Company: VREOF
Filing Date: 2025-03-11
Form Type: PREM14C
Source: 0001140361-25-008065
Chunk: 353

Company: Vireo Growth Inc.
Filing Date: 2025-03-11
Form: PREM14C
Chunk 353
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2024 and 2023, revenues are presented net of discounts and refunds provided to customers of $10,696,567 and $6,594,503, respectively. The Company offers a loyalty reward program to its retail customers. A portion of the revenue generated in a sale must be allocated to the loyalty points earned. The amount allocated to the points earned is deferred until the loyalty points are redeemed or expire. As of December 31, 2024 and 2023, the Company had deferred revenue of $457,695 and $273,665, respectively, due to its loyalty reward program, that is included in accrued expenses in the consolidated balance sheets. Sales Tax The Company collects from certain customers and remits to governmental agencies sales and other taxes. The Company reports the collection of these taxes on a net basis and such taxes are excluded from revenues. Income Taxes Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes due plus deferred taxes resulting from temporary differences. Such temporary differences result from differences in the carry value of assets and liabilities for tax and financial reporting purposes. The deferred taxes represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred income tax assets are reviewed periodically for recoverability, and a valuation allowance is provided when it is more likely than not that some or all of the deferred income tax assets may not be realized. Tax positions for the Company are subject to income tax audits by tax jurisdictions in the United States. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position will be sustained upon examination by the taxing authority, based on the technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in its tax provision. As the Company operates in the cannabis industry, it is subject to the limitations of the Internal Revenue Code of 1986, Section 280E, under which the Company is only allowed to deduct expenses directly related to sales of product from its taxable income. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under the Internal Revenue Code of 1986, Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income or loss. Advertising Advertising costs are expensed as incurred. Advertising