Company: VREOF
Filing Date: 2025-05-12
Form Type: 8-K
Source: 0001104659-25-047350
Chunk: 3

Company: Vireo Growth Inc.
Filing Date: 2025-05-12
Form: 8-K
Item: Item 2.01
Chunk 3
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ger in the Information Statement. The Company included
in the Closing Merger Consideration calculation an amount equal to US$11,860,800 (the “ Arches Value Amount”), which Arches
Value Amount is intended to represent the value of the issued and outstanding equity interests in Arches IP, Inc. (“ Arches”)
owned by Wholesome.

Subject to the terms and conditions of the Merger Agreement, former
Wholesome stockholders are entitled to earn-out payments based on the performance of Arches, based on the greater of US$37.5 million or
5x certain revenue percentages of Arches minus $4,000,000, with such revenue percentage amounts measured at the higher of trailing-twelve-month
or nine-month annualized amounts as of December 31, 2026, paid out using a share price for the Parent Shares at the higher of US$1.05
or 20-day volume weighted average price (“ VWAP”) ending immediately prior to December 31, 2026, which as of the Closing Date represent approximately84.72%
of the issued and outstanding equity securities of Arches.

Pursuant to the Merger Agreement, former stockholders of Wholesome
may also receive additional Parent Shares pursuant to earn-out payments based on Wholesome’s Adjusted EBITDA growth compared to
Wholesome’s Closing EBITDA (at a 4x multiple), adjusted for incremental debt and certain other matters, and paid out using a share
price for the Parent Shares of the higher of US$1.05 or the 20-day VWAP as of immediately prior to December 31, 2026. EBITDA growth is
defined as the increase between Closing EBITDA and the higher of 2026 Adjusted EBITDA or trailing nine-month annualized Adjusted EBITDA
as of December 31, 2026.

In no event shall the number of earn-out shares issued under the Merger
Agreement, in the aggregate, exceed the Closing Share Payment.

The Merger Agreement provides for the clawback of up to 50% of the
Parent Shares issued as Actual Closing Merger Consideration (excluding the Parent Shares issued as consideration for the Arches Value
Amount), if (a) 2026 Adjusted EBITDA is less than 96.5% of the Closing EBITDA (the amount of such shortfall, the “ EBITDA Deficiency”),
and (b) retail