Company: VREOF
Filing Date: 2025-03-07
Form Type: PRE 14C
Source: 0001140361-25-007601
Chunk: 261

Company: Vireo Growth Inc.
Filing Date: 2025-03-07
Form: PRE 14C
Chunk 261
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, 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 Deep Roots Merger Consideration, subject to a post-closing purchase price adjustment mechanism, which Deep Roots 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”).

Proper Mergers

On December 18, 2024, Vireo entered into an Agreement and Plan of Merger (the “Proper Merger Agreement”) with Proper, NGH, and Proper MSA Newco, where pursuant to the Proper Merger Agreement, Vireo will acquire all of the issued and outstanding shares of the Proper Companies (the “Proper Mergers”) in exchange for the issuance of an estimated 178,115,850 Subordinate Voting Shares of Vireo (subject to the clawback provisions of the Proper Forfeiture Amount, as defined below), representing a value of $81,933,292 (the “Proper Merger Consideration”), plus the potential Proper EBITDA Earn-Out Shares and Proper E-Commerce Earn-Out Shares, as defined below. The number of Subordinate Voting Shares to be issued at the closing date of the Proper Mergers (the “Proper 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 Proper Mergers 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 Proper Merger Consideration in the Proper Merger Agreement, including cash, indebtedness, transaction expenses, working capital, and tax items.

At the Proper Closing Date, each share of common stock of NGH (the “NGH Common Stock”) will be converted into the right to receive, in accordance with the terms of the Proper Merger Agreement, the applicable