduce additional ~~products~~product lines under these brands in ~~2021. The Company’s brand of hemp-infused cannabidiol (“CBD”) products, Florance™, is distributed in~~ the ~~United States and abroad.~~foreseeable future.

The Company also has ~~exclusive sublicensing~~strategic alliances with prominent brands. The Company has partnered with renowned 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™~~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 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 implementation of its aforementioned Consolidation Plan has 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 impacted, as further discussed in this report.

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

The Company was incorporated in Delaware in January 2011 under the name Worlds Online Inc. ~~Initially,~~The Company’s stock is quoted on the OTCQX market under the ticker symbol MRMD. In April 2022, the Company ~~developed and managed online virtual worlds. By early 2014, this line~~applied to list its shares of ~~business effectively ceased operating, and~~common stock on the ~~Company pivoted into the legal cannabis industry.~~Canadian Securities Exchange, which application is currently pending.

¹Awards won by the Company’s Betty’s ~~Eddies®~~Eddies brand include LeafLink 2021 Best Selling Medical Product, Reddit Sparkie 2021 Best Edible, Respect My Region 2021 Hottest Edible, LeafLink 2020 Industry Innovator, and Explore Maryland Cannabis 2020 Edible of the ~~Year,~~Year. Awards won by the Company’s Nature’s Heritage brand include the Cultivators Cup 2021 Silver Medal and ~~LeafLink 2019 Best Selling Medical Product.~~the High Times Cannabis Cup 2021 Bronze Medal.

²Source: LeafLink Insights 2020.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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, ~~2020.~~2021.

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

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of MariMed Inc. and the following majority-owned ~~subsidiaries:~~subsidiaries at March 31, 2022:

SCHEDULE OF MAJORITY OWNED SUBSIDIARIES

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

Intercompany accounts and transactions have been eliminated.

Use of Estimates

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.

Cash Equivalents

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.

At both March 31, 2022 and December 31, 2021, cash of approximately $5,101,000 was held in escrow, primarily comprised of a $5,000,000 escrow deposit in connection with the acquisition of Kind Therapeutics USA LLC as further discussed in Note 3 – Acquisitions.

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

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 a reserve of approximately $~~40.9~~ 41.4~~million and $40.0~~ million at both March 31, ~~2021~~2022 and December 31, ~~2020, respectively. Please~~2021. For further discussion on receivable reserves, please refer to Note 1718 – Bad Debts ~~for further discussion on receivable reserves.~~and the Bankruptcy Claim section of Note 20 – Commitments and Contingencies.

Inventory

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 ~~write-down~~reserve if necessary. As of the date of this report, no reserve was deemed necessary.

Investments

Investments are comprised of equity 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.

Revenue Recognition

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:

	●	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.

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.

The Company’s main sources of revenue are comprised of the following:

	●	Product Sales – direct sales of cannabis and cannabis-infused products primarily by the Company’s ~~dispensary~~retail dispensaries and wholesale operations in Massachusetts and Illinois, and sales of hemp and hemp-infused products. An increase in product sales is expected 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).Illinois. This revenue is recognized when products are delivered or at retail 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 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. 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~~resale of cultivation and production resources, supplies, and equipment, ~~which~~acquired by the Company ~~acquires and resells~~from top national vendors at volume discounted prices, to its clients ~~or third parties~~and third-parties within the cannabis industry. The Company recognizes this revenue after the delivery and acceptance of goods by the purchaser.

	●	Licensing – ~~royalties~~revenue from the ~~licensed distribution~~sale of ~~the~~ Company’s branded products including Betty’s Eddies and Kalm ~~Fusion® and Betty’s Eddies®,~~Fusion, and from the 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.

Research and Development Costs

Research and development costs are charged to operations as incurred.

Property and Equipment

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, forty ~~years~~;years; tenant improvements, the remaining duration of the related lease; furniture and fixtures, sevento ten ~~years~~;years; and machinery and equipment, ten ~~years~~.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~~ In the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, based on the results of management’s impairment analyses, there were no0impairment losses.

Leases

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.~~

updates. Under ASC 842, ~~is intended~~arrangements that are determined to ~~improve financial reporting~~be leases with a term greater than one year are accounted for by the recognition 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 (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, that 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.

Impairment of Long-Lived Assets

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.

Fair Value of Financial Instruments

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:

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.

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 three months ended March 31, ~~2021~~2022 and ~~2020:~~2021:

SCHEDULE OF ASSUMPTIONS USED

Three Months Ended
March 31,

2021

2020

2022

2021

Life of instrument

3.0 to 5.0 years

3.0 years

3.0 to 5.0 years

Volatility factors

1.230 to 1.266

1.059

1.230 to 1.266

Risk-free interest rates

0.36% to 0.85%

1.30%

0.36% to 0.85%

Dividend yield

*	No options or warrants were issued by the Company during the three months ended March 31, 2022.

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.

Extinguishment of Liabilities

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.

Stock-Based Compensation

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.

Income Taxes

The Company uses the asset and liability method to account for income taxes in accordance with ASC 740, Income Taxes. Under this method, deferred income tax assets and liabilities are recorded for the future tax consequences of differences between the tax basis and financial reporting basis of assets and liabilities, measured using 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 three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

Certain of the Company’s subsidiaries are subject to the provisions of Section 280E of the Internal Revenue Code, as amended, which prohibits businesses from deducting certain expenses associated with the trafficking of controlled substances within the meaning of Schedule I and II of the Controlled Substances Act. Such non-deductibility of certain ordinary business expenses results in permanent differences and can cause the Company’s effective tax rate to be highly variable and not necessarily correlated with pre-tax income.

Related Party Transactions

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.

Comprehensive Income

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~~periods covered in the financial statements.

Earnings Per Share

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.

~~As of~~At March 31, ~~2021~~2022 and ~~2020,~~2021, there were potentially dilutive securities convertible into shares of common stock comprised of (i) stock options – convertible into ~~11,017,750~~39,811,671 and ~~6,241,250~~11,017,750 shares, respectively, (ii) warrants – convertible into ~~32,282,708~~26,351,571 and ~~11,960,107~~32,282,708 shares, respectively, (iii) Series B preferred stock – convertible into 4,908,333 shares in both periods, (iv) Series C preferred stock – convertible into 31,081,080 ~~and~~ 0 shares ~~respectively,~~in both periods, and (v) ~~debentures payable~~promissory notes – convertible into 0 and ~~79,324,861~~ ~~shares, respectively, and (vi) promissory notes – convertible into~~ 10,705,513 ~~and~~ ~~1,464,435~~ shares, respectively.

For the three months ended March 31, 2022 and 2021, the aforementioned potentially dilutive securities increased the number of weighted average common shares outstanding on a diluted basis by 44,127,540 and 35,613,671~~million~~ shares, ~~determined in accordance with ASC 260, which are included~~respectively. Such share amounts were reflected in the calculation of diluted net income per share for this period. For the three months ended March 31, 2020, the potentially dilutive securities had an anti-dilutive effect on earnings per share, and in accordance with ASC 260, were excluded from the diluted net income per share calculations, resulting in identical basic and fully diluted net income per share for that period.such periods.

Commitments and Contingencies

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.

Beneficial Conversion Features on Convertible Debt

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, 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.

Risk and Uncertainties

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

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.

Off Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

Recent Accounting Pronouncements

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.

NOTE 3 – ACQUISITIONS

Kind Therapeutics USA LLC

In December 2021, the Company entered into a membership interest purchase agreement with the members of Kind Therapeutics USA LLC, the Company’s client in Maryland that holds licenses for the cultivation, production, and dispensing of medical cannabis (“Kind”), to acquire 100% of the equity ownership of Kind in exchange for $13.5 millionpayable in cash (subject to adjustment) and $6.5 millionpayable by the issuance of four-year 6.0% promissory notes to the members of Kind, secured by a first priority lien on the Company’s property in Hagerstown, MD. Upon execution of the membership interest purchase agreement, the Company deposited, in escrow, the sum of $5.0 millionas a contract down-payment.

In April 2022, the Maryland Medical Cannabis Commission approved the Company’s acquisition of Kind, and the acquisition was consummated by the parties. Accordingly, Kind will be consolidated into the financial results of the Company commencing on the closing date of the acquisition. Following the closing of the transaction, the Maryland litigation between the Company and the members of Kind was dismissed as further discussed in Note 20 – Commitments and Contingencies.

Simultaneous with the Kind membership purchase agreement, the Company entered into a membership interest purchase agreement with one of the members of Kind to acquire such member’s entire equity ownership interest in (i) Mari Holdings MD LLC (“Mari-MD”), the Company’s majority owned subsidiary that owns production and retail cannabis facilities in Hagerstown, MD and Annapolis, MD, and (ii) Mia Development LLC (“Mia”), the Company’s majority owned subsidiary that owns production and retail cannabis facilities in Wilmington, DE. The purchase price of $2 million in the aggregate is expected to be paid, and the transaction consummated, upon the dismissal of the derivative claims in the DiPietro lawsuit in June 2022, as further discussed in Note 20 – Commitments and Contingencies. After this transaction is consummated, the Company’s ownership of Mari-MD and Mia shall increase to 99.7% and 94.3%, respectively.

The Harvest Foundation LLC

In ~~August~~ 2019, the Company entered into a purchase agreement to acquire ~~100%~~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~~state regulatory approval of the ~~transaction. At this time, the state has paused the processing of cannabis license transfers, without indicating when it will resume.~~transaction and other closing conditions. Upon ~~the resumption of these activities~~approval, and the ~~ensuing approval by~~fulfillment of other closing conditions, the ~~state,~~ownership of Harvest will be transferred to the Company, ~~expects to consummate this transaction whereby~~and the operations of Harvest will begin to be consolidated into the Company’s financial statements.There is no assurance that the closing conditions to the Company’s acquisition of Harvest, including regulatory approval, will be achieved or that the acquisition will be consummated.

The purchase price is comprised of the issuance of (i) 1,000,000 shares of the Company’s common stock, in the aggregate, to the 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. 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.~~close.

~~Kind Therapeutics USA Inc.~~

In the fall of 2016, the members of Kind Therapeutics USA Inc., the Company’s cannabis-licensed client in Maryland that holds licenses for the cultivation, production, and dispensing of medical 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 $6.3~~ ~~million in cash,~~ ~~2,500,000~~ shares of the Company’s common stock, and other consideration. The acquisition is subject to approval by the MMCC, which will be applied for following the resolution of the litigation with Kind discussed below.

Also in December 2018, (i) MariMed Advisors Inc., the Company’s wholly owned subsidiary, and Kind entered into a management services agreement to 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 lease with Kind for Kind’s utilization of the Company’s~~ ~~180,000~~ square foot cultivation and production facility in Hagerstown, 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 constructions, for the development of a dispensary which would be leased to Kind.~~

In 2019, the members of Kind sought to renegotiate the terms of the MOU and have subsequently sought to renege on both the original partnership/joint venture and the MOU. The Company engaged with Kind in good faith in an attempt to reach updated terms acceptable to both parties, however Kind failed to reciprocate in good faith, resulting in an impasse. Incrementally, both parties through counsel further sought to resolve the impasse, however such initiative resulted in both parties commencing legal proceedings. As a result, the consummation of this acquisition has been delayed and may not ultimately be completed. The litigation is further discussed in Note 19 – ~~Commitments and Contingencies~~.

~~MediTaurus~~Meditaurus LLC

In May 2019, the Company entered into a purchase agreement to acquire MediTaurus LLC (“MediTaurus”), a company formed and owned by Jokubas Ziburkas PhD, a neuroscientist and leading authority on CBD and the endocannabinoid system. The Company sells CBD products developed by MediTaurus in the United States and Europe under its Florance™ brand.

~~Pursuant to the purchase agreement,~~September 2021, the Company acquired the remaining ~~70%~~30.0% ownership interest of ~~MediTaurus on June 1, 2019. The purchase price was $2.8~~ ~~million, comprised~~Meditaurus LLC, a developer of ~~cash payments totaling $~~CBD products sold under the Florance brand name (“Meditaurus”), in exchange for ~~720,000~~ ~~and~~ ~~520,000~~100,000 shares of the Company’s common stock, valued at approximately $~~2,080,000~~94,000~~. The~~, and $10,000 in cash. In 2019, the Company ~~expects to complete the acquisition~~had acquired a 70.0% ownership interest in Meditaurus in exchange for $2.8 million of ~~the remining~~ ~~30%~~ ~~of MediTaurus in 2021.~~cash and stock.

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~~noncontrolling interest of approximately $975,000 was eliminated on the ~~acquisition date:~~date such interest was acquired in September 2021, 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 balance sheet. As part of this transaction, the initial purchase agreement was amended whereby any and all future license fees and payments to Meditaurus were eliminated.

~~SCHEDULE OF FAIR VALUE OF ASSETS ACQUIRED ON ACQUISITION~~

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

~~Based~~Beverly Asset Purchase

In November 2021, the Company entered into an asset purchase agreement to acquire the cannabis license, property lease, and other assets and rights of, and to assume the liabilities and operating obligations associated with, a cannabis dispensary that is currently operating in Beverly, MA. The purchase price is comprised of 2,000,000 shares of the Company’s common stock and $5.1 million in cash, with the cash amount to be paid on a ~~valuation~~monthly basis as a percentage of ~~MediTaurus in late 2019,~~ the ~~goodwill recorded in connection~~business’ monthly gross sales.

The purchase is contingent upon the approval of the Massachusetts Cannabis Control Commission, which is expected during the third quarter of 2022. Concurrent with the ~~transaction~~execution of this agreement, the parties entered into a consulting agreement pursuant whereby the Company shall provide certain oversight services related to the development, staffing, and operation of the business in exchange for a monthly fee.

Green Growth Group Inc.

In January 2022, the Company entered into a stock purchase agreement to acquire 100% of the equity ownership of Green Growth Group Inc., an entity that holds a wholesale cannabis license in the state of Illinois, in exchange for $1.9 million in cash and shares of the Company’s common stock valued at $1.5 million. The Company made a good faith deposit of $100,000 on the agreement date, which comprises the balance of non-current Investments on the balance sheet.

In March 2022, the acquisition was ~~written off.~~approved by the Illinois Department of Agriculture, and in April 2022, the parties consummated the transaction.

NOTE 4 – INVESTMENTS

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company’s investments were comprised of the ~~following:~~following (in thousands):

SCHEDULE OF INVESTMENTS

	March 31, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Current investments:
Flowr Corp. (formerly Terrace Inc.)	$	1,312,028	$	1,357,193	$	299	$	251
WM Technology Inc.						954		-
Total current investments						1,253		251

Non-current investments:
Green Growth Group, Inc.						100		-
MembersRSVP LLC		1,165,788		1,165,788		-		-

Total investments	$	2,477,816	$	2,522,981	$	1,353	$	251

Flowr Corp. (formerly Terrace Inc.)

In December 2020, Terrace Inc., a Canadian cannabis entity in which the Company had an ownership interest of ~~8.95%~~8.95% (“Terrace”), was acquired by Flowr Corp. (TSX.V: FLWR; OTC: FLWPF), a Toronto-headquartered cannabis company with operations in Canada, Europe, and Australia (“Flowr”). Under the terms of the deal, each shareholder of Terrace received 0.4973 of a share in Flowr for each Terrace share held.

This investment is carried at it fair value. ~~During~~The increase in fair value of approximately $48,000 during the three months ended March 31, 2022, and the decrease in fair value of approximately $45,000 during the three months ended March 31, 2021, ~~and 2020, the decrease in fair value of this investment of approximately $45,000~~ ~~and $687,000, respectively, was~~were reflected in the Gain (Loss) OnChange In Fair Value Of ~~Investments~~Investment on the respective statement of operations.

Green Growth Group Inc.

In January 2022, the Company made a good faith deposit of $100,000 in connection with the acquisition of Green Growth Group, Inc. as previously discussed in Note 3 – Acquisitions.

MembersRSVP LLC

In ~~August 2018, the Company invested $300,000~~ ~~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 cannabis-specific customer relationship management software, branded under the name Sprout.~~

~~During the three months ended March 31, 2020, the investment was accounted for under the equity method. There was no change to the carrying value of the investment during this period.~~

In January 2021, the Company and ~~MRSVP~~MembersRSVP LLC, an entity that develops cannabis-specific software (“MRSVP”), in which the Company owned a 23.0% membership interest, entered into an agreement whereby the Company ~~assigned and transferred~~returned membership interests comprising an ~~11%~~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~~

In addition to the ~~interest transfer,~~reduction of the Company’s ownership interest ~~in MRSVP was reduced~~ to ~~12%~~12.0 ~~on a fully diluted basis.~~

~~As part of the agreement,~~%, the Company relinquished its right to appoint a member to the board of MRSVP. In light of the Company no longer having the ability to exercise significant influence over MRSVP, the Company ~~no longer accounts~~discontinued accounting for this investment under the equity ~~method. The Company’s share~~method as of ~~MRSVP’s future earnings or losses shall not be recorded, and the earnings and losses previously recorded will remain part of the carrying amount of the investment of approximated $1,166,000~~.January 1, 2021.

In ~~accordance with ASC 321,~~ ~~Investments – Equity Securities~~,September 2021, MRSVP sold substantially all of its assets pursuant to an asset purchase agreement. As a result of this agreement, the Company ~~elected~~received cash proceeds of $1,475,000, representing the ~~measurement alternative~~Company’s pro rata share of the cash consideration received by MRSVP at the closing of the transaction. The cash proceeds reduced the Company’s MRSVP investment balance to ~~value this equity investment without~~zero and resulted in a ~~readily determinable fair value. Following the termination~~gain of ~~equity accounting, there has been no impairment to this investment, nor any observable price changes to investments in the entity. Accordingly, this investment continued to be carried at~~ approximately $~~1,166,000~~309,000.

As an ongoing member of MRSVP, the Company was entitled to its pro rata share of any additional consideration received by MRSVP pursuant to the asset purchase agreement, which may include securities or other forms of non-cash or in-kind consideration and holdback amounts, if and when it is received and distributed by MRSVP. In February 2022, the Company received 121,968 shares of common stock of WM Technology Inc. (Nasdaq: MAPS), a technology and software infrastructure provider to the cannabis industry, representing the Company’s pro rata share of the additional consideration received by MRSVP pursuant to the asset purchase agreement. The fair value of these shares at March 31, ~~2021.~~2022 of approximately $954,000

~~The Company will continue to apply~~was reflected in current Investments on the alternative measurement guidance until this investment does not qualify to be so measured. The Company may subsequently elect to measure this investment at fair value, with changes in fair value recognized in net income.balance sheet, and the corresponding gain comprised the balance of Other Investment Income on the statement of operations for the three months ended March 31, 2022.

NOTE 5 – DEFERRED RENTS RECEIVABLE

The Company is the lessor under operating leases which contain ~~rent holidays,~~ escalating rents over time, rent holidays, 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.

The Company leases the following owned properties:

	●	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 under a triple net lease that ~~commenced in 2017~~ ~~and~~ expires in 2035.

	●	Maryland – a 180,000 square 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 2018~~ ~~and~~ 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~~expires in ~~2017~~ ~~and~~ ~~expires in~~October 2022.

The Company subleases the following properties:

	●	Delaware – a 4,000 square ~~feet of retail space in a multi-use building space which the Company developed into a~~foot cannabis dispensary ~~and~~which is subleased to its cannabis-licensed client under a under a ~~triple net~~sublease ~~lease~~ expiring in ~~December 2021 with a five-year option to extend~~April 2027.

	●	Delaware – a 100,000 square foot warehouse, of which the Company ~~is developing~~developed 60,000 square feet into a cultivation ~~and processing~~ facility ~~to be~~that is subleased to its cannabis-licensed client. T~~he lease~~The sublease expires in March 2030, with an option to extend the term for three additional five-year periods.The Company intends to develop the remaining space into a processing facility.

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

~~As of~~At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, cumulative fixed rental receipts under such leases approximated $~~15.1~~19.9 million and $~~13.9~~18.7 million, respectively, compared to revenue recognized on a straight-line basis of approximately $~~17.0~~21.5 million and $~~15.8~~20.4 ~~million.~~million, respectively. Accordingly, the deferred rents receivable balance approximated $1.6 million and $~~1.9~~1.7 million at March 31, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively.

Future minimum rental receipts for ~~non-cancelable~~non-cancellable leases and subleases as of March 31, ~~2021 were:~~2022 were (in thousands):

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

		2021
2021	$	3,593,589
2022		4,712,200	$	3,620
2023		4,417,620		4,563
2024		4,476,205		4,626
2025		4,543,917		4,695
2026				3,916
Thereafter		39,589,047		35,830
Total	$	61,332,578	$	57,250

NOTE 6 – NOTES RECEIVABLE

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, notes receivable, including accrued interest, consisted of the ~~following:~~following (in thousands):

SCHEDULE OF NOTES ~~RECEIVABLE~~RECEIVABLES

	March 31, 2021		December 31, 2020		March 31, 2022		December 31, 2021
First State Compassion Center	$	453,248	$	468,985
First State Compassion Center (initial note)					$	385	$	403
First State Compassion Center (secondary note)						7,982		7,845
Healer LLC		879,640		899,226		866		866
High Fidelity Inc.		254,919		254,919		-		-
Total notes receivable		1,587,807		1,623,130		9,233		9,114
Notes receivable, current portion		374,978		658,122		129		127
Notes receivable, less current portion	$	1,212,829	$	965,008	$	9,104	$	8,987

First State Compassion Center

The Company’s cannabis-licensed client in Delaware, First State Compassion Center (“FSCC”), issued a 10-year promissory note to the Company in May 2016 in the amount of $700,000bearing interest at a rate of ~~12.5%~~12.5% per annum, as amended. The monthly payments of approximately $10,000will continue through April 2026, at which time the note will be ~~fully~~ paid ~~down.~~in full. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the current portion of this note approximated $~~68,000~~77,000 and $~~66,000~~75,000, respectively, and was included in Notes Receivable, Current Portion on the respective balance sheets.

In December 2021, financed trade accounts receivable balances from FSCC of approximately $7,845,000 in the aggregate were converted into notes receivable whereby FSCC issued promissory notes to the Company in the aggregate amount of approximately $7.8 million bearing interest at a rate of 6.0% per annum. The promissory notes call for the periodic payment of principal and interest throughout the term of the note which matures in December 2025. At March 31, 2022, the balance of the note included approximately $138,000 of unpaid accrued interest.

Healer LLC

In ~~2018 and 2019,~~March 2021, the Company ~~loaned an aggregate~~was issued a promissory note in the principal amount of approximately $~~800,000~~894,000 tofrom Healer LLC, an entity that provides cannabis education, dosage programs, and products developed by Dr. Dustin Sulak, an integrative medicine physician and nationally renowned cannabis practitioner (“Healer”). ~~Healer issued promissory notes to~~The principal balance of the ~~Company for the aggregate amount loaned that bear interest at~~ 6% ~~per annum, with principal and interest payable on maturity dates three years from the respective loan dates.~~

~~In March 2021, the Company was issued a revised promissory~~ note ~~from Healer in the principal amount of approximately $894,000~~ ~~representing the~~represents previous loans extended to Healer by the Company of $800,000 plus accrued interest through the revised promissory note issuance ~~date.~~date of approximately $94,000. The revised promissory note bears interest at a rate of 6% 6.0% 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 ~~timely payment.~~payment when due. In March 2021, the Company offset approximately $28,000of licensing fees payable to Healer against the principal balance of the revised promissory note, reducing the principal amount to approximately $866,000.

At both March 31, ~~2021~~2022 and December ~~30, 2020, the total amount of principal and accrued interest due under the aforementioned promissory notes approximated $880,000~~ ~~and~~ ~~$899,000~~, ~~respectively, of which~~31, 2021, approximately $52,000~~and $337,000~~ was ~~current, respectively.~~current.

High Fidelity

In August ~~2019,~~2021, the Company ~~loaned $250,000~~ was fully repaid on a loan to High Fidelity Inc., an entity ~~that owns and operates two seed-to sale medical marijuana facilities~~with cannabis operations in the state of ~~Vermont~~Vermont. The loan had a principal balance of $250,000 and ~~produces its own line of CBD products. The note bears~~bore interest at a rate of ~~10.0%~~ 10.0% per annum, ~~with interest-only month payments through its extended maturity in June 2021, at which time the principal amount is due.~~

~~Maryland Health & Wellness Center Inc.~~

~~In 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 loan bearing interest at a rate of~~ 8% 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.

NOTE 7 – INVENTORY

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, inventory was comprised of the ~~following:~~following (in thousands):

SCHEDULE OF INVENTORY

	March 31, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Plants	$	3,713,877	$	3,352,425	$	2,413	$	1,015
Ingredients and other raw materials		234,826		176,338		494		262
Work-in-process		424,435		468,377		4,066		4,661
Finished goods		3,081,190		2,833,431		5,265		3,830
Total inventory	$	7,454,328	$	6,830,571	$	12,238	$	9,768

NOTE 8 – PROPERTY AND EQUIPMENT

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, property and equipment consisted of the ~~following:~~following (in thousands):

SCHEDULE OF PROPERTY AND EQUIPMENT

	March 31, 2021			December 31, 2020			March 31, 2022			December 31, 2021
Land	$	3,988,810		$	3,988,810		$	4,450		$	4,450
Buildings and building improvements		29,447,594			29,309,856			37,674			35,231
Tenant improvements		8,825,911			8,844,974			16,819			9,745
Furniture and fixtures		671,986			619,880			1,909			1,888
Machinery and equipment		5,111,005			4,620,924			8,632			7,221
Construction in progress		4,788,041			3,140,807			3,635			10,569
		52,833,347			50,525,251			73,119			69,104
Less: accumulated depreciation		(5,342,972	)		(4,888,722	)		(7,637	)		(6,954	)
Property and equipment, net	$	47,490,375		$	45,636,529		$	65,482		$	62,150

During the three months ended March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, additions to property and equipment approximated $~~2,308,000~~4,015,000 and $~~572,000~~3,224,000, respectively.

The ~~2021 and 2020~~2022 additions were primarily comprised of (i) ~~construction~~the development of facilities in ~~Mt. Vernon, IL,~~Annapolis, MD and Beverly, MA, and (ii) purchases of building improvements, machinery, and equipment ~~purchases for~~at the facilities in ~~Massachusetts, Maryland, Illinois,~~Hagerstown, MD and ~~Delaware.~~New Bedford, MA. The ~~2019~~2021 additions consisted primarily of (i) the ~~commencement~~development of ~~construction~~facilities in Annapolis, MD and Milford, DE, and ~~Annapolis, MD,~~ (ii) ~~the continued buildout~~purchases of ~~properties in~~building improvements, machinery, and equipment at the Hagerstown, MD ~~New Bedford, MA,~~facility and ~~Middleborough, MA, and (ii) improvements to the Wilmington, DE and Las Vegas, NV properties.~~both facilities in Massachusetts.

The construction in progress balances of approximately $~~4.8~~ 3,635,000~~million~~ and $~~3.1~~ 10,569,000~~million~~ at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, consisted of ~~the commencement~~development of ~~construction of properties~~facilities in ~~Metropolis, IL,~~Annapolis, MD, Beverly, MA, and Milford, ~~DE, and Annapolis, MD.~~DE.

Depreciation expense for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 approximated $~~462,000~~ 702,000and $~~484,000~~462,000, respectively.

NOTE 9 – INTANGIBLES

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, 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 March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the carrying value of these cannabis licenses approximated $~~622,000~~327,000 and $~~161,000~~162,000, 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~~ 2,068,000~~million~~ at March 31, ~~2021~~2022 and December 31, ~~2020~~2021 was deemed to be unimpaired.

NOTE 10 – ~~DEBT~~MORTGAGES

~~Mortgages Payable~~

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, mortgage balances, including accrued interest, were comprised of the ~~following:~~following (in thousands):

SCHEDULE OF MORTGAGES ~~PAYABLE~~

March 31,
2021 December 31,
2020
Bank of New England – Massachusetts properties $ 12,749,474 $ 12,834,090
Bank of New England – Delaware property 1,547,757 1,575,658
DuQuoin State Bank – Illinois properties 806,980 814,749
South Porte Bank – Illinois property 894,587 906,653
Total mortgages payable 15,998,798 16,131,150
Mortgages payable, current portion (1,382,411 ) (1,387,014 )
Mortgages payable, less current portion $ 14,616,387 $ 14,744,136

	March 31, 2022		December 31, 2021
Bank of New England – New Bedford, MA and Middleboro, MA properties	$	12,409	$	12,499
Bank of New England – Wilmington, DE property		1,434		1,463
DuQuoin State Bank – Anna, IL and Harrisburg, IL properties		770		778
DuQuoin State Bank – Metropolis, IL property		2,607		2,658
South Porte Bank – Mt. Vernon, IL property		820		816
Total mortgages payable		18,040		18,214
Mortgages payable, current portion		1,416		1,400
Mortgages payable, less current portion	$	16,624	$	16,814

~~In November 2017, the~~The Company ~~entered into a~~ 10~~-year mortgage agreement with Bank of New England in the amount of $4,895,000~~ ~~(the “Initial Mortgage”) for the purchase of a~~ ~~138,000~~ ~~square foot industrial property in New Bedford, Massachusetts, within which the Company has built a~~ ~~70,000~~ square 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 $4.8~~ ~~million, the parties consummated~~maintains an amended and restated mortgage agreement with the Bank of New England bearing interest at a rate of 6.5% per annum that matures in August 2025. This mortgage is secured by the Company’s properties in New Bedford, MA and Middleboro, ~~in the amount of $13.0~~ ~~million bearing interest at a rate of~~ ~~6.5%~~ ~~per annum that~~ ~~matures in August 2025~~ ~~(the “Refinanced Mortgage”).~~MA. Proceeds from ~~the Refinanced Mortgage~~this mortgage were used to pay down a previous mortgage with the ~~Initial Mortgage~~Bank of New England of approximately $4.8 million on the New Bedford property, and approximately $7.2 million of promissory notes as further ~~described below.~~discussed in Note 11 – Promissory Notes. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the outstanding principal balance of ~~the Refinanced Mortgage~~this note approximated $~~12.7~~12,409,000 ~~million~~ and $~~12.8~~12,499,000 ~~million,~~, respectively, of which approximately $~~341,000~~364,000 and $~~335,000~~358,000, respectively, was current.

The Company ~~maintains another~~has a second mortgage with Bank of New England ~~for~~that is secured by the ~~2016 purchase of a~~ ~~45,070~~ ~~square foot building~~Company’s property in Wilmington, ~~Delaware which was developed into a cannabis seed-to-sale facility and is currently leased to the Company’s cannabis-licensed client in that state.~~DE. The mortgage matures in 2031 with monthly principal and interest payments at a rate of ~~5.25%~~5.25% per annum through September 2021, and thereafter the rate adjusting every five years to the then prime rate plus ~~1.5%~~1.5% with a floor of ~~5.25%~~5.25% per annum. At September 2021, the interest rate remained at 5.25%. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the outstanding principal balance on this mortgage approximated $~~1.5~~1,434,000 ~~million~~ and $~~1.6~~1,463,000 ~~million,~~, respectively, of which approximately $~~115,000~~122,000 and $~~114,000~~120,000, respectively, was current.

~~In May 2016, the~~The Company ~~entered into~~maintains a mortgage agreement with DuQuoin State Bank (“DSB”) for ~~the~~its purchase of ~~two~~ properties ~~which the Company developed into two~~ ~~3,400~~ ~~square foot free-standing retail dispensaries~~ in ~~Illinois.~~Anna, IL and Harrisburg, IL. 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 2021 at a rate of 6.75% per annum. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the outstanding principal balance on this mortgage approximated $~~807,000~~ 770,000and $~~815,000~~ 778,000respectively, of which approximately $~~32,000~~ 34,000and $~~31,000~~33,000, 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 were 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 a second 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 30.0% 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 70.0%. At March 31, 2022 and December 31, 2021, the outstanding principal balance on this mortgage approximated $2,607,000 and $2,658,000, respectively, of which approximately $76,000 and $73,000 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 ~~amendments to~~ the amended mortgage agreement, the ~~Company is making 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 ~~the amended~~its maturity in ~~maturity date in May 2021~~June 2022, at which time ~~the parties are expected to enter into a one-year renewal agreement.~~all remaining principal, interest and fees shall be due.

NOTE 11 – PROMISSORY NOTES

~~Notes Payable~~Promissory Note Retirements

~~In February 2020, pursuant to an exchange agreement as further described in Note 12 –~~ ~~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 $4.6~~ ~~million.~~ In March 2021, utilizing a portion of the proceeds from the Hadron transaction discussed in Note 1213 – Mezzanine Equity, the ~~$4.4M Notes were~~Company retired approximately $15.2 million of principal and interest on promissory notes issued in previous fiscal years to accredited individual and institutional investors. Additionally, a remaining debt discount of approximately $450,000 on one of the retired promissory notes (such discount having arisen from the issuance of warrants attached to such promissory note) was fully ~~paid down, along with accrued interest through the repayment date.~~amortized in this month.

~~In June 2019, the Company and MariMed Hemp Inc., its wholly-owned subsidiary (“MMH”), issued a secured promissory note in the principal amount of $~~~~10.0~~ ~~million (the “$10M Note”) to an unaffiliated party (the “Noteholder”). The $10M~~Promissory Note ~~provided for the repayment of principal plus a payment of $1.5~~Conversions ~~million (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.~~

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

~~The Company entered into a second amendment agreement with the Noteholder in June 2020, whereby (i) $352,000~~ ~~of outstanding principal of the $11.5M Note was converted into~~ ~~1,900,000~~ shares of the Company’s common stock (which did not result in a material extinguishment gain or loss as the conversion price approximated the price of the Company’s common stock on the agreement date), and (ii) the Company and MMH issued a second amended and restated promissory note in the principal amount of approximately $~~8.8~~ ~~million (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. In addition, the Company issued~~ ~~three-year~~ ~~warrants to the Noteholder to purchase up to~~ ~~750,000~~ ~~shares of common stock at an exercise price of $0.50~~ ~~per share. The fair value of these warrants on the issuance date of approximately $66,000~~ ~~was recorded as a discount to the $8.8M Note, which is being amortized to interest expense over the life of the $8.8M Note.~~

~~The $8.8M Note bears interest at a rate of~~ 15~~% per annum,~~ ~~matures in June 2022, and required a minimum amortization payment of $4,000,000~~ in July 2020, which the Company paid with a portion of proceeds of the Refinanced Mortgage discussed earlier in this footnote. The Company can prepay all, or a portion, of the outstanding principal and unpaid interest of the $8.8M Note, however if any prepayment is made prior to December 25, 2021, the Company shall be required to pay a prepayment premium equal to 10~~% of the principal amount being prepaid. The Noteholder has the right to require the redemption of up to $250,000~~ of principal and unpaid interest thereon per calendar month (the “Discretionary Monthly Redemptions”), which 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. As of December 31, 2020, the Company paid Discretionary Monthly Redemptions of $~~600,000~~ ~~in the aggregate, and accrued interest through such date of approximately $405,000, all in cash. Accordingly, the carrying value of the $8.8M Note was approximately $4.2~~ ~~million at December 31, 2020.~~

~~The Noteholder has 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. This non-detachable conversion feature of the $8.8M Note had no intrinsic value on the agreement date, and therefore~~ 0 ~~beneficial conversion feature arose.~~

During the three months ended March 31, 2021, the ~~Noteholder~~noteholder of an $8.8 million promissory note issued by the Company in June 2020 converted approximately $~~1,000,000~~ 1.0 millionof principal and ~~approximately~~ $10,000 of accrued interest into 3,365,972 shares of the Company’s common stock. ~~Also during~~After such conversion and cash payments of $4.6 million in the second half of fiscal 2020, this ~~period, the Company paid accrued interest of approximately~~ $~~104,000~~8.8 ~~in cash. Accordingly, the principal balance of the $8.8M Note~~million promissory note was ~~approximately~~amended and restated into a new $3.2 million ~~at March 31, 2021.~~promissory note.

~~The Company entered into~~During 2021, in a ~~third amendment agreement with~~series of transactions, the ~~Noteholder in April 2021 whereby the Company and MMH issued a third amended and restated promissory note in the principal amount of approximately~~noteholder converted $~~3.2~~ 2.8million ~~(the “$3.2M Note”), comprised of the remaining principal balance on the $8.8M Note. The $3.2M Note 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. 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 April 2019, MMH issued a secured promissory note in the principal amount of $1,000,000~~ ~~(the “$1M Note”) to an unaffiliated party. 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 on a month-to-month basis bearing interest at a rate of~~ 15~~% per annum. In September 2020, the Company paid down $500,000~~ ~~of principal on the $1M Note. At December 31, 2020, the outstanding balance consisted of $500,000~~ ~~of principal and approximately $467,000~~ ~~of unpaid accrued interest which included the $30,000~~ ~~Fee. 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, along with $200,000~~ ~~of accrued interest.~~

~~In March 2019, the Company raised $6.0~~ ~~million 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 “Service Fee”).~~ ~~The $6M Note’s initial maturity date of December 31, 2019 was extended to April 2020~~ ~~in accordance with its terms, with the Company paying a $300,000~~ ~~extension fee in December 2019 which was charged to interest expense.~~

~~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 $~~845,000~~ ~~through 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 “$900k Note”) was issued evidencing the Service Fee, bearing interest at a rate of~~ 12~~% per annum. The Company satisfied the $900k Note and accrued interest of $20,100~~ ~~in full as of the June 2020 maturity date by the payment in July 2020 of $460,050~~ ~~in cash, representing one-half of the principal and accrued interest, and the issuance in June 2020 of~~ ~~2,525,596~~ ~~shares of the Company’s common stock, in payment of the other half of the principal and accrued interest.~~

~~In September 2018, the Company raised $3.0~~ ~~million from the issuance of a secured promissory note to the Holding Party, 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.

~~As part of the $3M Note transaction, the Company issued three-year warrants to the Holding Party’s designees to purchase~~ ~~750,000~~8,033,296 shares of the Company’s common ~~stock at an exercise price of~~stock. At December 31, 2021, the outstanding balance on this note was $~~1.80~~400,000 ~~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. This discount was amortized to interest expense in 2018 and 2019.~~

~~In October 2020, the Company and the Holding Party entered into a second note extension agreement (the “Second Extension Agreement”) whereby the Company (i) paid $~~1 ~~million of principal and all outstanding accrued interest of approximately $333,000~~ ~~on the $6.8M Note; (ii) issued an amended and restated senior secured promissory note in the principal amount of $5,845,000~~ ~~(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”)~~. ~~The Amended Notes bear interest at a rate of~~ 12~~% per annum with~~ ~~maturity dates in September 2022, and can be prepaid in whole or in part at any time.~~

~~In consideration~~During the three months ended March 31, 2022, the noteholder converted the remaining principal balance of ~~the Second Extension Agreement, the Company (i) issued four-year warrants to the Holding Party’s designees to purchase up to~~ $~~5,000,000~~400,000 into 1,142,858 shares of the Company’s common ~~stock at~~stock. Upon this conversion, the $3.3 million note no longer had an ~~exercise price~~outstanding balance and was retired. All of $~~0.25~~ ~~per share; (ii) paid~~ the ~~Holding Party a fee~~aforementioned note conversions were effected within the terms of $~~100,000; and (iii) extended the security interest in certain Company properties~~their respective note agreements, and the ~~pledge of certain equity interests~~Company was not required to ~~secure the Amended Notes. The Company recorded~~record a ~~discount~~gain or loss on ~~the Amended Notes of approximately $573,000~~ ~~based on the fair value of~~ such ~~warrants on the issuance date, of which approximately $75,000~~ ~~was amortized as of the end of 2020, and the remainder to be amortized over the life of the Amended Notes. Accordingly, the carrying value of the Amended Notes approximated $8.3~~ ~~million at December 31, 2020, of which $1.9~~ ~~million was current.~~conversions.

~~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 12 –~~ ~~Mezzanine Equity,~~ ~~the Amended~~Promissory Notes ~~were fully paid down, along with accrued interest through the repayment date. In addition, the remaining discount of approximately $450,000~~Issued to Purchase Commercial Vehicles ~~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%~~5.74% per annum and matures in July 2026. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the balance of this note approximated $24,000 and $26,000, ~~respectively.~~respectively, of which approximately $5,000 was current in both periods.

In ~~addition to~~June 2021, the ~~above transactions,~~Company entered into a note agreement with Ally Financial for the purchase of a second commercial vehicle. The note bears interest at the ~~start~~rate of10.0% per annum and matures in May 2027. At March 31, 2022 and December 31, 2021, the balance of this note approximated $31,000 and $33,000, of which approximately $5,000 was current in both periods.

Promissory Note Issued by MariMed Hemp Inc.

In September 2020, the Company ~~was carrying~~paid down $~~3,190,000~~500,000 of principal on a $1.0 millionpromissory ~~notes~~note issued ~~to accredited investors bearing interest at rates ranging from~~ ~~6.5% to~~ 18~~% per annum (the “Existing Notes”). During 2020, the Company (i) raised approximately $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”)~~in 2019 by MariMed Hemp Inc., ~~(ii) repaid $2,100,000~~ ~~of the Existing Notes, (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 $2,037,000~~ ~~in the aggregate at December 31, 2020. This balance along with accrued interest through the repayment date of approximately $200,000~~ ~~were~~ ~~fully paid down in~~wholly-owned subsidiary. In March 2021, utilizing a portion of the proceeds from the Hadron transaction discussed in Note 1213 – Mezzanine Equity, the Company paid interest on this note of $200,000 and paid off the remaining principal of $500,000.

At March 31, 2022 and December 31, 2021, the Company was carrying an accrued interest balance of approximately $125,000 to cover interest due on this note.

Debt Maturities

~~As of~~At March 31, ~~2021,~~2022, the aggregate scheduled maturities of the Company’s total debt outstanding ~~were:~~were (in thousands):

SCHEDULE OF ~~AGGREGATE~~ MATURITIES OF OUTSTANDING DEBT ~~OUTSTANDING~~

2021	$	1,270,010

2022		516,481		$	1,267
2023		3,761,529			635
2024		582,894			673
2025		623,170			720
2026					764
Thereafter		12,497,810			14,037
Total		19,251,894			18,096
Less discounts		(12,268	)
	$	19,239,626

NOTE 1112 – DEBENTURES PAYABLE

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~~unaffiliated investor pursuant to an amended securities purchase ~~agreement (the “SPA”). The following table as of March 31, 2021 summarizes the purchase dates and selected terms of each debenture transaction that comprises the $21M Debentures:~~agreement.

~~SCHEDULE OF DEBENTURE TRANSACTION~~

Issue
Date 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
11/07/18 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 5,000,000
06/28/19 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
02/21/20 02/20/21 1,000,000 6.5% 6.5% 28,021 379,183 1,000,000

As of March 31, 2021, the holder of the $21M Debentures ~~(the “Holder”)~~ had converted ~~all~~the entire $21.0 million of ~~the $21M Debentures, along with~~principal and related accrued interest into the Company’s common stock in a series of conversions, at conversion prices equal to 8080.0% of a calculated average ~~as determined in accordance with the terms of the $21M Debentures,~~ of the daily volume-weighted price ~~during the ten consecutive trading days~~ preceding the date of conversion. ~~The conversion were limited in any given month to certain agreed-upon amounts based on the conversion price, and the Holder was also limited from beneficially owning more than~~ ~~4.99% of the Company’s outstanding common stock.~~

~~In conjunction with the issuance of the $21M Debentures, the Company issued the Holder~~ ~~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 2020. The fair value of the warrants of approximately $2.2~~ million 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, 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 shares issued pursuant to the terms of the SPA and the $21M Debentures.

~~Over the life of the $21M Debentures, the Holder 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~~were converted into 4,610,645 shares of common stock at a conversion price of $0.29 per ~~share.~~share during the three months ended March 31, 2021. Additionally, a remaining (i) original issue discount of approximately $52,000

, (ii) debt discount of approximately $39,000

~~All~~(such discount having arisen from the issuance of warrants attached to the $21M Debentures), and (iii) beneficial conversion feature of approximately $177,000 (such conversion feature having arisen from an in-the-money embedded conversion option on the commitment date), were fully amortized upon the final conversion of the ~~aforementioned~~$21M Debentures. All conversions were effected ~~in accordance with~~within the terms of the ~~respective convertible~~ debenture ~~agreement,~~agreements, and ~~therefore~~accordingly the Company was not required to record a gain or loss on such conversions.

~~During the year ended December 31, 2020, amortization of the beneficial conversion features, after adjustment for the aforementioned conversions, approximated $3.2~~ ~~million; amortization of the warrant discounts approximated $805,000; amortization of original issue discounts approximated $321,000; and interest expense approximated $224,000. At December 31, 2020, the aggregate outstanding principal balance of the $21M Debentures was $1.3~~ ~~million. Also on such date, the unamortized balances of the beneficial conversion features, the warrant discounts, and original issue discounts were approximately $177,000, $39,000, and $52,000, respectively. Accordingly, at December 31, 2020, the carrying value of the $21M Debentures approximated $1.0~~ ~~million, all of which was current.~~

~~During the three months ended March 31, 2021, amortization of the beneficial conversion features, after adjustment for the aforementioned conversions, approximated $177,000; amortization of the warrant discounts approximated $39,000; amortization of original issue discounts approximated $52,000; and interest expense approximated $1,000~~.

NOTE 1213 – MEZZANINE EQUITY

Series B Convertible Preferred Stock

In ~~February~~ 2020, the Company entered into an exchange agreement with two institutional shareholders (the ~~“TIS Exchange~~“Exchange Agreement”) whereby the Company (i) issued $4.4 million of promissory notes to the two institutional shareholders (such notes were retired in March 2021 as part of the promissory note retirements discussed in Note 11 – Promissory Notes), and (ii) 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 11 –~~ ~~Debt~~.stock.

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~~$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.~~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 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.

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~~ 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.

Series C 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 $23.0million of Units at a price of $3.70per Unit. Each Unit is comprised of one share of Series C preferred stock and a ~~four-year~~ four-year warrant to purchase two and one-half shares of common stock. Accordingly, the Company issued to Hadron 6,216,216shares of Series C preferred stock and warrants to purchase up to an aggregate of 15,540,540shares 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 $1.087per 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 $23.0million of proceeds received by the Company in March 2021, approximately (i) $~~7.8~~ 7.3million iswas designated to fund construction and upgrades of certain of the Company’s owned and managed facilities, of which ~~approximately $2.0~~ ~~million~~ was expended ~~during the three months ended March 31,~~in 2021, and (ii) $~~15.2~~ 15.7million was used to pay down debt and ~~obligations, comprised of principal and~~related 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 10 –~~ ~~Debt~~~~), and a portion of the~~ ~~Due To Related Parties~~ ~~balance~~as discussed in Note 1811 – ~~Related Party Transactions~~Promissory Notes.

The balance of the ~~committed~~ facility ~~of up to an additional $23.0 million is intended~~was designated to fund future acquisitions, including 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~~Kind acquisition, on the same aforementioned terms as the initial proceeds.

~~Provided that as at least~~ 50% Notwithstanding, Hadron did not fund the cash portion of the ~~shares of Series C convertible preferred stock remain outstanding,~~Kind purchase price, and the ~~holders shall have~~Company is currently in negotiations with Hadron to amend and extend the ~~right~~facility 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.be utilized for future expansion opportunities. There is no assurance that any extension will be implemented.

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.

NOTE 1314 – STOCKHOLDERS’ EQUITY

Stockholder Resolutions

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 million 700 million.

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 millionto 70 million.

Undesignated Preferred Stock

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

Common Stock

~~In February 2020, pursuant to the TIS Exchange Agreement discussed in Note 12 –~~ ~~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 $5,000~~ ~~(the par value of the exchanged common shares) and additional paid-in capital of approximately $14,720,000~~.

InDuring the three months ended March 31, 2022 and 2021, the Company granted 2,717 and 6,877shares of common stock, respectively, to an employee for services in lieu of salary. These granted shares, with a ~~current employee. The~~ fair value of ~~the shares of~~ approximately $2,000 in 2022 and $5,000~~was charged to employee compensation. These granted shares~~ in 2021, were yet to be issued by the end of the respective quarter, and were reflected in Common Stock Subscribed But Not Issued on the ~~related~~ balance sheet.

In ~~2020,~~March 2022, the Company ~~granted~~issued ~~109,210~~ 375,000shares of common stock ~~to a current employee. The fair value of the shares of~~valued at approximately $~~21,000~~ 274,000~~was charged to employee compensation during the period. Of these granted shares,~~ ~~11,413~~ ~~were yet to be issued at December 31, 2020 and were reflected~~ in ~~Common Stock Subscribed But Not Issued~~ ~~on the related balance sheet.~~

exchange for consulting services, In February 2021, the Company issued 42,857 shares of common stock to settle a $30,000 obligation. Based on the price of the Company’s common stock on the date of issuance, the Company incurred a non-cash loss of approximately $~~1,300~~1,000 which was reflected under Loss On ~~Debt Settlements~~Obligations Settled with Equity on the statement of operations. ~~No stock was issued to settle obligations during the same period in 2020.~~

During the three months ended March 31, 2021, ~~and 2020,~~ the Company issued 11,413 ~~and~~ ~~3,236,857~~shares of common stock ~~respectively,~~ associated with previously issued subscriptions on common stock with a fair value of approximately $5,000 ~~and $1,168,000, respectively.~~

~~As previously disclosed in Note 10 –~~ ~~Debt~~,. No such issuances were made during the ~~Company issued (i)~~ ~~3,365,972~~ ~~shares of common stock in 2021 upon the conversion of approximately $1,010,000~~ ~~of principal and interest on the $8.8M Note, (ii)~~ ~~1,900,000~~ ~~shares of common stock in June 2020 upon the conversion of $352,000~~ ~~of principal on the $11.5M Note, and (iii)~~ ~~2,525,596~~ ~~shares common stock in June 2020 upon the conversion of $460,050~~ ~~of principal and interest on the $900k Note.~~three months ended March 31, 2022.

As previously disclosed in Note 11 – ~~Debentures Payable~~Promissory Notes, during the ~~holder~~three months ended March 31, 2022 and 2021, the Company issued 1,142,858 shares common stock upon the conversion of $400,000 of principal in 2022 and 3,365,972 shares of common stock upon the ~~$21M Debentures converted (i)~~conversion of approximately $~~1.4~~ 1,010,000~~million~~ of principal and interest in 2021 ~~into~~on promissory notes.

As previously disclosed in Note 12 – Debentures Payable, during the three months ended March 31, 2021, the Company issued 4,610,645shares of common stock ~~and (ii) approximately~~upon the conversion of $~~10.1~~ 1.3million of principal and approximately $56,000 of accrued interest ~~in 2020 into~~ ~~77,766,559~~ ~~shares~~ of ~~common stock.~~the $21M Debentures.

As further disclosed in Note 15 – ~~Warrants~~Options, ~~warrants to purchase~~during the three months ended March 31, 2022, ~~50,000~~ 10,000shares of common stock were issued in connection with the exercise of stock options. NaN stock options were exercised during the three months ended March 31, 2021.

As further disclosed in Note 16 – Warrants, during the three months ended March 31, 2021, warrants to purchase 50,000 shares of common stock were exercised. NaN warrants were exercised during the three months ended March 31, 2022.

Common Stock Issuance Obligations

At March 31, ~~2021~~2022 and ~~2020,~~2021, the Company was obligated to issue ~~6,877~~ 2,717and ~~30,302~~ 6,877shares of common stock, ~~respectively,~~ valued at approximately $2,000 and $5,000~~in both periods,~~, respectively, in connection with a stock ~~grant~~grants to ~~a current~~an employee. The ~~2021 obligation was issued April 2021; the 2020~~2022 obligation was issued in May ~~2020.~~2022; the 2021 obligations was issued in April 2021.

NOTE 1415 – STOCK OPTIONS

During the three months ended March 31, 2021, the Company granted ~~five-year~~ five-year options to purchase up to 1,262,000shares of common stock at exercise prices ranging from $0.51~~and~~ to $0.90per share. The fair ~~values~~value of these options of approximately $541,000in the aggregate ~~are~~is being amortized to compensation expense over their vesting periods, of which approximately $170,000was amortized during the three months ended March 31, 2021. ~~Additionally, compensation~~No stock options were granted during the three months ended March 31, 2022.

Compensation expense in the first quarter of 2022 and 2021 for options issued in previous ~~years,~~periods, and continuing to be amortized over their respective vesting periods, approximated $2,469,000 and $124,000., respectively.

During the three months ended March 31, ~~2020,~~2022, options to purchase 010,000 shares of common stock were exercised at an exercise price of $0.30. No stock options were ~~granted. Compensation expense in~~exercised during the ~~first quarter of 2021 for options issued in previous years, and continuing to be amortized over their respective vesting periods, approximated $330,000~~.three months ended March 31, 2021.

During the three months ended March 31, 2021, ~~and 2020,~~ options to purchase 50,000 ~~and~~ ~~30,000~~shares of common stock ~~respectively, were forfeited or~~expired. NaN stock options expired ~~resulting in an aggregate reduction of amortized compensation expense of~~ ~~zero~~ ~~in 2021 and approximately $19,000~~ ~~in 2020.~~during the three months ended March 31, 2022.

Stock options outstanding and exercisable as of March 31, ~~2021~~2022 were:

SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE

Shares Under Option
Exercise Price
per Share Outstanding Exercisable Remaining Life
in Years
$0.140 160,000 40,000 4.28
$0.149 500,000 500,000 4.76
$0.169 200,000 200,000 4.62
$0.210 70,000 50,000 4.65
$0.225 2,000,000 875,000 4.61
$0.250 20,000 15,000 4.17
$0.250 50,000 - 4.57
$0.250 800,000 200,000 4.62
$0.250 80,000 40,000 4.65
$0.250 50,000 50,000 3.92
$0.300 554,500 277,250 4.00
$0.417 900,000 900,000 3.74
$0.450 125,000 125,000 0.51
$0.505 100,000 - 4.76
$0.505 800,000 - 4.78
$0.590 15,000 15,000 3.69
$0.630 300,000 300,000 0.75
$0.770 200,000 200,000 1.75
$0.830 287,000 71,750 4.98
$0.890 10,000 - 4.81
$0.892 40,000 - 4.81
$0.895 25,000 - 4.82
$0.900 50,000 50,000 2.11
$0.910 50,000 50,000 1.56
$0.950 50,000 50,000 1.75
$0.992 300,000 300,000 3.49
$1.000 125,000 125,000 3.59
$1.350 100,000 75,000 2.33
$1.950 375,000 375,000 2.25
$2.320 100,000 100,000 2.45
$2.450 2,000,000 2,000,000 1.73
$2.500 100,000 100,000 2.41
$2.650 200,000 200,000 2.48
$2.850 56,250 56,250 1.70
$2.850 100,000 100,000 2.70
$3.000 25,000 25,000 2.71
$3.725 100,000 100,000 2.69
11,017,750 7,565,250
Exercise Price Shares Under Option Remaining Life
per Share Outstanding Exercisable in Years
$0.140 80,000 80,000 3.28
$0.149 500,000 500,000 3.76
$0.169 200,000 200,000 3.62
$0.225 2,000,000 1,625,000 3.61
$0.250 50,000 50,000 2.92
$0.250 20,000 20,000 3.17
$0.250 50,000 25,000 3.57
$0.250 800,000 800,000 3.62
$0.250 80,000 80,000 3.65
$0.300 388,000 388,000 3.00
$0.417 900,000 900,000 2.74
$0.505 100,000 100,000 3.76
$0.505 800,000 400,000 3.78
$0.590 15,000 15,000 2.69
$0.690 15,000 - 4.68
$0.693 500,000 - 4.69
$0.700 650,000 50,000 4.67
$0.740 520,000 425,625 4.08
$0.755 1,050,000 550,000 4.73
$0.770 200,000 200,000 0.75
$0.800 25,000 - 4.64
$0.830 287,000 287,000 3.98
$0.830 600,000 150,000 4.16
$0.840 878,921 878,921 4.29
$0.840 99,000 59,400 4.34
$0.850 90,000 49,375 4.21
$0.850 72,500 14,375 4.63
$0.870 250,000 - 4.76
$0.880 11,550,000 5,925,000 4.28
$0.880 15,000 7,500 4.37
$0.880 410,000 102,500 4.59
$0.890 10,000 5,000 3.81
$0.892 40,000 30,000 3.81
$0.895 25,000 25,000 3.82
$0.898 11,250,000 5,625,000 4.50
$0.900 50,000 50,000 1.11
$0.910 50,000 50,000 0.56
$0.920 300,000 37,500 4.27
$0.928 500,000 200,000 4.36
$0.950 50,000 50,000 0.75
$0.970 100,000 100,000 4.21
$0.983 145,000 61,250 4.24
$0.990 500,000 125,000 4.47
$0.992 300,000 300,000 2.49
$1.000 15,000 15,000 2.21
$1.000 125,000 125,000 2.59
$1.350 100,000 100,000 1.33
$1.950 375,000 375,000 1.25
$2.320 100,000 100,000 1.45
$2.450 2,000,000 2,000,000 0.73
$2.500 100,000 100,000 1.41
$2.650 200,000 200,000 1.48
$2.850 56,250 56,250 0.70
$2.850 100,000 100,000 1.70
$3.000 25,000 25,000 1.71
$3.725 100,000 100,000 1.69
39,811,671 23,837,696

29 24

NOTE 1516 – WARRANTS

During the three months ended March 31, 2021, the Company issued ~~warrants to an individual to purchase up to~~ ~~100,000~~ ~~shares of common stock at an exercise price of $0.82~~ ~~per share, expiring~~ ~~threeyears from issuance. The fair value of this warrant on the issuance date approximated $56,000~~ ~~which was charged to compensation expense. Also during this period, the Company issued~~four-year warrants to Hadron to purchase up to 15,540,540shares of common stock at an exercise price of $1.087per share ~~expiring four years from issuance,~~ as part of the Hadron transaction previously discussed in Note 1213 – Mezzanine ~~Equity.~~Equity. Of the $23.0 million of proceeds from the Hadron transaction, $9.5 million was allocated to the warrant (such mount representing the fair value of the warrants on the issuance date) and recorded in Additional Paid-In Capital. Also during 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 of approximately $1,487,000 in the ~~issuance date approximated $9.5~~ ~~million, and this amount~~aggregate was ~~allocated~~charged to ~~the warrant from the $23.0~~ ~~million proceeds from the Hadron transaction and recorded in additional paid in capital.~~
~~During~~compensation expense. No warrants were granted during the three months ended March 31, ~~2020, in conjunction with the $21M Debentures discussed in Note 11~~ ~~– Debentures Payable~~~~, the Company issued 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 $1,148,000, of which approximately $24,000~~ ~~was amortized to interest expense in the quarter and the remainder to be amortized over the term of the respective debenture.~~2022.

During the three months ended March 31, 2021, warrants to purchase 50,000 shares of common stock were exercised at an exercise price of $0.15 per share. NaN warrants were exercised during the ~~same period in 2020.~~three months ended March 31, 2022.

During the three months ended March 31, 2021, warrants to purchase 225,000 shares of common stock with exercise prices of $0.90 and $~~1.75~~1.15 per share ~~were forfeited.~~expired. NaN warrants ~~were forfeited~~expired during the ~~same period in 2020.~~three months ended March 31, 2022.

At March 31, ~~2021~~2022 and ~~2020,~~2021, warrants to purchase up to ~~32,282,708~~26,351,571 and ~~11,960,107~~32,282,708 shares of common stock, respectively, were outstanding atwith exercise prices ranging from $0.25 to $5.50 per share across both periods.

NOTE 1617 – REVENUES

For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, the Company’s revenues were comprised of the following major ~~categories:~~categories (in thousands):
SCHEDULE OF REVENUES COMPRISED OF MAJOR CATEGORIES
2021 2020
Product sales $ 20,949,092 $ 4,232,828
Real estate 1,808,799 1,973,098
Management 895,703 429,632
Supply procurement 519,504 430,134
Licensing 469,466 400,327
Total revenues $ 24,642,564 $ 7,466,019

Three Months Ended
March 31,

2022 2021
Product sales - retail $ 21,441 $ 15,224
Product sales - wholesale 6,062 5,725
Real estate rentals 1,587 1,809
Supply procurement 1,190 520
Management fees 753 896
Licensing fees 249 469
Total revenues $ 31,282 $ 24,643

For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, revenues from two clients represented ~~14%~~12% and 3914%, respectively, of total revenues.

30
NOTE 1718 – BAD DEBTS

The Company maintains two types of reserves to address uncertain collections of amounts due—an allowance against trade accounts receivable (the “AR Allowance”), and a reserve against cash advanced by the Company to its cannabis-licensed clients for working capital purposes (the WC Reserve”).

During the three months ended March 31, 2022, the Company made no change to the AR Allowance, and increased the WC Reserve by approximately $14,000, to reserve the working capital balance of Harvest. During the three months ended March 31, 2021, the Company increased the AR Allowance by $850,000, and the WC Reserve by approximately $175,000. The aggregate of these two amounts of approximately $1,025,000was charged to Bad Debts on the statement of operations for ~~the three months ended March 31, 2021.~~ No ~~changes to the AR Allowance and WC Reserve were made during the three months ended March 31, 2020.~~this period.

31 25

NOTE 1819 – RELATED PARTY TRANSACTIONS

In ~~2020,~~ July 2021, the Company granted five-year options to purchase ~~an aggregate of~~up to ~~550,000~~100,000 shares of common stock ~~were exercised by~~to each of the Company’s ~~CEO, CFO, and an~~three independent board ~~member~~members at an exercise ~~prices~~price of $~~0.13~~ ~~and $0.14~~0.88 per share. No
In December 2021, the CEO and CFO each exercised options ~~were exercised~~to purchase 100,000 shares of common stock on a cashless basis. The exercise price of $0.63 per share was paid via the surrender by ~~these individuals during the first three months~~each individual of ~~2021.~~73,256 shares of common stock.

The Company’s corporate offices are leased from an entity in which the Company’s CFO has an investment interest. This lease expires in October 2028 and contains a five-year extension option. ~~In each of~~During the ~~three-month periods~~three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, expenses incurred under this lease approximated $~~39,000.~~39,000 in both periods.

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 induring the three months ended March 31, 2022 and 2021 approximated $872,000and ~~2020 approximated~~ $$825,000~~and~~ ~~$490,000,~~ , respectively.~~respectively.~~
The Company pays royalties on the revenue generated from its Betty’s ~~Eddies®~~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®~~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.~~respectively. The aggregate royalties due to this entity in the three months ended March 31, ~~2021~~2022 and ~~2020 approximated~~2021approximated $~~83,000~~ 56,000and $~~64,000~~83,000, respectively.

InDuring the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, one of the Company’s ~~majority owned~~majority-owned subsidiaries paid aggregate distributions of approximately $~~9,000~~11,000 and $~~12,000~~9,000, respectively, to the Company’s CEO and CFO, who own minority equity interests in such subsidiary.
In During the three months ended March 31, 2022, another of the Company’s majority owned subsidiaries paid distributions of approximately $3,000 to a current employee who owns a minority equity interest in such subsidiary.
During the three months ended March 31, 2022 and 2021, the Company purchased fixed assets and consulting services of approximately $392,000 and $265,000, respectively, in the aggregate from two entities owned by two of the Company’s general managers. ~~No payments were made to these two entities in the same period in 2020.~~

InDuring the three months ended March 31, 2022 and 2021, the Company purchased fixed assets of approximately $82,000 and $310,000 from an entity owned by an employee. ~~No payments were made to this related entity in the same period in 2020.~~
~~The balance of~~ ~~Due To Related Parties~~ ~~at December 31, 2020 of approximately $1.2~~ ~~million was comprised of amounts owed of approximately (i) $460,000~~ ~~to the Company’s CEO, (ii) $653,000~~ ~~to entities owned by the Company’s CEO and CFO, and (iii) $45,000~~ ~~to a stockholder of the Company. All amounts owed were repaid in March 2021.~~

The Company’s mortgages with Bank of New England, DuQuoin State Bank, and South Porte Bank are personally guaranteed by the Company’s CEO and CFO.

32 26

NOTE 1920 – COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company is the lessee under 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 details of the Company’s operating lease agreements are as follows:

● Delaware – 4,000square feet of retail space in a multi-use building under a five-year lease that expires in ~~December 2021 with a five-year option to extend. The~~April 2027 that the Company has developed ~~the space~~ into a cannabis dispensary which is subleased to its cannabis-licensed ~~client.~~client.

● Delaware – a 100,000square foot warehouse, ~~leased in March 2019 that~~of which the Company ~~is developing~~developed 60,000 square feet into a cultivation ~~and processing~~ facility ~~to be~~that is being subleased to ~~the same Delaware~~its cannabis-licensed client. The lease ~~term is~~ 10 ~~years,~~expires in March 2030, with an option to extend the term for three additional five-year ~~periods.~~periods.
● Delaware –a– 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~~sublease 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~~ lease with a related party expiring in 2028, with an option to extend the term for an additional five-year period.

● Maryland – a 2,700square foot ~~2-unit~~two-unit apartment under a lease that expires in July 2022..

The Company leases machinery and office equipment under finance leases that expire in February ~~2022~~2024 through ~~June 2024~~February 2026 with such terms being a major part of the economic useful life of the leased property.

The components of lease expense for the three months ended March 31, ~~2021~~2022 were as ~~follows:~~follows (in thousands):
SCHEDULE OF COMPONENTS OF LEASE EXPENSE
2021
Operating lease cost $ 266,580 $ 277

Finance lease cost:
Amortization of right-of-use assets $
8,171
$ 19
Interest on lease liabilities
1,504
7
Total finance lease cost $
9,675
$ 26

The weighted average remaining lease term for operating leases is ~~8.0~~ 7.1years, and for ~~the~~ finance ~~lease~~leases is ~~2.6~~ 3.8years. The weighted average discount rate used to determine the right-of-use assets and lease liabilities ~~was~~is between ~~7.5%~~ 7.5% to 1212.0% for all leases.

Future minimum lease payments as of March 31, ~~2021~~2022 under all non-cancelable leases having an initial or remaining term of more than one year ~~were:~~were (in thousands):
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS UNDER ALL ~~NON-CANCELABLE~~NON CANCELABLE OPERATING LEASES
Operating
Leases Finance
Leases Operating Leases
Finance
Leases

2021
$ 845,987 $ 28,809
2022 1,071,079 27,123 $ 849 $ 135
2023 1,035,017 23,201 1,119 173
2024 963,589 3,229 1,050 153
2025 936,947 - 1,025 150
2026 970 21
Thereafter 3,468,041 - 2,611 -
Total lease payments 8,320,660 $ 82,362 7,624 $ 632
Less: imputed interest (2,177,632 ) (7,560 ) (2,153 ) (82 )
$ 6,143,028 $ 74,802 $ 5,471 $ 550
27

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In November 2021, the Company entered into lease agreements for six retail properties, each with square footage between 4,000 and 6,000 square feet, in the state of Ohio (each an “Ohio Lease” and collectively the “Ohio Leases”). Each Ohio Lease has an initial lease period of eleven months, with a minimum rent of $31.00 per square foot which increases 3.0% annually. In the event the Company is awarded one or more of the six Ohio cannabis licenses for which it had previously applied, the Company can extend the term of one or more of the Ohio Leases to ten years (with two additional five-year options to extend) upon the payment of $50,000 for each extended Ohio Lease, and develop the premises of such extended lease(s) into a cannabis dispensary.
In February 2022, the Company was notified that it was awarded a cannabis dispensary license from the state of Ohio. The Company is awaiting the final verification process to be completed by the state. As of March 31, 2022, the lease terms of the Ohio Leases were all less than one year, and accordingly the Company was not required to record a right-of-use asset and corresponding lease liability on its balance sheet.
In April 2022, the Company extended the term of one of the Ohio Leases, and the remaining five Ohio Leases were terminated.

Terminated Employment Agreement

An employment agreement which commenced in 2012 with Thomas Kidrin, the former CEO of the Company, ~~which provided Mr. Kidrin with salary, car allowances, stock options, life insurance, and other employee benefits,~~ was terminated by the Company in ~~2017.~~ 2017~~At March 31, 2021 and December 31, 2020,~~. Since the termination date, the Company had maintained an accrual of approximately $1,043,000 for any amounts that may be owed under this ~~agreement, although the Company contends that such agreement is not valid and 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, which ~~alleges~~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 Company believes that the allegations in the complaint are without merit and intends to vigorously defend this matter and prosecute its counterclaims.~~

~~While~~In August 2021, the parties entered into a settlement agreement and general release pursuant to which (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 ~~motion~~common stock at an exercise price of $0.50 per share, (iii) the Company irrevocably transferred intangible assets relating to ~~dismiss~~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 August 2021, the fair value of the warrants of approximately $776,000 was ~~pending, the parties reached a settlement in principle~~charged to compensation expense, and the ~~court has issued a nisi order~~Company reversed its accrual of dismissal. The parties have not yet competed the settlement agreement. If the parties are for any reason unable to do so, then the Company will continue vigorously to defend this matter and prosecute its counterclaims.approximately $1,043,000
Maryland ~~Acquisition~~Litigation

AsFollowing the consummation of the Kind acquisition previously ~~disclosed~~discussed in Note 3 – Acquisitions, ~~Kind has sought to renege on~~in April 2022, the ~~parties’ original agreement to a partnership/joint venture made in~~Maryland litigation between the ~~fall of 2016~~Company and ~~subsequent MOU. The Company engaged with~~ the members of Kind was dismissed in good faith in an attempt to reach updated terms acceptable to both parties, however the members of Kind failed to reciprocate in good faith, resulting in an impasse. Incrementally, both parties through counsel further sought to resolve the impasse, however such initiative resulted in both parties commencing legal proceedings.
In November 2019, 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) (the “Complaint”). The Complaint, as amended, alleges breach of contract, breach of fiduciary duty, unjust enrichment, intentional misrepresentation, rescission, civil conspiracy, and seeking an accounting and declaratory judgment and damages in excess of $~~75,000~~. On November 15, 2019, the Company filed counterclaims against Kind and a third-party complaint against the members of Kind (Jennifer DiPietro, Susan Zimmerman, and Sophia Leonard-Burns) and William Tham (the “Counterclaims”). The Counterclaims, as amended, allege breach of contractits entirety with ~~respect to each of the partnership/joint venture agreement, the MOU, the MSA, the Lease,~~prejudice, and the ~~Licensing~~parties have released one another of any and Manufacturing Agreement (“LMA”), unjust enrichment, promissory estoppel/detrimental reliance, fraud in the inducement, breach of fiduciary duty, and seeks reformation of the MSA, a declaratory judgment regarding enforceability of the partnership/joint venture arrangement and/or the MOU, specific performance of the parties’ various contracts, and the establishment of a constructive trust for the Company’s benefit. The Counterclaims also seek damages.
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 Lease “appear to be independent, valid and enforceable contracts.”
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 is seeking judgment at trial in the amount of approximately $~~5.4~~ ~~million for past due rent and 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 hearing) and granting the Company’s request for preliminary injunction. The Court determined that the Company 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 members, and 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 effect.
~~In addition to the favorable rulings on the Lease, MSA, and LMA, the Company believes that its~~all claims with respect to the 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. The Company has opposed both motions and has filed a petition for civil contempt against the Kind parties for interfering with the Company’s management of Kind. The motions and petition are pending, and the preliminary injunction remains in effect.
~~The Company intends to aggressively prosecute and defend the action. Trial has been scheduled from March 28, 2022 to April 11, 2022.~~between them.

DiPietro Lawsuit

In April 2022, the parties agreed to dismiss all direct claims and counterclaims asserted in this litigation, as set forth below. In addition to their direct claims, the parties also asserted derivative claims, which may be dismissed only with the court’s approval. On April 12, 2022, the court approved the form of notice to be delivered to unit holders of Mia Development LLC (“Mia”) and Mari Holdings MD LLC (“Mari-MD”), majority-owned subsidiaries of the Company, and scheduled a hearing to approve dismissal of all derivative claims for June 8, 2022.
In ~~August 2020,~~this action, Jennifer DiPietro, one of the former members of Kind, directly and derivatively on behalf of ~~Mari Holdings MD LLC (“Mari-MD”)~~Mari-MD and Mia, ~~Development LLC (“Mia”),~~ commenced a suit in August 2020 against the Company’s CEO, CFO, and wholly-owned subsidiary MariMed Advisors Inc. (“MMA”), in Suffolk Superior Court, Massachusetts.
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~~In this action,~~ DiPietro ~~a party to prior ongoing litigation in Maryland involving the Company and Kind as discussed above, brings~~brought 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~~sought access to books and records and an accounting related to her investments in Mari-MD and Mia. DiPietro ~~seeks~~sought unspecified money damages and rescission of her interest in Mari-MD, but not of her investment in Mia, which ~~has~~had provided substantial returns to her as a member.

The Company ~~has~~ answered the complaint and MMA ~~has moved for leave to file~~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, and for breach of Mari-MD’s operating agreement.~~Kind.

~~The Company believes that~~In December 2021, the ~~allegations~~parties entered into a global confidential settlement and release agreement, along with the parties to the aforementioned Maryland litigation. As of the ~~complaint are without merit~~same date, MMA and ~~intends~~Jennifer DiPietro entered into a membership interest purchase agreement pursuant to ~~defend~~which the ~~case vigorously. The Company’s counterclaim seeks monetary damages from DiPietro, including~~Company will purchase DiPietro’s interests in Mia and Mari-MD, as previously discussed in Note 3 – Acquisitions. Upon the ~~Company’s legal fees in~~court’s approval on the ~~Kind action.~~parties’ joint motion for approval on June 8, 2022, the purchase DiPietro’s interests shall be consummated, the parties shall release all direct and derivative claims against one another, and the parties shall file stipulations dismissing all claims and counterclaims with prejudice within three days of that ruling.
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Bankruptcy Claim
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 a related party receivable of approximately $29.0 million from the 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 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 MGG. After the consummation of the sale of all or substantially all of their assets and business, the GenCanna Debtors n/k/a OGGUSA, Inc. and 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 unsecured creditors committee filed objections to such Liquidating Plan, including opposition to the 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.
In January 2022, the Company, at the request of the Liquidating Plan administrator for the OGGUSA Debtors, executed a written release of claims, if any, of the Company against Huron Consulting Group (“Huron”), a financial consulting and management company retained by the senior lender of the OGGUSA Debtors to perform loan management services for the lender and OGGUSA Debtors prior to and during their Chapter 11 bankruptcy cases. Such release was executed in connection with a comprehensive settlement agreement between the OGGUSA Debtors and Huron. In consideration for the Company’s execution of the release, Huron paid an additional $40,000 to the bankruptcy estates of the OGGUSA Debtors to be included in the funds to be distributed to creditors, including the Company.
As of the date of this filing, there is still insufficient information as to 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.
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NOTE 2021 – SUBSEQUENT EVENTS

~~Amended Note Agreement~~Consummation of Kind Acquisition and Dismissal of Litigation
In April ~~2021,~~2022, the Maryland Medical Cannabis Commission approved the Company’s acquisition of Kind as previously discussed in Note 3 – Acquisitions, and the acquisition was consummated by the parties. Accordingly, Kind will be consolidated into the financial results of the Company ~~entered into a third amendment agreement with~~commencing on the ~~Noteholder referred to in Note 10 –~~ ~~Debt~~ ~~whereby~~closing date of the acquisition. The cash portion of the purchase price, $13.5 million, was funded out of available working capital. Additionally, following the consummation of the acquisition, the Maryland litigation between the Company and ~~MMH issued~~the former members of Kind was dismissed in its entirety with prejudice, and the parties released one another of any and all claims between them.
In April 2022, the Company and DiPietro agreed to dismiss all direct claims and counterclaims asserted in a ~~third amended~~separate litigation between them, as previously discussed in Note 20 – Commitments and ~~restated promissory note~~Contingencies. In addition to their direct claims, the parties also asserted derivative claims, which may be dismissed only with the court’s approval. On April 12, 2022, the court approved the form of notice to be delivered to unit holders of Mia and Mari-MD, and scheduled a hearing to approve dismissal of all derivative claims for June 8, 2022. After such approval, the Company shall purchase DiPietro’s interests in Mia and Mari-MD, the ~~principal amount~~parties shall release all direct and derivative claims against one another, and the parties shall file stipulations dismissing all claims and counterclaims with prejudice within three days of ~~approximately $~~that ruling.
~~3.2~~Consummation of Green Growth Group Acquisition ~~million (the “$3.2M Note”), comprised~~
In April 2022, the acquisition of Green Growth Group previously discussed in Note 3 – Acquisitions was consummated by the parties.
Lease Agreements
In April 2022, the Company extended the term of one of the Ohio Leases previously discussed in Note 20 – Commitments and Contingencies, and the remaining ~~principal balance on the $8.8M Note.~~five Ohio Leases were terminated.
~~The $3.2M Note 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, subject to adjustment from certain transactions by the Company.~~
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.~~
Equity Transactions

In April ~~2021, the Company issued~~ ~~6,877~~ ~~shares of common stock previously subscribed in connection with the stock grant to an employee previously disclosed in Note 14 –~~ ~~Stockholders’ Equity~~~~. Also during this period, (i) the Company granted~~ ~~five-year options~~2022, warrants to purchase ~~up to~~ ~~590,000~~750,000 ~~shares of common stock to employees at an exercise price of $0.74~~ ~~per share, (ii) options to purchase~~ ~~25,000~~ ~~shares of common stock were exercised at an exercise price of $0.30~~ ~~per share, (iii) options to purchase~~ ~~125,000~~ shares of common stock were exercised on a cashless ~~basis, with the~~basis. The exercise price of $~~0.45~~ 0.50per share was paid byvia the surrender of ~~72,115~~ 515,039shares of common stock, ~~(iv) warrants to purchase~~resulting in the issuance of ~~200,000~~ 234,961shares of common ~~stock were exercised on a cashless basis, with the exercise price of $0.45~~ ~~per share paid by the surrender of~~ ~~88,235~~ ~~shares of common stock, and (v) the Company issued~~ ~~28,834~~ ~~shares of common stock to satisfy a $21,000~~ ~~obligation~~.stock.

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

Forward Looking Statements

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.

Overview

General

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.

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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, 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.

~~In 2018,~~Over the last few years, the Company made the strategic decision to transition from a consulting business to a direct owner and operator of cannabis licenses in high-growth states. Core to this transition is the acquisition and ~~operator~~consolidation of ~~seed-to-sale operations (hereinafter referred to as~~ the Company’s clients (the “Consolidation Plan”). ~~The Consolidation Plan calls for the acquisition of its cannabis-licensed clients located in Delaware, Illinois, Maryland, Massachusetts, and Nevada. In addition,~~Among several benefits, the Consolidation Plan ~~includes the potential acquisition of a Rhode Island asset. All of these acquisitions are subject to state approval, and once consolidated, the entities will operate under the MariMed banner.~~
To date, acquisitions of the licensed businesses in Massachusetts and Illinois have been completed and establish the Company as a fully integrated seed-to-sale multi-state operator. 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 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.
~~A goal in completing this transition from a consulting business to a direct owner of cannabis licenses and operator of seed-to-sale operations is to~~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~~businesses and manage the continuing growth of their operations.

To date, the Company’s acquisition and consolidation of its cannabis-licensed clients’ retail businesses in Illinois and retail and wholesale businesses in Massachusetts have been completed. In April 2022, the acquisition of its client’s wholesale business in Maryland, and a third-party wholesale business in Illinois were consummated. The acquisitions of clients’ retail and wholesale businesses in Nevada and Delaware are at various stages of completion and subject to each state’s laws governing the ownership transfer of cannabis licenses and other closing conditions. Delaware will require a modification of current cannabis ownership laws to permit for-profit ownership, which is expected to occur when the state legalizes recreational adult-use cannabis. Until the law changes and the acquisition is approved, the Company continues to generate revenue from rental income, management fees, and licensing royalties.
In addition to the aforementioned acquisitions of its cannabis-licensed clients, in February 2022, the Company was notified that it was awarded a cannabis dispensary license from the state of Ohio, for which it had previously applied. The Company is awaiting the final verification process to be completed by the state before commencing cannabis operations in this state.
The Company’s transition to a fully integrated muti-state cannabis operator (“MSO”) is part of a strategic growth plan (the “Strategic Growth Plan”) it 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 expanding into additional states with legal cannabis programs.
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 quality 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 proprietary~~Company markets its high-quality cannabis ~~genetics produce~~ flowers and concentrates under the ~~brand name~~award-winning¹ Nature’s ~~Heritage™, and cannabis-infused products~~Heritage brand; chewable tablets under the brand names Kalm ~~Fusion®, in the form of chewable tablets~~Fusion and ~~drink powder mixes, and~~K Fusion; all natural fruit chews under the award-winning¹Betty’s ~~Eddies® brand of all natural fruit chews. Both cannabis-infused~~Eddies brand; brownies, cookies, and other social sweets under the Bubby’s Baked brand; and powder drink mixes under the Vibations: High + Energy brand. The Company’s brands ~~are top selling~~have been top-selling products in Maryland and ~~Massachusetts~~Massachusetts.²~~and the~~The Company intends to introduce additional ~~products~~product lines under these brands in ~~2021. The Company’s brand of hemp-infused cannabidiol (“CBD”) products, Florance™, is distributed in~~ the ~~United States and abroad.~~foreseeable future.

The Company also has ~~exclusive sublicensing~~strategic alliances with prominent brands. The Company has partnered with renowned 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™~~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 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.~~Olam.

The Company was incorporated in Delaware in January 2011 under the name Worlds Online Inc. The Company’s stock is quoted on the OTCQX market under the ticker symbol MRMD. In ~~March 2020,~~April 2022, the ~~World Health Organization declared~~Company applied to list its shares of common stock on 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 implementation of its aforementioned Consolidation Plan has been delayed. Additionally, while the cannabis industry has been deemed an essential business, andCanadian Securities Exchange, which application is ~~not expected to suffer severe declines in revenue, the Company’s business, operations, financial condition, and liquidity have been impacted, as further discussed in this report.~~currently pending.

¹Awards won by the Company’s Betty’s ~~Eddies®~~Eddies brand include LeafLink 2021 Best Selling Medical Product, Reddit Sparkie 2021 Best Edible, Respect My Region 2021 Hottest Edible, LeafLink 2020 Industry Innovator, and Explore Maryland Cannabis 2020 Edible of the ~~Year,~~Year. Awards won by the Company’s Nature’s Heritage brand include the Cultivators Cup 2021 Silver Medal and ~~LeafLink 2019 Best Selling Medical Product.~~the High Times Cannabis Cup 2021 Bronze Medal.

²Source: LeafLink Insights 2020.

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Revenues

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

● Product Sales – direct sales of cannabis and cannabis-infused products primarily by the Company’s ~~dispensary~~retail dispensaries and wholesale operations in Massachusetts and Illinois, and sales of hemp and hemp-infused products. An increase in product sales is expected 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).Illinois.

● 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.

● 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.

● Supply Procurement – ~~the Company maintains volume discounts with top national vendors~~resale of cultivation and production resources, supplies, and equipment, ~~which~~acquired by the Company ~~acquires and resells~~from top national vendors at volume discounted prices, to its clients ~~or third parties~~and third-parties within the cannabis industry.

● Licensing – ~~royalties~~revenue from the ~~licensed distribution~~sale of the Company’s branded products, including Betty’s Eddies and Kalm ~~Fusion® and Betty’s Eddies®,~~Fusion, and from the sublicensing of contracted brands including Healer and Tikun Olam, to regulated dispensaries throughout the United States and Puerto Rico.

Expenses

The Company classifies its expenses into three general categories:

● Cost of Revenues – the direct costs associated with the generation of the Company’s revenues.

● Operating Expenses – comprised of the sub-categories of personnel, marketing and promotion, general and administrative, and bad debts.

● Non-operating Income and Expenses – comprised of the sub-categories of interest expense, interest income, ~~losses~~loss on ~~debt settlements, and~~obligations settled with equity, gain (loss) on changes in ~~the~~ fair value of ~~non-consolidated investments.~~investment, and other investment income.

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Liquidity and Capital Resources

The Company produced ~~significant~~the following improvements to its liquidity in the reported periods:

● Cash and cash equivalents increased ~~four-fold~~13% to ~~approximately $12.3~~$33.5 million at March 31, ~~2021,~~2022, from ~~approximately $3.0~~$29.7 million at December 31, ~~2020.~~
● Working capital increased to approximately $17.1 million at March 31, 2021 from a working capital deficit of approximately $2.2 million at December 31, 2020, a positive swing of approximately $19.3 million.2021.

● InWorking capital increased 16% to $20.1 million at March 31, 2022 from $17.4 million at December 31, 2021.
● Cash flow provided by operating activities increased 26% to $8.5 million in the three months ended March 31, ~~2021, the Company’s operating activities provided positive cash flow of approximately~~2022 from $6.8 million ~~compared to approximately $407,000 of negative cash flow used in such activities~~ in the same period in ~~2020, an increase of approximately $7.2 million.~~2021.
● Net income before income taxes increased 43% to $7.9 million in the three months ended March 31, 2022 from $5.5 million in the same period in 2021.

The aforementioned improvements to the Company’s liquidity were primarily the result of ~~(i)~~ increases in revenues and profitability generated by the Company’s cannabis operations in the states of Illinois and ~~Massachusetts, acquired~~Massachusetts. These operations launched as part of the Company’s aforementioned Consolidation Plan to transition from a consulting business to a direct owner of cannabis licenses and operator of see-to-sale operations, and (ii) $23.0 million of gross proceeds raised by the 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 warrants.seed-to-sale operations.
Additionally, the section below entitled Non-GAAP Measurement discusses an additional financial measure not defined by GAAP which the Company’s management uses to evaluate liquidity.
Operating Activities

Net cash provided by operating activities in the three months ended March 31, ~~2021 approximated $6.8~~2022 was $8.5 million, compared to ~~net cash used in operating activities of approximately $407,000~~$6.8 million in the same period in ~~2020.~~2021. The year-over-year improvement was primarily attributable to the increase in cannabis-derived profits generated by the ~~acquired operations~~Company’s four active retail dispensaries in Illinois, and its retail and wholesale operations in Massachusetts.

Investing Activities

Net cash used in investing activities in the three months ended March 31, ~~2021 approximated $2.9~~2022 was $4.4 million, compared to ~~approximately $1.4~~$2.9 million in the same period in ~~2020.~~2021. The increase was ~~due~~attributable to ~~additional purchases of fixed assets~~an increase in property and ~~amounts paid to renew cannabis licenses.~~equipment expenditures in 2022 for the Company’s facilities in Delaware, Illinois, Maryland, and Massachusetts.

Financing Activities

Net cash ~~provided by~~used in financing activities in the three months ended March 31, ~~2021 approximated~~2022 was $329,000, compared with net cash provided by financing activities of $5.4 ~~million, compared to approximately $2.9~~ million in the same period in ~~2020.~~2021. In early 2021, the Company entered into a securities purchase agreement with Hadron Healthcare Master Fund (“Hadron”) whereby Hadron agreed to provide funding of up to $46.0 million to repay debt, to fund expansion plans of existing operations, and to finance planned acquisitions. The ~~increase is primarily due~~fluctuation in cash from financing activities was attributable to the receipt of $23.0 million ~~of proceeds from the aforementioned Hadron transaction,~~under this facility, offset by issuance costs and debt repayments in March 2021. No financing was raised by the paydown of debt and obligations of approximately $17.1 million. The remaining proceeds from the Hadron transaction will fund construction and upgrades of certain of the Company’s owned and managed facilities. Company in 2022.
The balance of ~~the~~Hadron’s committed ~~facility~~funding of ~~up to an additional~~ $23.0 million ~~is intended~~was designated to fund future acquisitions, including the ~~Company’s specific targeted acquisitions provided such acquisitions are contracted~~Kind acquisition, on the same aforementioned terms as the initial proceeds. Notwithstanding, Hadron did not fund the cash portion of the Kind purchase price and the Company is currently in ~~2021~~negotiations with Hadron to amend and ~~consummated, including obtaining~~extend the ~~necessary regulatory approvals,~~facility to be utilized for future expansion opportunities. There is no ~~later than the end of 2022.~~assurance that any extension will be implemented.

40 32
Results of Operations

Three months ended March 31, ~~2021~~2022 compared to three months ended March 31, ~~2020~~2021

Revenues grew to $31.3 million in the ~~three months ended March 31, 2021 approximated $24.6~~first quarter of 2022, an increase of $6.6 million or 27%, compared to ~~approximately $7.5~~$24.6 million in the same period in ~~2020, an increase of approximately $17.2 million or 230.1%.~~2021. The ~~year-over-year~~ increase was primarily ~~due~~attributable to the ~~four-fold~~ growth of the Company’s (i) retail dispensary cannabis sales ~~to approximately $20.9 million~~ in ~~the current period, compared to approximately $4.2 million from the same period a year ago. This growth was attributable to approximately (i) $5.4 million~~Illinois, where one new dispensary commenced operations in May 2021, and (ii) supply procurement revenue generated in the current period by the Company’s cultivation and production facility in New Bedford, MA; this location had completed in first harvest at the end of the prior period and commenced full scale selling operations after the end of such quarter, (ii) $3.8 million generated in the current periodprimarily from the Company’s dispensary in Mt. Vernon, IL in the current period, which was not yet operational in the previous period, (iii) a $3.9 million increase in revenue generated in the current period from the Company’s dispensaries in Anna, IL and Harrisburg, IL due to 55% and 70% increases, respectively, in recreational customer visits year-over-year, and (iv) a $3.5 million increase in revenue generated from the Company’s Middleboro, MA dispensary which commenced recreational sales in the third quarter of 2020 and also saw a six-fold increase in medical customers. 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’scannabis clients in Delaware and Maryland.

Cost of revenues were $14.3 million in the ~~three months ended March 31, 2021 approximated $11.5 million~~first quarter of 2022 compared to ~~approximately $2.6~~$11.5 million in the same period in ~~2020,~~2021, an increase of ~~approximately $8.9 million.~~$2.8 million or 25%. The ~~year-over-year~~ variance was primarily ~~attributable~~due 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~~decreased slightly to ~~46.5%~~45.7% in ~~the three months ended March 31, 2021~~2022 from ~~34.8%~~46.5% in the same period in ~~2020, primarily~~2021 due to the change in the relative mix of revenue categories in each period. Specifically, in the three months ended March 31, 2021, (a) 85.0% of revenues were comprised of product sales, which historically have had corresponding costs of revenue of approximately 50.0%, and (b) 7.3% of revenues were comprised of real estate revenue, which have no corresponding cost of revenue. This compares to revenues in the same period in 2020 that were comprised of (x) 56.7% of product sales and (y) 26.4% of real estate revenues. While the cost rate is higher for product sales, the level of product sales able to be generated by the Company is several multiples higher than the level of real estate revenue able to be generated, resulting in significantly higher margin dollars and profitability to be generated by the Company.increased operating efficiencies.

As a result of the foregoing, gross profit ~~approximated~~grew to $17.0 million in the first quarter of 2022 from $13.2 million ~~or 53.5% of revenues in the three months ended March 31, 2021, from approximately $4.9 million, or 62.5% of revenues~~ in the same period in ~~2020.~~2021.

Personnel expenses increased to ~~approximately $1.7~~$3.0 million in the ~~three months ended March 31, 2021~~first quarter of 2022 from ~~approximately $1.5~~$1.7 million in the same period in ~~2020.~~2021. The increase was primarily due to the hiring of additional staff to support ~~(i)~~ higher levels of projected revenue ~~and (ii)~~from existing operations as well as from the ~~Company’s expansion into a direct owner and operator of seed-to-sale cannabis businesses.~~Kind acquisition. As a percentage of revenues, personnel expenses ~~dropped significantly~~increased to ~~7.0%~~9.7% in the ~~three months ended March 31, 2021~~first quarter of 2022 from ~~20.3%~~to 7.0% in the same period in ~~2020.~~2021.

Marketing and promotion costs increased to ~~approximately $224,000~~$643,000 in the ~~three months ended March 31, 2021~~first quarter of 2022 from ~~approximately $112,000~~$225,000 in the same period in ~~2020, primarily from increased spending on public relations~~2021. The increase is attributable to the Company’s focused efforts to upgrade its marketing initiatives and ~~related expenses.~~personnel in order to expand branding and distribution of its licensed products. As a percentage of revenues, these costs ~~fell~~increased to ~~0.9%~~2.1% in the ~~three months ended March 31, 2021~~first quarter of 2022 from ~~1.5%~~0.9% in the same period in ~~2020.~~2021.

General and administrative costs increased to ~~approximately $3.2~~$6.2 million in the ~~three months ended March 31, 2021~~first quarter of 2022 from ~~approximately $2.2~~$3.2 million in the same period in ~~2020.~~2021. This ~~increase~~change is primarily due to ~~increased~~increases of (i) $2.1 million in non-cash equity compensation expense from option grants in fiscal 2021 that continued vest in the first quarter of 2022, and (ii) $275,000 in net professional fees primarily due to the hiring of consultants, offset by a reduction in legal costs. The increase is also due to smaller increases in insurance, facility costs, ~~associated~~insurance, and depreciation that are in line with the ~~Company’s legal proceedings, coupled with higher facility costs on additional properties in service in 2021. As a percentage~~growth of ~~revenues, these costs fell significantly to 12.9% in~~ the ~~three months ended March 31, 2021 from 29.9% in the same period in 2020.~~Company.

Bad debt expense ~~approximated $1.0 million~~decreased to $14,000 in the ~~three months ended March 31, 2021 compared to zero bad debt expense~~first quarter of 2022 from $1,025,000 in the same period in ~~2020. The current period amount reflects a~~2021, due to higher reserve ~~of approximately $1.0 million recorded against aging~~balances required on aged trade receivable ~~balances.~~balances in 2021.

As a result of the foregoing, the Company generated operating income of ~~approximately~~ $7.0 million in both the ~~three months ended March 31, 2021~~first quarter of 2022 and the same period in 2021.
Net non-operating income was $852,000 in the first quarter of 2022 compared to ~~approximately $1.0 million~~net non-operating expenses of $1,524,000 in the same period in ~~2020.~~
~~Net non-operating expenses decreased to approximately $1.5 million in the three months ended March 31, 2021 from approximately $3.3 million in the same period in 2020.~~2021. The ~~decrease~~change is ~~primarily~~ due to ~~an approximate $1.2 million~~a $1,199,000 reduction of interest expense from lower levels of outstanding debt, non-cash income of $954,000 in 2022 from a nonconsolidated investment, and ~~an approximate $640,000 smaller decline~~a $93,000 year-over-year increase in the fair value of ~~investments.~~a second nonconsolidated investment.

As a result of the foregoing, the Company generated income before income taxes of ~~approximately $5.5~~$7.9 million in the ~~three months ended March 31, 2021,~~first quarter of 2022, compared to ~~a loss before income taxes of approximately $2.3~~$5.5 million in the same period in ~~2020.~~2021. After a tax provision of ~~approximately~~$3.7 million in 2022 and $1.2 million in 2021, net income was $4.2 million in the ~~three months ended March 31, 2021 and approximately $13,000~~first quarter of 2022, compared to $4.3 million in the same period in ~~2020, net income approximated $4.3 million in the current period, compared to a net loss of approximately $2.3 million in the prior period, a positive swing of approximately $6.6 million.~~
2021.
41

Non-GAAP Measurement
In addition to the financial information reflected in this report, which is prepared in accordance with ~~GAAP,~~generally accepted accounting principles in the United States (“GAAP”), the Company is providing ~~an additional financial measure not defined by GAAP –~~ ~~EBITDA~~ ~~(defined below). The Company is providing this~~a non-GAAP financial measurement of profitability – Adjusted EBITDA – as a supplement to the preceding discussion of the Company’s financial results.

33
Management defines Adjusted EBITDA as net income, ~~(loss) before interest, income taxes, depreciation, and amortization.~~ determined in accordance with GAAP, excluding the following:
- 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.
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 ~~others,~~analysts, investors, and ~~accordingly,~~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 months ended March 31, 2022 and 2021 ~~and 2020:~~(in thousands):

Three Months Ended
March 31,
Three Months Ended
March 31,
2021 2020 2022 2021
(Unaudited) (unaudited)
Net income (loss) $ 4,310,026 $ (2,337,716 )
Net income $ 4,241 $ 4,310

Interest expense, net 1,477,994 2,645,114 150 1,478
Income taxes 1,203,797 12,926 3,660 1,204
Depreciation and amortization 639,725 563,170 842 639
EBITDA 7,631,542 883,494
Earnings before interest, taxes, depreciation, and amortization 8,893 7,631

Amortization of stock grants 2 5
Amortization of option grants 2,469 295
Amortization of stand-alone warrant issuances - 56
Loss on equity issued to settle obligations - 1
Gain (loss) on change in fair value of investment
(48
)
45

Other investment income
(954 ) -
Adjusted EBITDA $ 10,362 $ 8,033

42 34

~~2021~~2022 Plans

For the balance of ~~2021,~~2022 and into 2023, the Company’s focus will be to ~~be on~~continue to execute its Strategic Growth Plan. The Company’s priority activities will include the ~~following key areas:~~following:

1) ~~Subject~~Continue to consolidate the ~~applicable state approvals, continue~~cannabis businesses that the ~~execution of its Consolidation Plan.~~Company has developed and manages.
2) Expand revenue, assets, and its footprint in the states in which the Company is operating.

2) - ~~Identify and~~In Massachusetts, the Company intends to open two ~~new dispensary locations in Massachusetts that can service both~~additional dispensaries and significantly expand the ~~medical~~capacity and ~~adult-use marketplaces.~~capability of its manufacturing facility.
- In Delaware, the Company intends to develop an additional 40,000 square feet of cultivation and production at its 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, the Company intends to go vertical by acquiring one or more craft licenses and to potentially add up to six more dispensaries up to the statutory limit of ten.

3) ~~Increase sales~~Expand into other legal states through M&A and ~~profits~~filing new applications in ~~Delaware by expanding cultivation and processing facilities.~~states where new licensing opportunities arise.

4) ~~Complete the acquisition of Maryland, subject~~Expand revenues by producing and distributing its award-winning brands to ~~resolution of the outstanding litigation, and proceed with a plan to expand the cultivation and processing facilities as well as adding a dispensary location.~~
5) Drive licensing fees through the expansion of the Company’s Nature’s Heritage™ branded flower and popular infused-product brands Betty’s Eddies® and Kalm Fusion® into the Company’s owned and managed facilities, and withqualified strategic partners ~~into additional markets. Expand the exclusively licensed Tropizen®~~or acquiring production and ~~Binske® brands.~~
6) ~~Identify acquisition opportunities in other states.~~distribution licenses.

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

Subsequent Events

Please refer to Note 2021 – 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 2021 – 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. AIn accordance with Rule 144(d)(3)(ii) of the Securities Act, no legend restricting the sale, transfer, or other disposition of these ~~securities other than in compliance with the Securities Act~~shares was ~~placed on the securities issued in the foregoing transactions.~~required.

Off-Balance Sheet Arrangements

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.

Inflation

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

Seasonality

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

43 35
Item 3. Quantitative and Qualitative Disclosure About Market Risk

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.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

~~Our~~The Company’s management, with the participation of ~~our~~its CEO and CFO, evaluated the effectiveness of ~~our~~the Company’s disclosure controls and procedures ~~(as defined~~(defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, ~~2021~~2022 (the “Evaluation Date”). Based upon that evaluation, the ~~chief executive officer~~CEO and ~~the chief financial officer~~CFO concluded that, as of the Evaluation Date, ~~our~~the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by usthe Company in the reports that ~~we file~~it files or ~~submit~~submits 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~~the Company’s management, including ~~our~~its CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

~~During~~Over the past ~~fiscal~~several years, wethe Company implemented significant measures to remediate ~~the previously disclosed~~past instances of ineffectiveness of ~~our~~the Company’s 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~~to the Company’s accounting processes and enhancement to ~~our~~the Company’s financial ~~controls, including~~control. Further, the ~~testing~~Company expanded its board of ~~such controls.~~directors to include a majority of independent disinterested directors; established an audit, compensation, and corporate governance committee of the board of directors; and adopted a formal policy with respect to related party transactions.

Other than as described above, there was no change ~~in our~~to the Company’s 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 ~~three months~~fiscal quarter ended March 31, ~~2021~~2022 that has materially affected, or is reasonably likely to materially affect, ~~our~~the Company’s internal control over financial reporting.

44 36
PART II – OTHER INFORMATION

Item 1. Legal Proceedings.
~~Terminated Employment Agreement~~
In July 2019, Thomas Kidrin, the former chief executive officer and 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 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.

~~The Company has moved to dismiss certain counts of~~In April 2022, 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.
~~While the Company’s motion to dismiss was pending, the parties reached a settlement in principle and the court has issued a~~ ~~nisi~~ ~~order of dismissal. The parties have not yet competed the settlement agreement. If the parties are for any reason unable to do so, then~~Maryland litigation between the Company ~~will continue vigorously to defend this matter~~ and ~~prosecute its counterclaims.~~
~~Maryland Acquisition~~
In November 2019, 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) (the “Complaint”). The Complaint, as amended, alleges breach of contract, breach of fiduciary duty, unjust enrichment, intentional misrepresentation, rescission, civil conspiracy, and seeking an accounting and declaratory judgment and damages in excess of $75,000. On November 15, 2019, the Company filed counterclaims against Kind and a third-party complaint against the members of Kind ~~(Jennifer DiPietro, Susan Zimmerman, and Sophia Leonard-Burns) and William Tham (the “Counterclaims”). The Counterclaims, as amended, allege breach of contract~~was dismissed in its entirety with ~~respect to each of the partnership/joint venture agreement, the MOU, the MSA, the Lease,~~prejudice, and the ~~Licensing~~parties released one another of any and Manufacturing Agreement (“LMA”), unjust enrichment, promissory estoppel/detrimental reliance, fraud in the inducement, breach of fiduciary duty, and seeks reformation of the MSA, a declaratory judgment regarding enforceability of the partnership/joint venture arrangement and/or the MOU, specific performance of the parties’ various contracts, and the establishment of a constructive trust for the Company’s benefit. The Counterclaims also seek damages.
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 Lease “appear to be independent, valid and enforceable contracts.”
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 is seeking judgment at trial in the amount of approximately $5.4 million for past due rent and 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 hearing) and granting the Company’s request for preliminary injunction. The Court determined that the Company 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 members, and 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 effect.
~~In addition to the favorable rulings on the Lease, MSA, and LMA, the Company believes that its~~all claims with respect to the 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. The Company has opposed both motions and has filed a petition for civil contempt against the Kind parties for interfering with the Company’s management of Kind. The motions and petition are pending, and the preliminary injunction remains in effect.
~~The Company intends to aggressively prosecute and defend the action. Trial has been scheduled from March 28, 2022 to April 11, 2022.~~
~~DiPietro Lawsuit~~
In August 2020, Jennifer DiPietro, directly and derivatively on behalf of Mari Holdings MD LLC (“Mari-MD”) and Mia Development LLC (“Mia”), commenced an action against the Company’s CEO, CFO, and wholly-owned subsidiary MariMed Advisors Inc. (“MMA”), in Suffolk Superior Court, Massachusetts (C.A. No. 20-1865).
In this action, DiPietro, a party to prior ongoing litigation in Maryland involving the Company and Kind as discussed above, asserts claims for breach of fiduciary duty, breach of contract, fraud in the inducement, aiding and abetting the alleged breach of fiduciary duty, seeks access to books and records, and an accounting related to her investments in Mari-MD and Mia. DiPietro seeks unspecified monetary damages and rescission of her interest in Mari-MD, but not of her investment in Mia, which has provided substantial returns to her as a member.
The Company has answered the complaint and MMA has moved for leave to file counterclaims against DiPietro on its own behalf and derivatively on behalf of Mari-MD for DiPietro’s breach of her fiduciary duties to each of those entities, for tortious interference with Mari-MD’s lease and MMA’s management services agreement with Kind, and for breach of Mari-MD’s operating agreement.
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.between them.

45
In April 2022, the Company and DiPietro agreed to dismiss all direct claims and counterclaims asserted in a separate litigation between them. In addition to their direct claims, the parties also asserted derivative claims, which may be dismissed only with the court’s approval. On April 12, 2022, the court approved the form of notice to be delivered to unit holders of Mia Development LLC and Mari Holdings MD LLC, majority-owned subsidiaries of the Company, and scheduled a hearing to approve dismissal of all derivative claims for June 8, 2022.
Other than the above, there has been no material change to the status of the Company’s legal proceedings.

Item 1A. Risk Factors

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, ~~2020.~~2021. 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.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, ~~2021,~~2022, the Company issued (i) ~~4,610,645~~1,142,858 shares of common stock upon the conversion of ~~debentures,~~$400,000 of promissory notes, (ii) ~~3,365,972~~10,000 shares of common stock ~~upon~~in connection with the ~~conversion~~exercise of ~~promissory notes,~~stock options at an exercise price of $0.30 per share, and (iii) ~~50,000~~375,000 shares of common stock upon the exercise of a warrant, (iv) 42,857 shares of common stock to satisfy an obligation, and (v) 11,413 shares of common stock related to an employee stock grant. In addition, the Company sold 6,216,216 shares of Series C convertible preferred stock.valued at $274,000 in exchange for consulting services.

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.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

46 37
Item 6. Exhibits

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 (h)

3.1.3 Certificate Eliminating the Series A Preferred Stock as filed with the Secretary of State of Delaware on February 27, 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 (q)
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 (q)
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 (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 (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 (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 (j)

4.3 Common Stock Purchase Warrant, dated June 24, 2020, issued by MariMed Inc.to SYYM 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 (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 (m)
47
4.6 Common Stock Purchase Warrant, dated September 30, 2020, issued by MariMed Inc.to Best Buds Funding, LLC. and/or its 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~~

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 Amended and Restated 2018 Stock Award and Incentive Plan (d)
10.1.1 ~~Employment Agreement dated~~Amendment to the Amended and Restated 2018 Stock Award and Incentive Plan, effective as of ~~August 30, 2012 between Worlds Online Inc. and Thomas Kidrin (o)~~September 23, 2021 (q)

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 (d)~~
~~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 (e)
38
10.3
~~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 (g)

~~10.10~~10.4 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~~10.5 Amendment Agreement dated June 24, 2020, between SYYM LLC, as noteholder and collateral agent, and MariMed Inc. and MariMed Hemp Inc., as co-borrowers (l)

~~10.12~~10.6 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 (n)

~~10.13~~10.7 Securities Purchase Agreement, dated March 1, 2021, between MariMed Inc. and Hadron Healthcare Master Fund ~~(p)~~(q)

~~10.14~~10.8 First Amendment to Securities Purchase Agreement, dated March 18, 2021, between MariMed Inc. and Hadron Healthcare Master Fund (q)

~~10.15~~10.9
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)
48
10.10 *** Employment Agreement between MariMed Inc. and Robert Fireman, dated July 9, 2021 (s)
10.11 *** Employment Agreement between MariMed Inc. and Jon R. Levine, dated July 9, 2021 (s)
10.12 *** Employment Agreement between MariMed Inc. and Timothy Shaw, dated July 9, 2021 (s)
10.13 *** 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 (q)
10.14 *** Form of Stock Option Agreement, dated July 9, 2021, with each of Robert Fireman, Jon R. Levine, and Timothy Shaw (q)
10.15 *** Form of Stock Option Agreement, dated October 1, 2021, with each of Robert Fireman, Jon R. Levine, and Timothy Shaw (q)
10.16 Settlement Agreement and General Release, dated August 19, 2021, between MariMed Inc. and Thomas Kidrin (q)
10.17 Membership Interest Purchase Agreement, dated December 31, 2021, between MariMed Inc. and Jennifer DiPietro, Susan Zimmerman and Sophia Leonard-Burns (c)
10.18 Membership Interest Purchase Agreement, dated December 31, 2021, between MariMed Advisors Inc. and Jennifer DiPietro (c)
31.1. Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer *

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

32.1. Section 1350 Certifications of Chief Executive Officer **

32.2. Section 1350 Certifications of Chief Financial 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) *

* Filed herewith.
** Furnished herewith in accordance with Item 601 (32)(ii) of Regulation S-K.
*** This exhibit is a management contract or compensatory plan or arrangement.
39

(a) ~~Incorporated by reference~~Previously filed as an exhibit to ~~the same numbered exhibit of~~ the Registration Statement on Form 10-12G (File No. 000-54433) filed on June 9, ~~2011.~~2011 and incorporated herein by reference.

(b) ~~Incorporated by reference~~Previously filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2016, filed on April 17, ~~2017.~~2017 and incorporated herein by reference.

(c) ~~Incorporated by reference~~Previously filed as an exhibit to the ~~Current~~Annual Report on Form ~~8-K~~10-K for the year ended December 31, 2021, filed on ~~November 9, 2018.~~March 16, 2022 and incorporated herein by reference.

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

(e) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.2 of~~ the Quarterly Report on Form 10-Q for the period ended September 30, 2019, filed on November 29, ~~2019.~~2019 and incorporated herein by reference.

(f) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 4.1 of~~ the Current Report on Form 8-K filed on February 12, ~~2020.~~2020 and incorporated herein by reference.

(g) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.1 of~~ the Current Report on Form 8-K filed on February 12, ~~2020.~~2020 and incorporated herein by reference.

(h) ~~Incorporated by reference~~Previously filed as an exhibit to the Current Report on Form 8-K filed on February 27, ~~2020.~~2020 and incorporated herein by reference.

(i) ~~Incorporated by reference~~Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the period ended March 31, 2020, filed on May 28, ~~2020.~~2020 and incorporated herein by reference.

(j) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 4.1 of~~ the Current Report on Form 8-K filed on June 30, ~~2020.~~2020 and incorporated herein by reference.

(k) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 4.2 of~~ the Current Report on Form 8-K filed on June 30, ~~2020.~~2020 and incorporated herein by reference.

(l) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.1 of~~ the Current Report on Form 8-K filed on June 30, ~~2020.~~2020 and incorporated herein by reference.

(m) ~~Incorporated by reference~~Previously filed as an exhibit to ~~the same numbered exhibit of~~ the Current Report on Form 8-K filed on October 26, ~~2020.~~2020 and incorporated herein by reference.

(n) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.13 of~~ the Current Report on Form 8-K filed on October 26, ~~2020.~~2020 and incorporated herein by reference.

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

(p)
~~Incorporated by reference~~Previously filed as an exhibit to ~~the same numbered exhibit of~~ the Current Report on Form 8-K filed on March 2, ~~2021.~~
2021 and incorporated herein by reference.

(q)
~~Incorporated by reference~~Previously filed as an exhibit to the ~~same numbered exhibit of the Annual~~Quarterly Report on Form ~~10-K~~10-Q for the ~~year~~period ended ~~December 31, 2020,~~September 30, 2021 filed on ~~March 23, 2021.~~
November 15, 2021 and incorporated herein by reference.
(r)
~~Incorporated by reference~~Previously filed as an exhibit to ~~the exhibit of~~ the Current Report on Form 8-K filed on March 23, ~~2021.~~
2021 and incorporated herein by reference.
(s) Previously filed as an exhibit to the Current Report on Form 8-K filed on July 9, 2021 and incorporated herein by reference.

49 40

SIGNATURES

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

Date: May ~~17, 2021~~10, 2022

MARIMED INC.

By: /s/ Robert Fireman
Robert Fireman

President and Chief Executive Officer
(Principal Executive Officer)

By: /s/ Jon R. Levine
Jon R. Levine

Chief Financial Officer
(Principal Financial Officer)

50 41
INDEX TO EXHIBITS

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 (h)

3.1.3 Certificate Eliminating the Series A Preferred Stock as filed with the Secretary of State of Delaware on February 27, 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 (q)
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 (q)
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 (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 (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 (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 (j)

4.3 Common Stock Purchase Warrant, dated June 24, 2020, issued by MariMed Inc.to SYYM 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 (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 (m)
4.6 Common Stock Purchase Warrant, dated September 30, 2020, issued by MariMed Inc.to Best Buds Funding, LLC. and/or its 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.~~Amended and ~~Thomas Kidrin (o)~~
51
~~10.2~~ ~~2011 Stock Option and Restricted~~Restated 2018 Stock Award and Incentive 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)~~(d)

~~10.5~~10.1.1 ~~Form~~Amendment to the Amended and Restated 2018 Stock Award and Incentive Plan, effective as of ~~Securities Purchase Agreement between the Company and YA II PN, LTD. (c)~~September 23, 2021 (q)

~~10.6~~10.2 ~~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 (d)~~
~~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 (e)
42
10.3
~~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 (g)

~~10.10~~10.4 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~~LLC. (h)

~~10.11~~10.5 Amendment Agreement dated June 24, 2020, between SYYM LLC, as noteholder and collateral agent, and MariMed Inc. and MariMed Hemp Inc., as co-borrowers (l)

~~10.12~~10.6 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 (n)

~~10.13~~10.7 Securities Purchase Agreement, dated March 1, 2021, between MariMed Inc. and Hadron Healthcare Master Fund ~~(p)~~(q)

~~10.14~~10.8 First Amendment to Securities Purchase Agreement, dated March 18, 2021, between MariMed Inc. and Hadron Healthcare Master Fund (q)

~~10.15~~
10.9
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)
10.10 *** Employment Agreement between MariMed Inc. and Robert Fireman, dated July 9, 2021 (s)
10.11 *** Employment Agreement between MariMed Inc. and Jon R. Levine, dated July 9, 2021 (s)
10.12 *** Employment Agreement between MariMed Inc. and Timothy Shaw, dated July 9, 2021 (s)
10.13 *** 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 (q)
10.14 *** Form of Stock Option Agreement, dated July 9, 2021, with each of Robert Fireman, Jon R. Levine, and Timothy Shaw (q)
10.15 *** Form of Stock Option Agreement, dated October 1, 2021, with each of Robert Fireman, Jon R. Levine, and Timothy Shaw (q)
10.16 Settlement Agreement and General Release, dated August 19, 2021, between MariMed Inc. and Thomas Kidrin (q)
10.17 Membership Interest Purchase Agreement, dated December 31, 2021, between MariMed Inc. and Jennifer DiPietro, Susan Zimmerman and Sophia Leonard-Burns (c)
10.18 Membership Interest Purchase Agreement, dated December 31, 2021, between MariMed Advisors Inc. and Jennifer DiPietro(c)

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

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

32.1. Section 1350 Certifications of Chief Executive Officer **

32.2. Section 1350 Certifications of Chief Financial 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) *

52
* Filed herewith.
** Furnished herewith in accordance with Item 601 (32)(ii) of Regulation S-K.
*** This exhibit is a management contract or compensatory plan or arrangement.
43
(a) ~~Incorporated by reference~~Previously filed as an exhibit to ~~the same numbered exhibit of~~ the Registration Statement on Form 10-12G (File No. 000-54433) filed on June 9, ~~2011.~~2011 and incorporated herein by reference.

(b) ~~Incorporated by reference~~Previously filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2016, filed on April 17, ~~2017.~~2017 and incorporated herein by reference.

(c) ~~Incorporated by reference~~Previously filed as an exhibit to the ~~Current~~Annual Report on Form ~~8-K~~10-K for the year ended December 31, 2021, filed on ~~November 9, 2018.~~March 16, 2022 and incorporated herein by reference.

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

(e) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.2 of~~ the Quarterly Report on Form 10-Q for the period ended September 30, 2019, filed on November 29, ~~2019.~~2019 and incorporated herein by reference.

(f) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 4.1 of~~ the Current Report on Form 8-K filed on February 12, ~~2020.~~2020 and incorporated herein by reference.

(g) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.1 of~~ the Current Report on Form 8-K filed on February 12, ~~2020.~~2020 and incorporated herein by reference.

(h) ~~Incorporated by reference~~Previously filed as an exhibit to the Current Report on Form 8-K filed on February 27, ~~2020.~~2020 and incorporated herein by reference.

(i) ~~Incorporated by reference~~Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the period ended March 31, 2020, filed on May 28, ~~2020.~~2020 and incorporated herein by reference.

(j) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 4.1 of~~ the Current Report on Form 8-K filed on June 30, ~~2020.~~2020 and incorporated herein by reference.

(k) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 4.2 of~~ the Current Report on Form 8-K filed on June 30, ~~2020.~~2020 and incorporated herein by reference.

(l) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.1 of~~ the Current Report on Form 8-K filed on June 30, ~~2020.~~2020 and incorporated herein by reference.

(m) ~~Incorporated by reference~~Previously filed as an exhibit to ~~the same numbered exhibit of~~ the Current Report on Form 8-K filed on October 26, ~~2020.~~2020 and incorporated herein by reference.

(n) ~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.13 of~~ the Current Report on Form 8-K filed on October 26, ~~2020.~~2020 and incorporated herein by reference.

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

(p) ~~Incorporated by reference~~Previously filed as an exhibit to ~~the same numbered exhibit of~~ the Current Report on Form 8-K filed on March 2, ~~2021.~~2021 and incorporated herein by reference.

(q) ~~Incorporated by reference~~Previously filed as an exhibit to the ~~same numbered exhibit of the Annual~~Quarterly Report on Form ~~10-K~~10-Q for the ~~year~~period ended ~~December 31, 2020,~~September 30, 2021 filed on ~~March 23, 2021.~~November 15, 2021 and incorporated herein by reference.

(r) ~~Incorporated by reference~~Previously filed as an exhibit to ~~the exhibit of~~ the Current Report on Form 8-K filed on March 23, ~~2021.~~2021 and incorporated herein by reference.
(s) Previously filed as an exhibit to the Current Report on Form 8-K filed on July 9, 2021 and incorporated herein by reference.

53 44

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

	March 31, 2021			December 31, 2020
Bank of New England – Massachusetts properties	$	12,749,474		$	12,834,090
Bank of New England – Delaware property		1,547,757			1,575,658
DuQuoin State Bank – Illinois properties		806,980			814,749
South Porte Bank – Illinois property		894,587			906,653
Total mortgages payable		15,998,798			16,131,150
Mortgages payable, current portion		(1,382,411	)		(1,387,014	)
Mortgages payable, less current portion	$	14,616,387		$	14,744,136

Issue Date	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
11/07/18	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		5,000,000
06/28/19	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
02/21/20	02/20/21		1,000,000		6.5%		6.5%		28,021		379,183		1,000,000

		Shares Under Option
Exercise Price per Share		Outstanding		Exercisable		Remaining Life in Years
	$0.140		160,000		40,000	4.28
	$0.149		500,000		500,000	4.76
	$0.169		200,000		200,000	4.62
	$0.210		70,000		50,000	4.65
	$0.225		2,000,000		875,000	4.61
	$0.250		20,000		15,000	4.17
	$0.250		50,000		-	4.57
	$0.250		800,000		200,000	4.62
	$0.250		80,000		40,000	4.65
	$0.250		50,000		50,000	3.92
	$0.300		554,500		277,250	4.00
	$0.417		900,000		900,000	3.74
	$0.450		125,000		125,000	0.51
	$0.505		100,000		-	4.76
	$0.505		800,000		-	4.78
	$0.590		15,000		15,000	3.69
	$0.630		300,000		300,000	0.75
	$0.770		200,000		200,000	1.75
	$0.830		287,000		71,750	4.98
	$0.890		10,000		-	4.81
	$0.892		40,000		-	4.81
	$0.895		25,000		-	4.82
	$0.900		50,000		50,000	2.11
	$0.910		50,000		50,000	1.56
	$0.950		50,000		50,000	1.75
	$0.992		300,000		300,000	3.49
	$1.000		125,000		125,000	3.59
	$1.350		100,000		75,000	2.33
	$1.950		375,000		375,000	2.25
	$2.320		100,000		100,000	2.45
	$2.450		2,000,000		2,000,000	1.73
	$2.500		100,000		100,000	2.41
	$2.650		200,000		200,000	2.48
	$2.850		56,250		56,250	1.70
	$2.850		100,000		100,000	2.70
	$3.000		25,000		25,000	2.71
	$3.725		100,000		100,000	2.69
			11,017,750		7,565,250

Exercise Price		Shares Under Option				Remaining Life
per Share		Outstanding		Exercisable		in Years
	$0.140		80,000		80,000		3.28
	$0.149		500,000		500,000		3.76
	$0.169		200,000		200,000		3.62
	$0.225		2,000,000		1,625,000		3.61
	$0.250		50,000		50,000		2.92
	$0.250		20,000		20,000		3.17
	$0.250		50,000		25,000		3.57
	$0.250		800,000		800,000		3.62
	$0.250		80,000		80,000		3.65
	$0.300		388,000		388,000		3.00
	$0.417		900,000		900,000		2.74
	$0.505		100,000		100,000		3.76
	$0.505		800,000		400,000		3.78
	$0.590		15,000		15,000		2.69
	$0.690		15,000		-		4.68
	$0.693		500,000		-		4.69
	$0.700		650,000		50,000		4.67
	$0.740		520,000		425,625		4.08
	$0.755		1,050,000		550,000		4.73
	$0.770		200,000		200,000		0.75
	$0.800		25,000		-		4.64
	$0.830		287,000		287,000		3.98
	$0.830		600,000		150,000		4.16
	$0.840		878,921		878,921		4.29
	$0.840		99,000		59,400		4.34
	$0.850		90,000		49,375		4.21
	$0.850		72,500		14,375		4.63
	$0.870		250,000		-		4.76
	$0.880		11,550,000		5,925,000		4.28
	$0.880		15,000		7,500		4.37
	$0.880		410,000		102,500		4.59
	$0.890		10,000		5,000		3.81
	$0.892		40,000		30,000		3.81
	$0.895		25,000		25,000		3.82
	$0.898		11,250,000		5,625,000		4.50
	$0.900		50,000		50,000		1.11
	$0.910		50,000		50,000		0.56
	$0.920		300,000		37,500		4.27
	$0.928		500,000		200,000		4.36
	$0.950		50,000		50,000		0.75
	$0.970		100,000		100,000		4.21
	$0.983		145,000		61,250		4.24
	$0.990		500,000		125,000		4.47
	$0.992		300,000		300,000		2.49
	$1.000		15,000		15,000		2.21
	$1.000		125,000		125,000		2.59
	$1.350		100,000		100,000		1.33
	$1.950		375,000		375,000		1.25
	$2.320		100,000		100,000		1.45
	$2.450		2,000,000		2,000,000		0.73
	$2.500		100,000		100,000		1.41
	$2.650		200,000		200,000		1.48
	$2.850		56,250		56,250		0.70
	$2.850		100,000		100,000		1.70
	$3.000		25,000		25,000		1.71
	$3.725		100,000		100,000		1.69
			39,811,671		23,837,696

	2021		2020
Product sales	$	20,949,092	$	4,232,828
Real estate		1,808,799		1,973,098
Management		895,703		429,632
Supply procurement		519,504		430,134
Licensing		469,466		400,327
Total revenues	$	24,642,564	$	7,466,019

	●	Delaware – 4,000square feet of retail space in a multi-use building under a five-year lease that expires in ~~December 2021 with a five-year option to extend. The~~April 2027 that the Company has developed ~~the space~~ into a cannabis dispensary which is subleased to its cannabis-licensed ~~client.~~client.

	●	Delaware – a 100,000square foot warehouse, ~~leased in March 2019 that~~of which the Company ~~is developing~~developed 60,000 square feet into a cultivation ~~and processing~~ facility ~~to be~~that is being subleased to ~~the same Delaware~~its cannabis-licensed client. The lease ~~term is~~ 10 ~~years,~~expires in March 2030, with an option to extend the term for three additional five-year ~~periods.~~periods.

	●	Delaware –a– 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~~sublease 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~~ lease with a related party expiring in 2028, with an option to extend the term for an additional five-year period.

	●	Maryland – a 2,700square foot ~~2-unit~~two-unit apartment under a lease that expires in July 2022..

		2021
Operating lease cost	$	266,580	$	277

Finance lease cost:
Amortization of right-of-use assets	$	8,171	$	19
Interest on lease liabilities		1,504		7
Total finance lease cost	$	9,675	$	26

	Operating Leases			Finance Leases			Operating Leases			Finance Leases
2021	$	845,987		$	28,809
2022		1,071,079			27,123		$	849		$	135
2023		1,035,017			23,201			1,119			173
2024		963,589			3,229			1,050			153
2025		936,947			-			1,025			150
2026								970			21
Thereafter		3,468,041			-			2,611			-
Total lease payments		8,320,660		$	82,362			7,624		$	632
Less: imputed interest		(2,177,632	)		(7,560	)		(2,153	)		(82	)
	$	6,143,028		$	74,802		$	5,471		$	550

	●	Cost of Revenues – the direct costs associated with the generation of the Company’s revenues.

	●	Operating Expenses – comprised of the sub-categories of personnel, marketing and promotion, general and administrative, and bad debts.

	●	Non-operating Income and Expenses – comprised of the sub-categories of interest expense, interest income, ~~losses~~loss on ~~debt settlements, and~~obligations settled with equity, gain (loss) on changes in ~~the~~ fair value of ~~non-consolidated investments.~~investment, and other investment income.

	●	Cash and cash equivalents increased ~~four-fold~~13% to ~~approximately $12.3~~$33.5 million at March 31, ~~2021,~~2022, from ~~approximately $3.0~~$29.7 million at December 31, ~~2020.~~

	●	Working capital increased to approximately $17.1 million at March 31, 2021 from a working capital deficit of approximately $2.2 million at December 31, 2020, a positive swing of approximately $19.3 million.2021.

	●	InWorking capital increased 16% to $20.1 million at March 31, 2022 from $17.4 million at December 31, 2021.

	●	Cash flow provided by operating activities increased 26% to $8.5 million in the three months ended March 31, ~~2021, the Company’s operating activities provided positive cash flow of approximately~~2022 from $6.8 million ~~compared to approximately $407,000 of negative cash flow used in such activities~~ in the same period in ~~2020, an increase of approximately $7.2 million.~~2021.

	●	Net income before income taxes increased 43% to $7.9 million in the three months ended March 31, 2022 from $5.5 million in the same period in 2021.

	-	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)	~~Subject~~Continue to consolidate the ~~applicable state approvals, continue~~cannabis businesses that the ~~execution of its Consolidation Plan.~~Company has developed and manages.

2)	Expand revenue, assets, and its footprint in the states in which the Company is operating.

2)	-	~~Identify and~~In Massachusetts, the Company intends to open two ~~new dispensary locations in Massachusetts that can service both~~additional dispensaries and significantly expand the ~~medical~~capacity and ~~adult-use marketplaces.~~capability of its manufacturing facility.
	-	In Delaware, the Company intends to develop an additional 40,000 square feet of cultivation and production at its 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, the Company intends to go vertical by acquiring one or more craft licenses and to potentially add up to six more dispensaries up to the statutory limit of ten.

3)	~~Increase sales~~Expand into other legal states through M&A and ~~profits~~filing new applications in ~~Delaware by expanding cultivation and processing facilities.~~states where new licensing opportunities arise.

4)	~~Complete the acquisition of Maryland, subject~~Expand revenues by producing and distributing its award-winning brands to ~~resolution of the outstanding litigation, and proceed with a plan to expand the cultivation and processing facilities as well as adding a dispensary location.~~

5)	Drive licensing fees through the expansion of the Company’s Nature’s Heritage™ branded flower and popular infused-product brands Betty’s Eddies® and Kalm Fusion® into the Company’s owned and managed facilities, and withqualified strategic partners ~~into additional markets. Expand the exclusively licensed Tropizen®~~or acquiring production and ~~Binske® brands.~~

6)	~~Identify acquisition opportunities in other states.~~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 (h)

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

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 (q)

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 (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 (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 (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 (j)

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

4.6		Common Stock Purchase Warrant, dated September 30, 2020, issued by MariMed Inc.to Best Buds Funding, LLC. and/or its 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~~
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		Amended and Restated 2018 Stock Award and Incentive Plan (d)

10.1.1		~~Employment Agreement dated~~Amendment to the Amended and Restated 2018 Stock Award and Incentive Plan, effective as of ~~August 30, 2012 between Worlds Online Inc. and Thomas Kidrin (o)~~September 23, 2021 (q)

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 (d)~~

~~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 (e)

10.3
~~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 (g)

~~10.10~~10.4		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~~10.5		Amendment Agreement dated June 24, 2020, between SYYM LLC, as noteholder and collateral agent, and MariMed Inc. and MariMed Hemp Inc., as co-borrowers (l)

~~10.12~~10.6		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 (n)

~~10.13~~10.7		Securities Purchase Agreement, dated March 1, 2021, between MariMed Inc. and Hadron Healthcare Master Fund ~~(p)~~(q)

~~10.14~~10.8		First Amendment to Securities Purchase Agreement, dated March 18, 2021, between MariMed Inc. and Hadron Healthcare Master Fund (q)

~~10.15~~10.9		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)


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

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

10.13 ***		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 (q)

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

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

10.16		Settlement Agreement and General Release, dated August 19, 2021, between MariMed Inc. and Thomas Kidrin (q)

10.17		Membership Interest Purchase Agreement, dated December 31, 2021, between MariMed Inc. and Jennifer DiPietro, Susan Zimmerman and Sophia Leonard-Burns (c)

10.18		Membership Interest Purchase Agreement, dated December 31, 2021, between MariMed Advisors Inc. and Jennifer DiPietro (c)

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

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

32.1.		Section 1350 Certifications of Chief Executive Officer **

32.2.		Section 1350 Certifications of Chief Financial 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~~Previously filed as an exhibit to ~~the same numbered exhibit of~~ the Registration Statement on Form 10-12G (File No. 000-54433) filed on June 9, ~~2011.~~2011 and incorporated herein by reference.

(b)	~~Incorporated by reference~~Previously filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31, 2016, filed on April 17, ~~2017.~~2017 and incorporated herein by reference.

(c)	~~Incorporated by reference~~Previously filed as an exhibit to the ~~Current~~Annual Report on Form ~~8-K~~10-K for the year ended December 31, 2021, filed on ~~November 9, 2018.~~March 16, 2022 and incorporated herein by reference.

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

(e)	~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.2 of~~ the Quarterly Report on Form 10-Q for the period ended September 30, 2019, filed on November 29, ~~2019.~~2019 and incorporated herein by reference.

(f)	~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 4.1 of~~ the Current Report on Form 8-K filed on February 12, ~~2020.~~2020 and incorporated herein by reference.

(g)	~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.1 of~~ the Current Report on Form 8-K filed on February 12, ~~2020.~~2020 and incorporated herein by reference.

(h)	~~Incorporated by reference~~Previously filed as an exhibit to the Current Report on Form 8-K filed on February 27, ~~2020.~~2020 and incorporated herein by reference.

(i)	~~Incorporated by reference~~Previously filed as an exhibit to the Quarterly Report on Form 10-Q for the period ended March 31, 2020, filed on May 28, ~~2020.~~2020 and incorporated herein by reference.

(j)	~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 4.1 of~~ the Current Report on Form 8-K filed on June 30, ~~2020.~~2020 and incorporated herein by reference.

(k)	~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 4.2 of~~ the Current Report on Form 8-K filed on June 30, ~~2020.~~2020 and incorporated herein by reference.

(l)	~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.1 of~~ the Current Report on Form 8-K filed on June 30, ~~2020.~~2020 and incorporated herein by reference.

(m)	~~Incorporated by reference~~Previously filed as an exhibit to ~~the same numbered exhibit of~~ the Current Report on Form 8-K filed on October 26, ~~2020.~~2020 and incorporated herein by reference.

(n)	~~Incorporated by reference~~Previously filed as an exhibit to ~~Exhibit 10.13 of~~ the Current Report on Form 8-K filed on October 26, ~~2020.~~2020 and incorporated herein by reference.

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

(p)	~~Incorporated by reference~~Previously filed as an exhibit to ~~the same numbered exhibit of~~ the Current Report on Form 8-K filed on March 2, ~~2021.~~ 2021 and incorporated herein by reference.

(q)	~~Incorporated by reference~~Previously filed as an exhibit to the ~~same numbered exhibit of the Annual~~Quarterly Report on Form ~~10-K~~10-Q for the ~~year~~period ended ~~December 31, 2020,~~September 30, 2021 filed on ~~March 23, 2021.~~ November 15, 2021 and incorporated herein by reference.

(r)	~~Incorporated by reference~~Previously filed as an exhibit to ~~the exhibit of~~ the Current Report on Form 8-K filed on March 23, ~~2021.~~ 2021 and incorporated herein by reference.

(s)	Previously filed as an exhibit to the Current Report on Form 8-K filed on July 9, 2021 and incorporated herein by reference.

MARIMED INC.

By:	/s/ Robert Fireman
	Robert Fireman
	President and Chief Executive Officer (Principal Executive Officer)

By:	/s/ Jon R. Levine
	Jon R. Levine
	Chief Financial Officer (Principal Financial Officer)

~~10.2~~		~~2011 Stock Option and Restricted~~Restated 2018 Stock Award and Incentive 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)~~(d)

~~10.5~~10.1.1		~~Form~~Amendment to the Amended and Restated 2018 Stock Award and Incentive Plan, effective as of ~~Securities Purchase Agreement between the Company and YA II PN, LTD. (c)~~September 23, 2021 (q)

~~10.6~~10.2		~~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 (d)~~

~~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 (e)