Company: VREOF
Filing Date: 2025-03-21
Form Type: DEFM14C
Source: 0001140361-25-009815
Chunk: 337

Company: Vireo Growth Inc.
Filing Date: 2025-03-21
Form: DEFM14C
Chunk 337
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 or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Income tax positions are assessed using a two-step process. A determination is first made as to whether it is more-likely-than-not that the income tax position will be sustained, based upon technical merits, upon the examination by tax authorities. If the income tax position is expected to meet the more-likely-than-not criteria, the benefit recorded in the consolidated financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. The Company records interest and penalties due to taxing authorities as incurred. As discussed further in Note 11, under Federal law, the Company is a taxable entity and is subject to Federal income tax. Pursuant to Section 280E of the Internal Revenue Code of 1986, as amended (“Section 280E”). The section disallows deductions and credits attributable to a trade or business of trafficking in controlled substances. Under U.S. law marijuana is a Schedule I controlled substance.

| (n) | Revenue Recognition |

Revenue is recognized by the Company in accordance with FASB Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers(Topic 606). Through application of the standard, the Company recognizes revenue to depict the transfer of promised goods or services to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. In order to recognize revenue under ASU 2014-09, the Company applies the following five (5) steps:

| • | Identify a customer along with a corresponding contract; |

| • | Identify the performance obligation(s) in the contract to transfer goods or provide distinct services to a customer; |

| • | Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods or services to a customer; |

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TABLE OF CONTENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

| • | Allocate the transaction price to the performance obligation(s) in the contract; |

| • | Recognize revenue when or as the Company satisfies the performance obligation(s). |

Revenues consist of wholesale and retail sales of cannabis, which are generally recognized at a point in time when control over the goods have been transferred to the