FLZH

RISK FACTORS An investment in our securities involves a high degree of risk.
You should carefully consider the risks described below, together with all of the other information included in this Report, before making an investment decision.
If any of the following risks actually occurs, our business, financial condition, or results of operations could suffer materially.
In such case, the trading price of our common stock could decline, and you may lose all or part of your investment.
Risks Related to Our Business and Operations We have a limited operating history under the Flash Sports & Media platform and may not be able to successfully execute our business plan.
The Company completed the Merger with Flash on February 17, 2026.
Flash was incorporated on August 7, 2023 and had not generated any revenue prior to the Merger.
While IPG, which is now a wholly owned subsidiary of Flash and therefore of the Company, has generated revenue from cricket-related operations since 2020, the combined entity has a limited operating history as a publicly traded sports and media company.
There can be no assurance that we will be able to successfully integrate the operations of Flash, IPG, and the Company, or that we will achieve profitability.
Our prospects must be considered in light of the risks and uncertainties encountered by companies in the early stages of development in rapidly evolving markets.
We are substantially dependent on a single contractual relationship with Sri Lanka Cricket for a significant majority of our revenue.
Substantially all of IPG’s revenue is derived from the commercialization of rights granted under the Master Event Rights Agreement with SLC for the Lanka Premier League.
The loss, non-renewal, or material modification of this agreement would have a material adverse effect on our business, financial condition, and results of operations.
The Event Rights Agreement requires annual payment of an Event Rights Fee or provision of a bank guarantee by March 15 of each year; failure to make timely payment could result in termination of the Company’s rights for that year.
Although the agreement provides for automatic one-year renewals, IPG’s rights must be secured annually, and there can be no assurance that the agreement will be renewed on favorable terms, or at all.
We have a going concern qualification and a history of net losses and accumulated deficits.
Both IPG and Flash have received going concern qualifications from their respective auditors.
As of December 31, 2024, IPG had an accumulated deficit of approximately $4.6 million and a working capital deficit of approximately $1.9 million.
Flash had an accumulated deficit of $500,000 as of December 31, 2024 and had never generated revenue.
The Company (legacy urban-gro) had an accumulated deficit of approximately $120.6 million and a stockholders’ deficit of approximately $40.9 million as of December 31, 2025.
There can be no assurance that the combined entity will achieve or sustain profitability.
Our revenue is concentrated among a limited number of customers and geographies.
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.
In 2023, sales to four customers individually exceeded 10% of IPG’s total revenue, collectively representing approximately 53% of total revenue.
The loss of any significant customer or a significant reduction in business from Sri Lanka or Zimbabwe could have a material adverse effect on our financial performance.
The Company continues to focus on efforts to diversify its customer base to mitigate such risks.
Our business is dependent on the continued popularity and growth of cricket, particularly T20 cricket, in our target markets.
Our revenue is substantially derived from the commercialization of T20 cricket league rights.
Any decline in the popularity of cricket or T20 cricket in Sri Lanka, or in international markets where we distribute media content, could reduce demand for media rights, sponsorships, franchise ownership, and ticketing, which would materially and adversely affect our business, financial condition, and results of operations.
We are subject to risks associated with international operations.
The Company conducts operations in the United Arab Emirates, Sri Lanka, Zimbabwe, and other international markets, and is subject to risks inherent in international operations, including political and economic instability, currency fluctuation risk, regulatory uncertainty, foreign tax regimes (including the recently enacted UAE Corporate Tax), sanctions and trade restrictions, cultural and legal differences, and challenges in enforcing contractual rights across jurisdictions.
Any of these factors could materially and adversely affect our operations and financial results.
We depend on key personnel, including the founder and chairman of IPG.
The Company’s success depends in significant part on the continued services and leadership of key individuals, including Anil Mohan Sankhdhar, the founder and chairman of IPG, who has been instrumental in building the Company’s relationships with SLC, franchise owners, sponsors, and broadcast partners, and Bradley Nattrass, the Company’s Chairman and Chief Executive Officer.
The loss of any of these individuals’ services could have a material adverse effect on our business and operations.
We do not currently maintain key-person life insurance on any of our executives.
Force majeure events, including pandemics, natural disasters, terrorism, and political unrest, could disrupt our tournament operations.
The LPL and our other cricket events are live, in-person sporting events that are subject to disruption or cancellation due to force majeure events.
Under the Event Rights Agreement, the full Event Rights Fee remains payable by the Event Rights Partner to SLC even if the whole or any part of the Tournament is curtailed, cancelled, or abandoned due to any Force Majeure event, after the date of commencement of the Tournament.
Force Majeure events include, but are not limited to, acts of God, war, riot, strike, civil commotion, terrorism, pandemics, epidemics, fire, earthquake, storm, flood, tsunami, explosion, and acts of Government.

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Gone since FY2024

RISK FACTORS An investment in our common stock involves a high degree of risk.
You should carefully consider the following risks and all of the other information contained in this report before deciding whether to invest in our common stock.
If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected.
In that event, the trading price of our common stock could decline and you could lose all or part of your investment in our common stock.
Additional risks of which we are not presently aware or that we currently believe are immaterial may also harm our business and results of operations.
Some statements in this report, including such statements in the following risk factors, constitute forward-looking statements.
See the section entitled Cautionary Information about Forward-Looking Statements in Part I of this Report.
Risks Related to Our Operations We have a relatively limited history of operations, a history of losses, and our future earnings, if any, and cash flows may be volatile, resulting in uncertainty about our prospects generally.
We were initially organized as a limited liability company in the State of Colorado on March 20, 2014.
In March 2017, we converted into a corporation and on February 12, 2021, we completed an uplisting to Nasdaq under the ticker symbol “UGRO.” The following is a summary of our recent historical operating performance: ● During the year ended December 31, 2024, we generated revenue of $40.0 million and incurred a net loss of $36.5 million. ● During the year ended December 31, 2023, we generated revenue of $69.9 million and incurred a net loss of $25.4 million. ● During the year ended December 31, 2022, we generated revenue of $66.3 million and incurred a net loss of $15.3 million. ● During the year ended December 31, 2021, we generated revenue of $62.1 million and incurred a net loss of $0.9 million. ● During the year ended December 31, 2020, we generated revenue of $25.8 million and incurred a net loss of $5.1 million.
Our lack of a significant history and the evolving nature of the market in which we operate make it likely that there are risks inherent to our business that are yet to be recognized by us or others, or not fully appreciated, and that could result in us suffering further losses.
As a result of the foregoing, an investment in our securities necessarily involves uncertainty about the stability of our operating results, cash flows and, ultimately, our prospects generally.
We had negative cash flow from operations for the fiscal years ended December 31, 2024 and December 31, 2023.
We had negative cash flow from operations of $2.8 million for the fiscal year ended December 31, 2024 and $10.5 million for the fiscal year ended December 31, 2023.
Our architecture, engineering, design, and construction management services have been used and may continue to be contracted for use in emerging industries that may be subject to quickly changing and inconsistent laws, regulations, practices and perceptions.
Although the demand for our architecture, engineering, design, and construction management services may be negatively impacted depending on how laws, regulations, administrative practices, judicial interpretations, and consumer perceptions develop, we cannot reasonably predict the nature of such developments or the effect, if any, that such developments could have on our business.
We will continue to encounter risks and uncertainty relating to our operations that may be difficult to overcome.
To the extent that future net losses are in excess of additions to equity, we may fall below the Nasdaq’s listing requirement of having a net equity balance of at least $2,500,000.
If we fail to continue to satisfy this or any other continued listing requirements, Nasdaq will take steps to delist our common stock.
Such a delisting would likely have a negative effect on the price of our common stock and would impair shareholders’ ability to sell or purchase our common stock when they wish to do so, as well as adversely affect our ability to issue additional securities and obtain additional financing in the future.
We may become subject to additional regulation of CEA facilities.
Our engineering and design services are focused on facilities that grow a wide variety of crops that are subject to regulation by the United States Food and Drug Administration and other federal, state or foreign agencies.
Changes to any regulations and laws that could complicate the engineering of these CEA facilities, such as waste water treatment and electricity-related mandates, make it possible that potential related enforcement could decrease the demand for our services, and in turn negatively impact our revenues and business opportunities.
Competition in the various sectors in which we operate is intense.
There are many competitors in the industries in which we operate, including many who offer somewhat categorically similar professional services and equipment solutions as those offered by us.
In the future other companies may enter this arena by developing solutions that directly compete with us.
We anticipate the presence as well as entry of other companies in this market space and acknowledge that we may not be able to establish, or if established to maintain, a competitive advantage.
Some of these companies have longer operating histories, greater name recognition, larger client bases and significantly greater financial, technical, sales and marketing resources.
This may allow them to respond more quickly than us to market opportunities.
It may also allow them to devote greater resources to the marketing, promotion and sale of their products and/or services.
These competitors may also adopt more aggressive pricing policies and make more attractive offers to existing and potential clients, employees, strategic partners, distribution channels and advertisers.
Increased competition is likely to result in price reductions, reduced gross margins and a potential loss of market share.
We depend upon third-party suppliers for the equipment solutions that we sell.
We depend on outside manufacturers for the equipment solutions that we sell.
While we believe that there are sufficient sources of supply available, if the third-party suppliers were to cease production or otherwise fail to supply us with products in sufficient quantities on a timely basis and we were unable to contract on acceptable terms for these equipment type products with alternative suppliers, our ability to sell these solutions would be materially adversely affected.
If a sole source supplier was to go out of business, we may be unable to find a replacement for such source in a timely manner or at all.
If a sole source supplier were to be acquired by a competitor, that competitor may elect not to sell to us in the future.
Any inability to secure required products or to do so on appropriate terms could have a materially adverse impact on the business, financial condition, results of operations or prospects of urban-gro.
We have historically depended on a small number of clients for a substantial portion of our revenue.
If we fail to retain or expand our client relationships, or if a significant client were to terminate its relationship with us or reduce its purchases, our revenue could decline significantly.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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