Company: VREOF
Filing Date: 2025-03-21
Form Type: DEFM14C
Source: 0001140361-25-009815
Chunk: 365

Company: Vireo Growth Inc.
Filing Date: 2025-03-21
Form: DEFM14C
Chunk 365
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 use of the Arches software platform the conversion price will ratchet down to $0.501785, $0.457923, $0.387743, and $0.334076 depending on the level of increase in accretive market share revenue. The Company determined this conversion feature is a derivative liability within the scope of ASC 815, Derivatives and Hedging; however, as of December 31, 2024, the Company determined it had an immaterial value. Downround Protection – Arches Preferred Stock The certificate of incorporation for Arches provides that if Arches sells common stock at a price that is lower than any of current conversion prices of the Series Preferred stock, then the conversion price will be reduced to a price based upon a broad-based weighted average formula in the Arches’ Certificate of Incorporation. This feature is frequently referred to as “down-round protection.” The Company has determined this embedded conversion option is more akin to equity and has not recorded a liability for the instrument as of December 31, 2024.

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TABLE OF CONTENTS

Stock Options WholesomeCo Equity Incentive Plan The WholesomeCo 2020 Equity Incentive Plan (the Plan) includes incentive stock options, nonqualified stock options, restricted stock and restricted stock units (collectively, Awards) to be granted to employees, consultants and directors of the Company. A total of 2,179,282 shares have been authorized for issuance under this Plan and 433,896 shares remain available to be issued under the Plan. The exercise price of the Awards is determined by the Company’s board of directors or committee of nonemployee directors thereof in good faith. The granting of shares and exercise price must be approved by the Company’s board of directors. In general, the Awards vest over a period of approximately four years and expire 10 years from the date of grant. The fair value of each option grant is estimated on the date of grant using the Black Scholes option pricing model. Since the Company does not have sufficient historical data on the volatility of its stock, the expected volatility is based on the volatility of similar entities (referred to as guideline companies). In evaluating similarity, the Company considered factors such as industry, stage of life cycle, size and financial leverage. The expected term of a stock option is the period of time for which the option is expected to be outstanding. The Company used the simplified method as the expected term of the grants. The risk-free rate is based on the U.S