Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Company's condensed consolidated financial statements and related notes. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those in such forward-looking statements as a result of many factors, including those discussed in "Cautionary Statement Regarding Forward-Looking Statements" and elsewhere, including Part II, Item 1A, in this Quarterly Report on Form 10-Q and the "Risk Factors" described in Part I, Item 1A, of our Annual Report on Form 10-K for the period ended June 30, 2026, our Current Reports on Form 8-K and our other SEC filings.

Company Overview

The Company is a specialty agricultural company focused on making and managing its agricultural investments in the United States and internationally.

On February 22, 2024, the Company acquired majority ownership in Bloomia, which produces and sells fresh-cut tulips.

Bloomia was founded in the Netherlands and has grown to become a leader in the fresh cut tulip industry in the U.S. Bloomia nurtures over 90 million tulip stems annually. Bloomia operates from three strategically positioned locations in the United States, the Netherlands, and South Africa, and also has a 30% interest in a greenhouse tulip business in Chile.

Bloomia operates greenhouses to hydroponically grow tulips at its United States and South Africa locations. The Company has invested in automation in its U.S. greenhouse in recent years that has increased production efficiency. Bloomia has historically sourced tulip bulbs from producers in the Netherlands, Chile, and New Zealand, which provides for year-round supply. Bulbs from the Southern Hemisphere are generally used from August to early December, with the Northern Hemisphere produced bulbs used the remainder of the year.

In the United States, Bloomia has established business relationships with prominent retailers. A small number of mass-market retailers in the U.S. have historically accounted for more than 75% of Bloomia's total annual sales. Bloomia has expanded sales across the United States with the majority of sales occurring on the East Coast. Bloomia aims to offer premium tulip stems, the result of sourcing larger bulbs, that have a longer shelf life than imported stems. Growing tulip stems domestically allows for higher margins because the freight costs for importing bulbs by sea have been substantially less than the costs associated with importing stems by air. Additionally, the Company pays less in tariffs importing bulbs versus fully grown stems.

In the Netherlands, Bloomia's office facilitates the sourcing of bulbs, conditioning to prepare bulbs for planting, and shipping of bulbs to its United States and South Africa facilities.

In South Africa, Bloomia's wholly owned subsidiary operates a greenhouse that has produced an average of approximately 3.5 million tulip stems per year over the last five years. The facility is capable of growing tulips hydroponically year-round and sells the majority of tulip stems to one large retailer.

In Chile, Bloomia has a 30% minority ownership interest in Araucania Flowers S.A. ("Araucania"). The operation grows tulips hydroponically year-round. Araucania traditionally sells to retailers located in Chile and Brazil.

The tulip sales business tends to be seasonal with spring being the strongest sales season in the U.S. Accounts receivable and inventory balances are at their lowest levels in the summer following the strong spring sales season. Inventory balances peak prior to the spring season.

Results of Operations

The following table sets forth, for the periods indicated, certain items in our condensed consolidated statements of operations as a percentage of total revenue, net.

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Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025

Revenue, Net. Revenue, net for the three months ended September 30, 2026 and 2025 was $4,961,000 and $5,153,000, respectively. The decrease is due to lower stem sales due to excess waste, partially offset by an increase in prices.

Gross Margin. Gross loss for the three months ended September 30, 2026 was $221,000, or (4.5)% as a percentage of revenue, compared to gross loss of $60,000, or (1.2)% as a percentage of revenue, for the three months ended September 30, 2025. The Company sold approximately 11% less stems in the current fiscal year resulting in a decrease in margin. Additionally, the Company recorded a one-time non-cash write-off of $448,000 related to ex-force bulbs that were harvested for less value than expected.

Sales, General and Administrative. Sales, general and administrative expenses for the three months ended September 30, 2026 were $2,886,000 compared to $2,983,000 for the three months ended September 30, 2025. The decrease is primarily due to the Company's efforts to control costs.

Interest Expense, net. Interest expense for the three months ended September 30, 2026 and 2025 was $515,000 and $822,000, respectively. The decrease is due to the reduction in the Seller note balance as a result of the discounted prepayment in the fourth quarter of fiscal year 2026.

Income Taxes. For the three months ended September 30, 2026 and 2025, the Company's effective income tax rate was 23.0% and 17.6%, respectively. See Note 9 in the condensed consolidated financial statements.

Net Loss Attributable to Noncontrolling Interest. The 18.6% noncontrolling interest in Tulp 24.1's loss was $517,000 for the three months ended September 30, 2026 compared to a loss of $511,000 for the three months ended September 30, 2025. The increased loss is primarily due to an increased net loss from Tulp 24.1's continuing operations in both periods.

Non-GAAP Financial Measures

This report includes EBITDA which is a "non-GAAP financial measure." The Company's EBITDA is defined as net loss before interest expense, provision for income taxes, and depreciation and amortization expense.

This non-GAAP financial measure, which is not calculated or presented in accordance with U.S. generally accepted accounting principles ("GAAP"), has been provided as information supplemental and in addition to the financial measures presented in accordance with GAAP. This non-GAAP financial measure is not a substitute for, or as an alternative to, and should be considered in conjunction with, the respective GAAP financial measures. The non-GAAP financial measure presented may differ from similarly named measures used by other companies. We believe this non-GAAP financial measure will be useful to permit investors to evaluate the business consistent with how management evaluates the business. Management has used EBITDA (a) to evaluate our historical and prospective financial performance and trends as well as our performance relative to competitors and peers; (b) to measure operational profitability consistently; (c) in presentations to the members of our Board of Directors; and (d) to evaluate compliance with covenants and restricted activities under the terms of our Amended Credit Agreement.

Included below is a reconciliation of EBITDA to net loss, the most directly comparable GAAP measure.

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Liquidity and Capital Resources

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The Company has financed its operations with proceeds from sales of its tulips and credit draws. The Company's liquidity varies during the year. The majority of cash is collected in the first half of the calendar year, and the majority of payments, primarily to purchase tulip bulbs, occur in the second half of the calendar year. At September 30, 2026, the Company's working capital (defined as current assets less current liabilities) was $6,499,000 compared to $7,311,000 at June 30, 2026. The decrease is due to $2,635,000 of revolver financing being classified as current as of September 30, 2026, as it is due by May 31, 2027. The Company drew approximately $8,000,000 on the revolver to pay for approximately $12,000,000 worth of Dutch tulip bulbs received since June 30, 2026. The remaining payments will be made in the next two quarters. These bulbs will be grown into stems and sold in 2027. Accounts receivable decreased from June 30, 2026 to September 30, 2026 as sales are highest in the spring resulting in higher accounts receivables. The first half of the fiscal year has lower sales and lower cash collections than the second half of the fiscal year.

Operating Activities. Net cash used in operating activities during the three months ended September 30, 2026 was $4,699,000 compared to cash use of $9,927,000 in the three months ended September 30, 2025. The Company purchased the majority of its bulbs from growers in the Netherlands in the period, which were priced in Euro. The price of bulbs decreased year over year resulting in less cash used.

Investing Activities. Net cash used in investing activities during the three months ended September 30, 2026 was $9,000 compared to cash used of $46,000 in the three months ended September 30, 2025. Capital expenditures were primarily related to spare parts in fiscal year 2027.

Financing Activities. Net cash provided by financing activities during the three months ended September 30, 2026 was $4,050,000. The Company drew a net $4,639,000 on its revolving line of credit, increasing the outstanding revolving credit facility balance to $8,635,000, primarily to purchase tulip bulbs in the three months ended September 30, 2026 and to fund the $450,000 term loan principal payment. In the three months ended September 30, 2025, the Company drew $8,575,000 on its revolver and borrowed $4,000,000 from related party notes to fund bulb purchases and pay the principal on the term loan. The decrease reflects the lower average cost per bulb and timing of payments.

Credit Facility

On February 20, 2024, the Company, as parent guarantor, Tulp 24.1 as the borrower (the "Borrower") and each of Tulipa, Bloomia B.V., and Fresh Tulips USA, LLC, as guarantors (collectively, the "Company Credit Parties"), entered into a Credit Agreement (the "Credit Agreement" and, as subsequently amended, the "Amended Credit Agreement") with Associated Bank, N.A. ("Lender") for a $18,000,000 term loan and a $6,000,000 revolving credit facility. On October 15, 2024, the Company Credit Parties entered into a First Amendment to Credit Agreement which, among other things, temporarily increased the borrowing capacity under the revolving credit facility to $8,000,000 until March 31, 2025. On September 15, 2025, the Company Credit Parties, entered into a Second Amendment to Credit Agreement, pursuant to which, among other things, the borrowing capacity under the revolving credit facility was temporarily increased from $6,000,000 to $10,000,000 and the definition of eligible inventory continued to include inventory in the Netherlands, in each case until April 30, 2026. The revolving credit facility may be used by Tulp 24.1 for general business purposes and working capital, subject to availability under a borrowing base consisting of 80% of eligible accounts receivable and generally 50% of eligible inventory. Borrowings under the Amended Credit Agreement bear interest at a rate per annum equal to SOFR for an interest period selected by the Company plus an applicable margin based on Tulp 24.1's senior cash flow leverage ratio. In addition to paying interest on the outstanding principal under the Amended Credit Agreement, Tulp 24.1 is required to pay a commitment fee of 0.50% on the unutilized commitments under the revolving credit facility.

Pursuant to a Waiver and Third Amendment to Credit Agreement ("Third Amendment") entered into by the Company Credit Parties on September 16, 2026, the additional interest rate margin under the Amended Credit Agreement was increased from a range of 3.00% to 4.00% to a range of 3.00% to 5.00%, with Tulp 24.1's senior cash flow leverage ratio for purposes of determining the additional interest rate margin now calculated based on Unadjusted EBITDA in lieu of EBITDA (with "Unadjusted EBITDA" for this purpose defined as the consolidated net income of Tulp 24.1 and its subsidiaries before deductions for income taxes paid in cash, interest expense, depreciation and amortization, in all cases calculated without duplication and in accordance with GAAP). The Third amendment also, among other things, (a) as described in greater detail below, adjusts the minimum fixed charge coverage ratio and maximum senior cash flow leverage ratio to levels the Company believes it can comply with for at least the next twelve months, (b) so long as no event of default has occurred and is continuing under the Amended Credit Agreement, temporarily increases the borrowing capacity under the revolving credit facility from $6,000,000 to $10,000,000 through May 31, 2027 (at which date, absent further amendment to the Amended Credit Agreement, the borrowing capacity under the revolving credit facility reverts back to $6,000,000), (c) temporarily amends the definition of eligible inventory to continue to include inventory in the Netherlands for the period from August 31, 2026 to May 31, 2027 (at which date, absent further amendment to the Amended Credit Agreement, inventory in the Netherlands will be excluded from the definition of eligible inventory), and (d) provides that, (i) if as of January 31, 2027, neither a Debt Refinance nor an Alternative Capital Raise has been consummated, a fee in the amount of $100,000 per month (the "Refinance Fee") shall accrue for the account of the Lender, commencing on February 1, 2027 and continuing on the first day of each month thereafter, (ii) if a Debt Refinance has been consummated on or before May 31, 2027, all Refinance Fees accrued through such date shall be waived and shall not be payable, and (iii) if a Debt Refinance has not been consummated on or before May 31, 2027, then (x) if the total outstanding principal balance under the revolving credit facility as of May 31, 2027 exceeds $3,000,000, the aggregate Refinance Fees accrued through May 31, 2027, in the amount of $400,000, shall be due and payable in cash to the Lender on June 1, 2027, and (y) if the total outstanding principal balance under the revolving credit facility as of May 31, 2027 is equal to or less than $3,000,000, then fifty percent (50%) of the aggregate Refinance Fee accrued through May 31, 2027, in the amount of $200,000, shall be due and payable in cash to the Lender on June 1, 2027. For as long as the Debt Refinance remains unconsummated, an additional Refinance Fee in the amount of $100,000 shall be due and payable in cash to the Lender on July 1, 2027 and on the first day of each month thereafter until the Debt Refinance is consummated. For purposes of the foregoing, (a) "Debt Refinance" means a refinancing of all outstanding obligations under the Amended Credit

Agreement in cash in full, and (b) "Alternative Capital Raise" means a capital raise from a mezzanine lender, group of mezzanine lenders, or other investors for gross proceeds of not less than $4,000,000. The Third Amendment further provides that all proceeds of any Alternative Capital Raise shall be applied solely in a manner approved by the Lender in its sole discretion.

The obligations under the Amended Credit Agreement are secured by substantially all of the personal property of Tulp 24.1 and its subsidiaries. The Company has also provided an unsecured guaranty of the obligations of Tulp 24.1 under the Amended Credit Agreement. Pursuant to the Third Amendment, the Amended Credit Agreement requires Tulp 24.1 and its subsidiaries to maintain (a) a minimum fixed charge coverage ratio of not less than (i) 1.00 to 1.00 as of the last day of the fiscal quarters ending September 30, 2026, December 31, 2026, and March 31, 2027, (ii) 1.10 to 1.00 as of the last day of the fiscal quarter ending June 30, 2027, and (iii) 1.25 to 1.00 as of the last day of the fiscal quarter ending September 30, 2027 and the last day of each fiscal quarter thereafter through the maturity date of the Amended Credit Agreement, and (b) a maximum senior cash flow leverage ratio of not greater than (i) 6.25 to 1.00 as of the last day of the fiscal quarter ending September 30, 2026, (ii) 6.75 to 1.00 as of the last day of the fiscal quarter ending December 31, 2026, (iii) 6.25 to 1.00 as of the last day of the fiscal quarter ending March 31, 2027, (iv) 3.50 to 1.00 as of the last day of the fiscal quarter ending June 30, 2027, and (v) 3.00 to 1.00 as of the last day of the fiscal quarter ending September 30, 2027 and the last day of each fiscal quarter thereafter through the maturity date of the Amended Credit Agreement. The Company was not in compliance with its financial covenants under the Amended Credit Agreement on December 31, 2025, March 31, 2026, and June 30, 2026, but received waivers from the Lender for each of these covenant breaches (including pursuant to waivers granted in the Third Amendment). The Amended Credit Agreement contains other customary affirmative and negative covenants, including covenants that restrict the ability of Tulp 24.1 and its subsidiaries to incur additional indebtedness, dispose of significant assets, make distributions or pay dividends, make certain investments, including any acquisitions other than permitted acquisitions, make certain payments, enter into sale and leaseback transactions or grant liens on its assets, subject to certain limitations. The Amended Credit Agreement also contains customary events of default, the occurrence of which would permit the Lenders to terminate its commitments and accelerate loans under the Amended Credit Agreement, including failure to make payments under the credit facility, failure to comply with covenants in the Amended Credit Agreement and other loan documents, cross default to other material indebtedness of Tulp 24.1 or any of its subsidiaries, failure of Tulp 24.1 or any of its subsidiaries to pay or discharge material judgments, bankruptcy of Tulp 24.1 or any of its subsidiaries, and a change of control of the Company or Tulp 24.1. The term loan under the Amended Credit Agreement is scheduled to be repaid in quarterly installments of $450,000 that commenced on June 30, 2024, with a scheduled maturity date of February 20, 2029. The term loan is subject to additional principal payments under the 50% of excess cash flow provision (waived if total net cash flow leverage is less than 2.0x as of its fiscal year-end). The scheduled maturity date of the revolving credit facility is February 20, 2029.

The Company has experienced operating challenges that have adversely affected financial results, liquidity, and compliance with certain financial covenants under its Amended Credit Agreement. As discussed above, the Company was not in compliance with certain financial covenants during fiscal year 2026, and subsequently obtained covenant waivers and entered into amendments to its credit facilities that provide additional financial flexibility and support the Company's ongoing liquidity requirements. The Company remains subject to financial and other covenants under its debt agreements, and future compliance is dependent, in part, upon achieving projected operating results and cash flows.

Management has evaluated the Company's liquidity position, including expected future cash flows from operations, available borrowing capacity under the Amended Credit Agreement, and the impact of the covenant relief and debt amendments described above. The Company expects that cash from operations combined with funds available under the Amended Credit Agreement will provide sufficient credit availability to support its ongoing operations, fund its new debt service requirements, capital expenditures and working capital for at least the next 12 months. However, if actual operating results are less favorable than currently projected, the Company may be required to pursue additional financing arrangements, obtain further amendments or waivers under its debt agreements, or implement additional liquidity-preserving measures.

As the Company grows its businesses, we may be required to obtain additional capital through equity offerings or additional debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of those securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include additional covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Additional capital may not be available when needed, on reasonable terms, or at all, and our ability to raise additional capital may be adversely impacted by potential worsening U.S. or global economic conditions and or disruptions to and volatility in the credit and financial markets in the U.S. and worldwide. If we are unable to raise additional funds when needed, we may not be able to grow our businesses or complete transactions related to the strategy.

Critical Accounting Estimates

A discussion of our critical accounting estimates is contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026. There have been no changes to our critical accounting estimates from those disclosed on our Form 10-K for the annual period ended June 30, 2026.

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Cautionary Statement Regarding Forward-Looking Statements

Certain statements made in this report that are not statements of historical or current facts are considered "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance of the Company to be materially different from the results or performance expressed or implied by such forward-looking statements. The words "anticipate," "believe," "could," "estimate," "expect," "future," "intend," "likely," "may," "plan," "project," "will" and similar expressions identify forward-looking statements. Forward-looking statements include statements expressing the intent, belief or current expectations of the Company and members of our management team regarding, for instance: (i) our belief that our cash balance, cash generated by operations and borrowings available under our Amended Credit Agreement, will provide adequate liquidity and capital resources for at least the next twelve months, and (ii) regarding the potential for growth and other opportunities for our business. Readers are cautioned not to place undue reliance on these forward- looking statements, which speak only as of the date the statement was made. These statements are subject to the risks and uncertainties that could cause actual results to differ materially and adversely from the forward-looking statements. These forward-looking statements are based on current information, which we have assessed and which by its nature is dynamic and subject to rapid and even abrupt changes.

Factors that could cause our estimates and assumptions as to future performance, and our actual results, to differ materially include the following: (1) our ability to integrate and continue to successfully operate the Bloomia business, (2) our ability to compete, (3) concentration of Bloomia's historical revenue among a small number of customers, (4) changes in interest rates, (5) ability to comply with the requirements of the Amended Credit Agreement and operate within its restrictions, (6) economic and market conditions that may restrict or delay appropriate or desirable opportunities, (7) our ability to develop and maintain necessary processes and controls relating to our businesses, (8) reliance on one or a small number of employees, (9) potential adverse classifications of the Company if we are unsuccessful in executing our business plans, (10) other economic, international, business, market, financial, competitive and/or regulatory factors affecting the Company's businesses generally, (11) our ability to attract and retain highly qualified managerial, operational and sales personnel, and (12) the availability of additional capital on desirable terms, if at all. Forward-looking statements involve known and unknown risks, uncertainties and other factors, including those set forth in this report and additional risks identified in our Annual Report on Form 10-K, this and subsequent Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K filed with the SEC. Such forward-looking statements should be read in conjunction with the Company's filings with the SEC. The Company assumes no responsibility to update the forward- looking statements contained in this report or the reasons why actual results would differ from those anticipated in any such forward-looking statement, other than as required by law.

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