Company: VREOF
Filing Date: 2025-03-07
Form Type: PRE 14C
Source: 0001140361-25-007601
Chunk: 222

Company: Vireo Growth Inc.
Filing Date: 2025-03-07
Form: PRE 14C
Chunk 222
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IAL INFORMATION

#### Deep Roots Merger
On December 18, 2024, Vireo Growth Inc. (the “Company” or “Vireo”) entered into an Agreement and Plan of Merger (the “Deep Roots Merger Agreement”) with Deep Roots Holdings, Inc. (“Deep Roots”), where pursuant to the Deep Roots Merger Agreement, Vireo will acquire all of the issued and outstanding shares of Deep Roots (the “Deep Roots Merger”) in exchange for the currently estimated issuance of 245,240,000 subordinate voting shares (the “Subordinate Voting Shares”) of Vireo (subject to the clawback provisions of the Deep Roots Forfeiture Amount and Deep Roots New Retail Forfeiture Amount, as defined below), representing a value of $112,810,400 (the “Merger Consideration”), plus the potential Deep Roots Earn-Out Shares, as defined below. The number of Subordinate Voting Shares to be issued at the closing date of the Deep Roots Merger (the “Deep Roots Closing Date”) was calculated by dividing the value of the merger consideration as of December 18, 2024 by a share price reference of $0.52 for Vireo’s Subordinate Voting Shares. In general, the Merger Consideration is based upon a multiple of a $31,000,000 earnings before interest, taxes, depreciation, and amortization (“EBITDA”), adjusted for certain items as described in the definition of Merger Consideration in the Deep Roots Merger Agreement, including cash, indebtedness, transaction expenses, working capital, and tax items.

At the Deep Roots Closing Date, each share of the common stock, par value $0.001 per share, of Deep Roots (the “Deep Roots Common Stock”) will be converted into the right to receive, in accordance with the terms of the Deep Roots Merger Agreement, the applicable portion of the Merger Consideration, subject to a post-closing purchase price adjustment mechanism, which Merger Consideration will be paid via newly issued shares of the Company’s Subordinate Voting Shares at a share price of $0.52 per share. The holders of Deep Roots Common Stock will also be eligible to receive additional Subordinate Voting Shares through an earn-out mechanism based upon the EBITDA performance of Deep Roots and its subsidiaries during 2026 (the “Deep Roots Earn-Out Shares”).

The Deep Roots Merger will be accounted for as a business combination in accordance with U.S. GAAP, with management concluding