NASDAQ: UGRO

Overview

Following the completion of the Merger, the Company
is a diversified sports, media, and experiential marketing platform focused on the creation, production, and monetization of live events,
original content, and branded fan experiences. The Company operates across multiple sports and entertainment verticals, leveraging proprietary
intellectual property, strategic partnerships, and high-impact experiential activations to engage global audiences and deliver measurable
value for brands, sponsors, and media partners. The Company’s platform integrates content creation, event execution, and media distribution
to build scalable businesses within the global sports and entertainment ecosystem. Flash Sports & Media maintains corporate offices
in the United Arab Emirates (headquarters), India, the United States, South Africa, and Singapore.

Through its subsidiaries,
the Company holds exclusive commercial and media rights to professional cricket leagues, produces international-standard broadcast content,
manages franchise operations, and monetizes sponsorship, ticketing, and digital media opportunities across multiple geographies. The Company’s
core operating subsidiary, Innovative Production Group FZ LLC (“IPG”), founded in 2015 and headquartered in Fujairah, United
Arab Emirates, is a global sports marketing, league management, ground sponsorship, and production company with more than 30 years of
collective cricket industry experience and deep expertise in international cricket properties and sports media. IPG is headquartered in
the UAE with branch offices in Sri Lanka, Singapore, India, Malaysia, and Zimbabwe, and has executed projects across 14 countries, including
the United States, Ireland, Scotland, South Africa, Saudi Arabia, Pakistan, Hong Kong, and Afghanistan. IPG has produced more than 5,000
hours of live sporting event broadcasts over the past seven years and has established working relationships with numerous national cricket
boards, including Cricket South Africa, the Pakistan Cricket Board, Cricket Ireland, Sri Lanka Cricket, the Afghanistan Cricket Board,
Zimbabwe Cricket, Cricket Scotland, the Emirates Cricket Board, Abu Dhabi Cricket, Malaysia Cricket, Kuwait Cricket, and the Asian Cricket
Council. IPG is the exclusive Event Rights Partner for the Lanka Premier League (“LPL”) under a Master Event Rights Agreement
with Sri Lanka Cricket (“SLC”) dated October 14, 2020.

1

Flash Business and Revenue Streams

The Company derives revenue from multiple streams,
primarily related to the production, commercialization, and management of professional cricket leagues and international cricket events.
The Company’s significant revenue streams are described below:

Production Fee Income.
Production income represents revenue earned from providing end-to-end live broadcast production services for cricket events, including
international bilateral series and T20 tournaments. Services include pre-event planning, live camera operations (utilizing a minimum of
26 cameras per match, including Hawk-Eye DRS, super slow-motion, spider cam, drone, and 6 DOF robotic “Buggy Cam” technology),
broadcasting infrastructure, technical staffing, satellite uplink and SNG distribution, and post-production. For the year ended December
31, 2024, production fee income represented approximately 42% of IPG’s total revenue, or approximately $5.1 million.

Franchise Fees. The
Company enters into agreements with third-party franchisees that operate individual teams in the LPL. The LPL currently features five
franchise teams, each of which pays franchise fees in exchange for team ownership and naming rights, jersey sponsorship rights, merchandising
and local sponsorship rights, stadium activation rights, and additional commercial and promotional rights including dugout branding, mascot
rights, post-match ceremony participation, big screen branding, and perimeter board branding. Each team features a squad of up to 16 players,
including a maximum of six international players from ICC Full/Associate Member Countries. For the year ended December 31, 2024, franchise
fees represented approximately 29% of IPG’s total revenue, or approximately $3.5 million.

Sponsorship Fees. The
Company generates sponsorship income through agreements with corporate sponsors who receive brand visibility across LPL events, including
on-field signage, jersey placements, digital promotions, and title/associate sponsorship designations. Sponsorship categories include
Title, Powered By, Present By, League Partner, Associate, and Umpire Partner tiers, as well as official brand partners and on-ground stall
activations. IPG has secured sponsorships from a range of major global and regional brands, including Dream11, My11Circle, Daraz, Coca-Cola,
Dettol, Red Bull, Pepsi, LG, Nippon Paint, Valvoline, Dialog, AIA, and others. For the year ended December 31, 2024, sponsorship fees
represented approximately 20% of IPG’s total revenue, or approximately $2.4 million.

Broadcast and Streaming
Rights. The Company earns licensing fees by granting third-party broadcasters and digital platforms the right to air or stream live
cricket content. The Company’s international media rights cover television, radio, digital, pay television, betting, gaming, in-flight,
mobile, and internet rights on an exclusive basis throughout the world excluding Sri Lanka, where terrestrial media rights are granted
on an exclusive basis. For the year ended December 31, 2024, broadcast rights represented approximately 5% of IPG’s total revenue,
or approximately $608,000.

Betting Data Rights.
The Company licenses exclusive rights to collect and distribute real-time match data for betting purposes, including delivery of live,
ball-by-ball statistical feeds for LPL tournaments, subject to compliance with applicable laws including ICC guidelines and regulations
and the laws of the countries in which the broadcast takes place.

Other Revenue. The
Company also earns revenue from team jersey sponsorship sales, ticketing income from the sale of match tickets to spectators attending
live events, franchisee box catering, ground branding and on-ground sales at match venues, and reimbursement income. For the year ended
December 31, 2024, other revenue collectively represented approximately 4% of IPG’s total revenue.

2

The Lanka Premier League

The Lanka Premier League is
a professional franchise T20 cricket league established in 2020 in Sri Lanka, bringing together top Sri Lankan cricketers and leading
international stars. The LPL is intellectual property owned by Sri Lanka Cricket; IPG holds the exclusive global commercial and media
rights (excluding certain Sri Lankan domestic rights reserved by SLC) under the Master Event Rights Agreement dated October 14, 2020 (the
“Event Rights Agreement”). Matches are played in the Twenty20 format by five franchise teams named after Sri Lankan cities:
the Colombo Strikers, Dambulla Sixers, Jaffna Kings, Galle Marvels, and Kandy Falcons. Each team features a squad of up to 100 local and
50 international players selected through an annual player auction process. As of the completion of the 2024 season, there have been five
editions of the tournament.

Since its inaugural season
in 2020, the LPL has demonstrated consistent growth in audience reach and sponsorship media valuation. Season 1 (2020) achieved a TV audience
of approximately 155 million, a digital audience of approximately 218 million, and a sponsorship media valuation of approximately $54.5
million. Season 2 (2021) grew to a TV audience of approximately 168 million, a digital audience of approximately 228 million, and a sponsorship
media valuation of approximately $82.5 million. Season 3 (2022) reached a TV audience of approximately 212 million, a digital audience
of approximately 261 million, and a sponsorship media valuation of approximately $114.7 million. Season 4 (2023) expanded to a TV audience
of approximately 315 million, a digital audience of approximately 282 million, and a sponsorship media valuation of approximately $149.5
million. The most recent completed season, Season 5 (2024), achieved a TV audience of approximately 380 million, a digital audience of
approximately 293 million, and a total sponsorship media valuation of approximately $176.5 million, representing year-over-year growth
of approximately 18%. The cumulative sponsorship media valuation across all five LPL seasons from 2020 through 2024 was approximately
$510.2 million. For Season 5 (2024), the sponsorship media valuation was comprised of approximately $100.9 million attributable to TV,
$37.8 million to OTT/digital platforms, $26.2 million to social media, and $11.6 million to press coverage. LPL content has been distributed
through major global broadcasters including Star Sports, Sony LIV, Sony Pictures Networks, A Sports HD, Kayo, Willow Live, Fox Sports,
T Sports, Ten Cricket, beIN Sports, Free Sports, SportsMax, and Sony Six, among others.

The sixth edition of the LPL
was staged from December 1 to December 23, 2025, across three premier venues in Sri Lanka — Colombo, Dambulla, and Kandy —
featuring 24 matches over 24 days with five competing franchises. All match venues are International Cricket stadia owned by SLC.

Under the Event Rights Agreement,
IPG holds four categories of exclusive rights: (A) Team Franchise / Team Ownership Rights — the right to select, engage, and manage
franchise team owners for the LPL; (B) International Media Rights and Terrestrial Media Rights — exclusive rights to license television,
radio, digital, pay television, betting, gaming, in-flight, mobile, and internet broadcasting of LPL matches globally; (C) Ground Sponsorship
Rights — rights to manage and sell in-venue branding, including LED boards, boundary signage, stump branding, presentation ceremonies,
and related activations; and (D) AV Production Rights — the right and obligation to produce all live and highlights content for
LPL matches to internationally recognized ICC standards.

The Event Rights Agreement
has an initial term of five annual tournaments commencing in 2020, with automatic one-year renewals subject to the timely payment of the
Event Rights Fee or provision of a bank guarantee to SLC. The Company’s rights must be secured annually through the payment of an
Event Rights Fee or the furnishing of an Irrevocable Unconditional Bank Guarantee by March 15 of each year. Failure to make timely payment
or furnish the required guarantee could result in termination of the Company’s rights for that year. IPG also holds a first right
of refusal to extend the agreement for an additional five-year term (through 2029), subject to mutually agreed terms.

In consideration for the Event
Rights, IPG pays SLC a minimum guaranteed annual Event Rights Fee. The minimum guaranteed fee for the launch year was USD 1,500,000 for
a 13-match format and USD 1,925,000 for a 23-match format. The Event Rights Fee escalates at approximately 10.5% to 11% per year for years
two through five. For the addition of teams beyond the initial five teams, an additional fee of USD 300,000 per team is payable. Additionally,
SLC is entitled to a revenue share of 10% of ground sponsorship and international media rights revenue during the first two years of the
agreement, increasing to 20% for years three through five. SLC also receives USD 20,000 per year in consideration for terrestrial media
rights. The Event Rights Fee is payable net of all taxes, withholdings, and bank charges.

3

SLC is responsible for all
costs related to the Match Control Team including per diems, catering for match officials and staff, cricket balls, venue costs, security,
janitorial and marketing communications costs, certain administrative expenses, and a component of the prize money. SLC releases to the
Event Rights Partner the entirety of the ticket sales revenue generated from all LPL matches during the term of the agreement. The Event
Rights Partner bears all costs and responsibility for printing, marketing, and the sale of tickets, subject to SLC’s prior approval
of ticket design. SLC reserves the President’s and Minister’s Boxes, a VIP Box, 100 grand stand tickets, and 50 complimentary
tickets on each tier, at no cost to SLC.

Geographic Expansion

In addition to the LPL in
Sri Lanka, IPG holds or has secured exclusive league management and commercial rights for several additional cricket properties in various
stages of development. IPG holds exclusive 10-year rights to the Singapore T10 League, awarded by the Singapore Cricket Association, which
encompasses TV and digital broadcasting rights, production rights, franchise sales rights, and league management rights for what is expected
to be the first T10 cricket league featuring both men’s and women’s competitions, with six teams in the initial year expanding
to eight from the third year. IPG holds exclusive 10-year rights to the Malaysian T20 League under a long-term agreement with the Malaysian
Cricket Association on an exclusive basis, covering linear TV, digital, operations, marketing, and commercial rights. IPG holds exclusive
20-year rights to the Zimbabwe T20 Cricket League under an agreement with Zimbabwe Cricket, encompassing full league management, broadcasting,
sponsorship, and franchise rights. IPG also holds exclusive 20-year rights to Kuwait’s T20 League, T10 League, and Legends League
under an agreement with Kuwait Cricket. These expansion initiatives are in various stages of development and are expected to extend the
Company’s footprint across high-growth emerging cricket markets. There can be no assurance that any of these expansion initiatives
will be completed on the terms anticipated, or at all, or that they will generate the revenue or returns expected. For the year ended
December 31, 2024, approximately 82% of IPG’s total revenue was generated from customers based in Sri Lanka, with the remaining
18% derived from Zimbabwe.

Technology and Live Production Capabilities

The Company operates at the
intersection of cutting-edge broadcast engineering and experiential digital entertainment. Our infrastructure enables seamless content
delivery across television, live streaming, and in-person activations from international cricket stadia and other venues. For purposes
of ensuring that the production quality conforms to internationally recognized standards in keeping with ICC regulations as well as ensuring
the brand image of SLC and of the LPL is duly maintained and built, the Company and its sub-licensees are required to meet minimum audio-visual
production standards as set out in the Event Rights Agreement.

Key production capabilities
include: live broadcast engineering utilizing 26 cameras per match (including 6 DOF robotic dolly Buggy Cam, Hawk-Eye DRS with minimum
specifications, super slow-motion cameras (Sony HDC-4300 4K / LDX86 or similar), ultra-slow-motion cameras (NAC or similar), stump cameras
with Zing LED technology, spider cam, drone, and standard Sony HDC 2500/3500 / HDK97 cameras); Grass Valley Kayak HD 3.5 M/E vision mixing;
EVS XT3 8/12-channel replay systems; Canon/Fujinon Super Wide lens arrays; satellite uplink and SNG distribution capabilities; and Hotspot
technology for Decision Review System at the discretion of SLC. The Company is required to commit to broadcast/stream the feed live in
full, covering every ball of each game, and to deliver a Clean Feed in High Definition in 16:9 aspect ratio, fully edited, completed,
titled and synchronized as to dialogue, music and effects.

The Company also maintains
studio and event production capabilities for the production of multiplatform content, branded formats, and digital programming, including
comprehensive studio shows aired before, during, and after each day’s play. IPG’s broadcast technology platform includes Hawkeye
DRS, spider cameras, drone cameras, buggy cameras, 3D HD cameras, and AR/VR graphics capabilities. IPG partners with leading cricket graphics
solution providers, including aegraphics.tv and wTVision, which maintain long-standing working relationships with many of the world’s
leading broadcasters, production houses, and sports governing bodies. IPG’s production crew includes experienced and world-renowned
directors, skilled producers, cameramen, EVS operators, and broadcast engineers. Recent live broadcast productions (2023–2025) include
the Bangladesh Tour of Sri Lanka, the West Indies Tour of Sri Lanka, the India Tour of Sri Lanka, LPL Seasons 4 and 5, the Legends Cricket
Trophy, the Afghanistan Tour of Sri Lanka, the Zimbabwe Tour of Sri Lanka, ACC Men’s Under 19 Asia Cup, and the Ireland Tour of
Zimbabwe, among others. These capabilities have also been applied to production for international cricket bilateral series across multiple
continents since 2015.

4

Growth Strategy — Planned Verticals and
Strategic Initiatives

Beyond the core IPG cricket
operations, the Company is evaluating and pursuing a number of strategic initiatives to expand the Flash Sports & Media platform into
adjacent verticals. These initiatives are in early stages and are subject to the negotiation and execution of definitive agreements, regulatory
approvals, and the availability of sufficient capital. There can be no assurance that any of these initiatives will be consummated on
the terms described below, or at all.

Our Competition

The Company operates in a
competitive landscape that includes other sports media, event management, and rights-holding companies. In the T20 cricket league space,
the Company competes for viewership, sponsorship, and franchise investment with established leagues including the Indian Premier League
(IPL), Big Bash League (BBL), Caribbean Premier League (CPL), Pakistan Super League (PSL), and SA20, among others. In the broader sports
media and experiential marketing space, we compete with global sports marketing agencies, broadcast production houses, and digital entertainment
companies. Many of our competitors have significantly greater financial, technical, marketing, and other resources than we do. We believe
our competitive advantages include our exclusive long-term contractual rights to the LPL and multiple other emerging cricket leagues,
our vertically integrated model spanning rights ownership, production, franchise management, sponsorship sales, and media distribution,
our track record of more than 5,000 hours of live broadcast production and established relationships with numerous national cricket boards,
our demonstrated ability to grow the LPL’s sponsorship media valuation from approximately $54.5 million in Season 1 to approximately
$176.5 million in Season 5, our global footprint with offices in six countries and operational experience across 14 countries, and our
multi-market expansion strategy targeting high-growth emerging cricket markets.

Our Clients

The Company’s clients
and commercial counterparties include franchise team owners, corporate sponsors, broadcasters and digital streaming platforms, sports
governing bodies, and media distribution agencies. IPG maintains working relationships with leading sports media agencies, including Sunset+Vine,
ITW, and IMG Reliance, which facilitate the distribution and monetization of IPG’s broadcast and media content globally. In 2023,
sales to four customers individually exceeded 10% of the Company’s total revenue. Collectively, these customers represented approximately
53% of total revenue. The Company’s reliance on these major customers presents a concentration risk. The loss of any of these customers
or a significant reduction in their orders could have a material adverse effect on the Company’s financial performance. The Company
continues to focus on efforts to diversify its customer base and geographic reach to mitigate such risks.

Intellectual Property

The Company’s intellectual
property consists primarily of its contractual rights under the Event Rights Agreement with SLC, which grants exclusive commercial exploitation
rights for the LPL. All intellectual property related to the LPL brand, including without limitation the LPL name, logo, trade names,
trademarks, and marks (collectively, “SLC’s IP”), remains at all times vested in, and the sole and exclusive property
of, SLC absolutely. At SLC’s request, the Event Rights Partner shall forthwith discontinue use of and return or destroy any material
containing any of SLC’s IP. Nothing contained in the Event Rights Agreement shall have the effect of assigning or otherwise transferring
any SLC intellectual property rights or marks to the Event Rights Partner or third party. All proprietary rights and intellectual property
rights in respect of the Clean Feed and Highlights produced by the Event Rights Partner and/or its licensees for purposes of AV Production
Rights vest absolutely with SLC.

5

The Company also holds proprietary
intellectual property related to its production processes, technical know-how, and operational methodologies for live broadcast production
of cricket and other sporting events. The Company may hold trademarks related to the Flash Sports & Media brand and associated sub-brands,
which are in the process of being formalized.

Human Capital

As of December 31, 2025, the
Company has approximately 5 employees, representing the core values and objectives of the Company.

Our employees are our most important assets, and they set the foundation
for our ability to achieve our strategic objectives. Our employees play a central role in the success of our long-term strategy. Our values
direct the management of our company and are built on the foundation that our people and the way we treat one another promote inclusion,
creativity, innovation, and productivity, which drives the Company’s success. We believe we offer fair, competitive compensation
and benefits that support our employees’ overall well-being and foster their growth and development.

Regulation

The Company’s operations
are subject to a variety of laws and regulations across the jurisdictions in which it operates, including the United States, the United
Arab Emirates, Sri Lanka, and other countries where it holds or exploits media and commercial rights.

International Cricket Council
(ICC) Regulations. The Company’s operations in connection with the LPL are subject to ICC requirements, guidelines, and codes
of conduct, including anti-corruption codes, anti-doping regulations, and broadcast production standards. The Event Rights Partner and/or
any of its sub-licensees and/or any Team Franchise Holder/Team Owner shall be governed by the relevant ICC requirements, guidelines and
codes of conduct and any documents with regard to such requirements, guidelines and codes of conduct are developed by SLC for the SLC,
LPL keeping in line with the relevant ICC documents on same. Team Franchise Holders/Team Owners shall not be engaged in any betting, wagering,
or similar activity and/or be involved in products such as alcohol and tobacco products as would constitute any actual or perceived conflict
with the anti-corruption codes and best practices applicable to the game of cricket in Sri Lanka.

Sri Lankan Law. The
Event Rights Agreement is governed by and construed in all aspects in accordance with the laws of Sri Lanka. Any disputes arising in relation
to the agreement shall be resolved by arbitration in accordance with the Rules of the International Chamber of Commerce in Colombo, Sri
Lanka, with proceedings conducted in English.

United Arab Emirates Law.
IPG is incorporated in the Fujairah Media Free Zone under UAE law. Effective January 1, 2024, the United Arab Emirates introduced a federal
Corporate Tax regime under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. Under this law, taxable income
exceeding the exemption threshold is subject to corporate tax at a standard rate of 9%. In accordance with Article 37 of the UAE Corporate
Tax Law, tax losses incurred in a financial year may be carried forward and utilized to offset up to 75% of the taxable income in subsequent
financial years.

Securities Regulation.
As a public company listed on the Nasdaq Capital Market, the Company is subject to the Securities Exchange Act of 1934, the Sarbanes-Oxley
Act of 2002, and the rules and regulations of the SEC and Nasdaq.

Anti-Corruption and Anti-Bribery.
The Company’s operations in multiple international jurisdictions subject it to anti-corruption and anti-bribery laws, including
the U.S. Foreign Corrupt Practices Act. The Event Rights Agreement includes specific representations and covenants by the Event Rights
Partner that it, its sub-licensees, affiliates, officers, directors, employees and agents, and the Team Franchise Holders/Team Owners
shall at all times comply with all anti-corruption and/or anti-bribery laws of Sri Lanka, the laws applicable in the whole of or any part
of the Territory, and as are or may be applicable in the performance of the agreement.

6

Betting and Gaming Regulations.
The Company licenses betting data rights in connection with LPL matches. Advertising in respect of tobacco, liquor, and gambling would
not be permitted in Sri Lanka, including any other prohibitions as stipulated by local laws and regulations and ICC from time to time.
In respect of the rest of the world, the Event Rights Partner shall ensure that the laws and regulations applicable to the countries in
which the broadcast takes place are adhered to and that ICC rules and regulations should always be complied with in respect of advertising
of tobacco, liquor, and gambling.

Legacy Operations — Controlled Environment
Agriculture

Prior to the Merger, the Company historically operated as an integrated
professional services and design-build firm offering value-added architectural, engineering, and construction management solutions to
the Controlled Environment Agriculture (“CEA”), industrial, healthcare, and other commercial sectors. After making the decision
to exit its core business sectors in the third quarter of 2025 due to changing market conditions and the Company’s inability to
raise significant funds due to its filing status and compliance with the Nasdaq, the Company began the process of selling assets, reducing
its workforce, and preparing for the Merger. The wind-down of legacy operations proceeded as follows: In mid-July 2025, the Board of Directors
commenced discussions regarding the disposition of the Services business, and on July 30, 2025 the Board voted to proceed with the sale.
On August 14, 2025, the Company entered into a non-binding letter of intent to sell substantially all of the assets of 2WR of Georgia,
Inc. On August 27, 2025, the transaction was consummated as a sale of the stock of 2WR of Georgia, Inc. On August 21, 2025, Gemini Finance
Corp. foreclosed on the assets of UG Construction, Inc. (“UG Construction”) in connection with a default under the terms of
its loan to UG Construction. On September 4, 2025, Gemini acquired the assets of UG Construction in connection with an Article 9 sale,
effectively shutting down the Construction business; all Construction assets were written off as of September 30, 2025. On November 5,
2025, the Company sold certain customer lists of 2WR of Colorado, Inc. to the same counterparty that acquired 2WR of Georgia, Inc. for
$143,000 in cash. The Company ceased operations of UG Engineering during the third/fourth quarter of 2025, effectively discontinuing all
remaining Services operations. Due to cash flow issues, the Company laid off all of its sales team, including those targeting equipment
sales, during the third quarter of 2025, resulting in virtually no equipment revenue in the fourth quarter of 2025. During the fourth
quarter of 2025, the Company wound down its remaining services businesses and furloughed those employees. The Services business was presented
as discontinued operations in the Company’s Form 10-Q for September 30, 2025, and prior period balances were reclassified for comparative
purposes in accordance with ASC 205-20.

As of December 31, 2025, the
legacy CEA business had been substantially wound down. The Company’s equipment reselling division, which historically operated as
a value-added reseller of equipment systems to the CEA sector working with a select group of manufacturers and vendor partners, generated
virtually no revenue in the fourth quarter of 2025 following the layoff of the entire sales team during the third quarter. The historical
financial results for the fiscal year ended December 31, 2025 presented elsewhere in this Report reflect the legacy urban-gro operations,
as the Merger closed subsequent to the period end on February 17, 2026. For an overview of additional developments in the business since
December 31, 2025, see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
— Subsequent Events.”

Binding Letter of Intent and Merger with Flash
Sports & Media, Inc.

On October 14, 2025, we entered
into a binding letter of intent (the “LOI”) with Flash Sports & Media, Inc. (“Flash”), led by Chief Executive
Officer Suren Ajjarapu, regarding a proposed transaction pursuant to which the parties intended to merge Flash with and into a newly formed
wholly-owned subsidiary of us, which would then merge with and into a second wholly-owned subsidiary of us (collectively, the “Merger”).
Pursuant to the LOI, Flash was valued at $180 million for purposes of the transaction. The parties agreed, subject to satisfaction of
certain conditions, to negotiate and execute a definitive merger agreement in accordance with the terms set forth in the LOI. Flash paid
us a cash deposit of $200,000 within fifteen days following the date of the LOI.

7

In connection with the Merger,
the stockholders of Flash would receive (i) unregistered shares of our common stock equal to 19.99% of the outstanding shares of common
stock as of immediately prior to the Merger, and (ii) unregistered shares of a newly-created series of non-voting preferred stock (the
“Preferred Stock”) that would be economically equivalent to common stock and would automatically convert into common stock upon
receipt of approval by our stockholders. The LOI contemplated that the former stockholders of Flash would own approximately 90% of the
resulting company following the Merger, assuming full conversion of the Preferred Stock. Upon closing of the Merger, we would change our
name to Flash Sports & Media Holdings, Inc. or a similar name, subject to stockholder approval. The Merger was completed on February
17, 2026. For further details on the terms of the Merger, see “Item 7 — Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Subsequent Events.”

Recent Developments

Gemini Loan Agreement Amendment and Default

On December 13, 2023, our
wholly-owned subsidiary UG Construction, Inc. d/b/a Emerald Construction Management, Inc. (“UG Construction”) entered into
(i) an interest only asset based revolving loan agreement (the “Loan Agreement”) with Gemini Finance Corp. (“Gemini”)
pursuant to which Gemini extended to UG Construction a secured line of credit in an amount not to exceed $10,000,000, to be used to assist
UG Construction and us with cash management, and (ii) a Secured Promissory Note - Revolving issued by UG Construction to Gemini (the “Promissory
Note”). Pursuant to the Promissory Note, each draw was due and payable on or before 180 days after such draw is funded to UG Construction,
subject to a mandatory pre-payment upon UG Construction’s receipt of payment for any invoice previously submitted and approved for
financing by Gemini.

On March 18, 2025, UG Construction
entered into an amendment to the Loan Agreement and Promissory Note and waiver with Gemini (the “Amendment”). Pursuant to
the Amendment, Gemini waived any potential or perceived events of default arising under certain circumstances, which events did not constitute
specified events of default under the Promissory Note or the Loan Agreement.

Pursuant to the Amendment,
the Promissory Note was amended to provide that (i) the term during which Gemini may consider advances under the Loan Agreement has been
extended to January 1, 2026, and (ii) the interest applied on the outstanding principal amount of the Promissory Note will accrue interest
at an annual rate of 12%, and all accrued and unpaid interest shall be paid to Gemini on the first business day of each month for the
prior month. The Amendment also amended the Loan Agreement to require monthly reporting of certain accounts receivable and to include
a covenant that such accounts receivable equal or exceed 125% of the sum of the total amount drawn down under the Promissory Note, plus
outstanding interest, as of the applicable measurement date. In connection with the execution of the Amendment, we issued to Gemini, as
an amendment fee, 150,000 shares of our common stock, or 6,000 shares after giving effect to a 1-for-25 reverse stock split.

8

On July 31, 2025, Gemini issued
a notice of default to UG Construction claiming that UG Construction was in default under the line of credit due to a failure to
submit receivables calculations and failing to maintain sufficient eligible accounts and to forward accounts receivable. The notice indicated
that the remaining outstanding amount due under the line of credit of approximately $1.76 million was immediately due and payable with
default of 1% per week accruing from the June 16, 2025 date of default claimed by Gemini, and that Gemini intended to pursue legal
action if full payment was not received by August 8, 2025.

On August 21, 2025, we received
a notification from Gemini stating that Gemini would proceed with a foreclosure and private sale of substantially all of the assets of
UG Construction in an Article 9 sale process, pursuant to Section 9601 et seq. of the California Commercial Code (the “Asset Sale”).
The Asset Sale occurred on September 4, 2025, at which Gemini acquired the assets constituting the collateral under the line of credit
for $450,000. This Gemini foreclosure event (UG Construction assets) is separate
from the August 27, 2025 Stock and Asset Purchase Agreement relating to 2WR of Georgia, Inc.; both events are components of the Company’s
broader wind-down of legacy CEA operations and are each discussed in Note 4 – Discontinued Operations. The foreclosure was a non-cash
transaction: the assets were derecognized at their carrying value, a loss on foreclosure was recognized in the consolidated statements
of operations, and the transaction is reflected as a non-cash adjustment in the consolidated statements of cash flows.

On August 29, 2025, Gemini
commenced a lawsuit captioned Gemini Finance Corp. v. UG Construction, Inc. et al., case number 25CV2259 W SBC, in the U.S.
District Court for the Southern District of California, which lawsuit (the “Lawsuit”) included us and certain of our officers
as defendants and pursuant to which Gemini claimed it was owed $1,486,189 (the “Claim Amount”).

On September 26, 2025, we
entered into a Settlement and Mutual General Release (the “Gemini Settlement Agreement”) with Gemini. Pursuant to the terms
of the Gemini Settlement Agreement, among other things, we agreed to file a joint motion requesting an expedited fairness hearing under
Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), which motion was filed on September 30,
2025. Following such fairness hearing, and subject to the satisfaction of all applicable conditions and requirements of Section 3(a)(10)
of the Securities Act, we agreed to issue to Gemini shares of our common stock that, upon sale by Gemini, would result in net proceeds
to Gemini equal to the Claim Amount, provided that Gemini shall at no time be issued shares if it would beneficially own more than 4.99%
of our common stock, and the aggregate number of shares issued to Gemini may not exceed 19.99% of our outstanding common stock as of immediately
prior to the signing of the Gemini Settlement Agreement to the extent required by Nasdaq Listing Rule 5635. Additionally, Gemini agreed
to use its best efforts to not sell common stock exceeding 10% of our daily volume on any given trading day. Upon the issuance of the
last tranche of shares under the Gemini Settlement Agreement, Gemini will dismiss the Lawsuit with prejudice. The Gemini Settlement Agreement
also included a customary mutual release of claims by the parties. The fairness hearing occurred on October 14, 2025.

Agile Term Loan

On June 26, 2025, we and certain
of our subsidiaries entered into a business loan and security agreement (the “Agile Loan Agreement”) with Agile Capital Funding,
LLC and Agile Lending LLC (together, “Agile”).

Pursuant to the Agile Loan
Agreement, Agile extended to us a term loan of $1,050,000.00 (the “Term Loan”) to be used to fund our general business requirements.
The Agile Loan Agreement is for a term of twenty-eight weeks from its effective date and includes an administrative agent fee of $50,000.00
to be remitted to Agile, which was added to the amount of the loan. We could make a full prepayment or partial prepayment of the Term
Loan, however, upon the prepayment of any principal amount, we would be obligated to pay a premium payment of principal, which would be
equal to the aggregate and actual amount of interest that would be paid through the maturity date. The Agile Loan Agreement contains standard
events of default and representations and warranties by us and Agile including a mandatory prepayment, and an additional five (5%) percent
interest rate following the occurrence of an event of default. The term loan is evidenced by a secured promissory note issued by us to
Agile. Pursuant to the Agile Loan Agreement, upon an event of default, Agile will receive a security interest in certain of our assets,
subject to certain exceptions.

9

Grow Hill Default

On October 1, 2024, we entered
into an asset-based term Loan Agreement with Grow Hill, LLC (“Grow Hill”) pursuant to which Grow Hill extended to us a secured
loan of $2,100,000 with an origination fee of $100,000, which was added to the amount of the loan. The loan is evidenced by a Secured
Promissory Note issued by us to Grow Hill. Grow Hill received a security interest in certain of our assets pursuant to a security agreement
between us and Grow Hill (the “Security Agreement”), which does not include any assets of our subsidiaries.

On October 14, 2025, we received service of process for a lawsuit filed
by Grow Hill against us in the District Court for the City and County of Denver, Colorado (Case No. 2025CV33546) alleging breach of contract
and fraud. Pursuant to the complaint, Grow Hill stated that we were in default under the Secured Promissory Note due to a failure to timely
make payments, and elected to accelerate all amounts due under the Secured Promissory Note, including a default fee equal to 1% of the
outstanding principal amount. We are currently investigating available options to resolve the complaint and intend to vigorously defend
the allegation of fraud.

As of December 31, 2025, the Company was in default under the Grow
Hill Secured Promissory Note. Monthly payments of $87,500 plus interest ceased after the April 2025 payment. The outstanding balance was
approximately $1,487,500 at December 31, 2025. Subsequent to year-end, the Company is in discussions for the Grow Hill debt to be acquired
by a third party.

The Grow Hill loan agreement contained a covenant requiring the Company
to maintain a Receivable Ratio of at least 2.00:1.00, calculated monthly. The Company failed to maintain the required ratio, which constituted
an event of default.

J Brrothers Settlement

On August 8, 2025, we entered
into a Settlement and Release Agreement (the “Settlement Agreement”) with J Brrothers LLC (“J Brrothers”) and
Herb-a-More LLC relating to a dispute arising from amounts due for certain heating, ventilation and air conditioning equipment. Pursuant
to the terms of the Settlement Agreement, among other things, we issued a promissory note to J Brrothers with an original principal amount
of $395,556 and agreed to issue 150,000 unregistered shares of our common stock, or 6,000
shares after giving effect to a 1-for-25 reverse stock split, to J Brrothers. The note accrues simple interest at an annual rate
of 12% and has a maturity date of March 18, 2026. The note must be repaid in monthly installments over a period of eight months, with
the first seven payments being $50,000 per month and the final monthly payment being $64,047. Any remaining principal and accrued but
unpaid interest will become due and payable on the maturity date, and the note may be prepaid without penalty. The note includes customary
representations and warranties, customary events of default and a 17% default interest rate.

As of December 31, 2025, the Company had made only the initial partial
payment of $25,000 on August 27, 2025. The required $50,000 monthly payments for September through December 2025 were not made. The outstanding
balance was approximately $374,512 at December 31, 2025, inclusive of accrued interest. The note matured on March 18, 2026.

2WR of Georgia Sale

On August 27, 2025, certain
of our subsidiaries entered into a Stock and Asset Purchase Agreement (the “2WR Purchase Agreement”) with 2WR Holdco, LLC
(the “Buyer”). Pursuant to the 2WR Purchase Agreement, the Buyer acquired all of the outstanding shares of stock of 2WR of
Georgia, Inc. and certain assets of our other subsidiaries relating to those entities’ business of providing commercial, industrial
and municipal architectural and construction administration services for projects not involving CEA. The purchase price paid by the Buyer
consisted of $2.0 million in cash, offset by a previous deposit of $500,000 and by any assumed indebtedness.

Nasdaq Deficiencies

On August 20, 2024, we received
a notice from The Nasdaq Stock Market LLC (“Nasdaq”) stating that because we had not yet filed our Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 2024, we were no longer in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Timely
Filing Requirement”). On November 21, 2024, we received a notice from Nasdaq stating that because we had not yet filed our Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 2024. We continued to not be in compliance with the Timely Filing Requirement.
On February 18, 2025, we filed each of our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2024 and September 30, 2024
and an amendment to our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and on February 19, 2025 we filed an amendment
to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which amendments included restated financial statements for
the periods covered therein. As a result of these filings, on February 24, 2025, the Listing Qualifications Department of Nasdaq notified
us that we had regained compliance with the Timely Filing Requirement.

On February 24, 2025, we received
a deficiency letter from Nasdaq notifying us that (i) for the last 30 consecutive business days, the bid price for our common stock had
closed at a price of below $1.00 per share, which is the minimum closing price required to maintain continued listing on the Nasdaq Capital
Market under Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”), and (ii) because our stockholder’s equity was below
$2.5 million as reported on our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024, we no longer met the minimum
stockholders’ equity requirement for continued listing on The Nasdaq Capital Market under Nasdaq Rule 5550(b)(1), requiring a minimum
stockholders’ equity of $2.5 million (the “Stockholders’ Equity Requirement”).

10

On April 16, 2025, we received
a notice from Nasdaq stating that because we had not yet filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2024
(the “Form 10-K”), we were no longer in compliance the Timely Filing Requirement. On May 21, 2025, we received a notice from
Nasdaq stating that because we had not yet filed our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2025 or our
Annual Report on Form 10-K for the fiscal year ended December 31, 2024, we continued to be out of compliance with the Timely Filing Requirement.

On August 18, 2025, we received
a determination letter from Nasdaq stating that Nasdaq had determined that we did not file the Form 10-K and the Form
10-Q by August 15, 2025, the date required for the delinquent filings by an exception previously received from Nasdaq staff. The letter
stated that, as a result, unless we timely requested an appeal, the trading of our common stock would be suspended at the opening of business
on August 27, 2025 and a Form 25-NSE will be filed with the SEC, which would remove our common stock securities from listing and registration
on Nasdaq. The letter also stated that we were not in compliance the Bid Price Rule and the Stockholders’ Equity Requirement.
We timely requested an appeal to a Nasdaq Hearings Panel (the “Panel”).

On October 14, 2025, we attended
a hearing before the Panel in connection with the determination letter. On October 30, 2025, we received a notice from Nasdaq notifying
us that the Panel had determined to grant our request to continue our listing on The Nasdaq Capital Market, conditioned on us regaining
compliance with the Timely Filing Requirement and the Stockholders’ Equity Requirement on or before December 31, 2025 and regaining
compliance with the Bid Price Rule on or before January 28, 2026. During the exception period, we are required to provide prompt notification
to the Panel of any significant event that may affect our compliance with Nasdaq requirements. Any documentation evidencing our compliance
will be subject to review by the Panel, which may, in its discretion, request additional information before determining whether we have
regained compliance.

On November 18, 2025, we received
a determination letter from Nasdaq stating that because we did not timely file our Quarterly Report on Form 10-Q for the
period ended September 30, 2025, the resulting filing delinquency would be an additional basis for delisting our securities pursuant to
the Timely Filing Requirement. The letter notified us that the Panel would consider the matter in their decision regarding our continued
listing on the Nasdaq Capital Market, and requested that we present our views with respect to the additional deficiency in writing by
November 25, 2025. We made a submission to the Panel by the requested date.

On January 6, 2026, the Company
received a determination letter (the “January 6, 2026 Determination”) from Nasdaq stating that because the Company did not
hold an annual meeting of stockholders within twelve months from the Company’s prior fiscal year end as required by Nasdaq Listing
Rule 5620(a), the resulting non-compliance would be an additional basis for delisting the Company’s securities. The January 6, 2026
Determination notified the Company that the Panel would consider the matter in their decision regarding the Company’s continued
listing on the Nasdaq Capital Market, and requested that the Company present its views with respect to the additional deficiency in writing
by January 9, 2026. The Company made a submission to the Panel by the requested date and requested an additional extension to comply with
the Bid Price Rule, the Stockholders’ Equity Requirement, and the Timely Filing Requirement.

On January 13, 2026, the Panel
notified us that it had granted a further extension to regain compliance with the Stockholders’ Equity Requirement, the Annual Meeting
Requirement, and the Timely Filing Requirement on or before February 17, 2026 and with the Bid Price Rule on or before February 24, 2026.
On January 30, 2026, we held our 2025 Annual Meeting. On February 9, 2026, we effected a 1-for-25 reverse stock split. On February 17,
2026, we completed the Merger and filed all delinquent reports. On March 4, 2026, Nasdaq confirmed we had regained compliance and placed
us on a one-year Discretionary Panel Monitor under Listing Rule 5815(d)(4)(A). Although we regained compliance, there can be no assurance
that we will maintain compliance with applicable Nasdaq Listing Rules. If we fail to meet the conditions set forth in our compliance
plan or if Nasdaq delists our securities from trading for any other reason, we could face significant material adverse consequences, including:

●
a limited availability of market quotations for our securities;

●
reduced liquidity with respect to our securities;

●
a determination that our common stock is a “penny stock” which will require brokers trading in our ordinary shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our ordinary shares;

●
a limited amount of news and analyst coverage for our company; and

●
a decreased ability to issue additional securities or obtain additional financing in the future.

Available Information

Our internet address is www.urban-gro.com
and our investor relations internet address is ir.urban-gro.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and amendments to those reports can be found on our investor relations website, free of charge, as soon as reasonably
practical after we electronically file such material with, or furnish it to, the SEC. Information contained on our website is not incorporated
by reference into this Form 10-K. The SEC maintains a public website, www.sec.gov, which contains reports, proxy and information statements,
and other information regarding issuers that that file electronically with the SEC.

11