Company: VREOF
Filing Date: 2025-03-11
Form Type: PREM14C
Source: 0001140361-25-008065
Chunk: 256

Company: Vireo Growth Inc.
Filing Date: 2025-03-11
Form: PREM14C
Chunk 256
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, 2026 is greater than $1.05 per Subordinate Voting Share.

In the event that the foregoing occurs, the Proper Share Recipients will be required to forfeit an aggregate number of Subordinate Voting Shares to the Company equal to the Proper Forfeiture Amount (as defined below) divided by the closing share price of $0.52, with such forfeited shares capped at fifty percent (50%) of the total Subordinate Voting Shares issued as Proper Actual Closing Merger Consideration (excluding for this purpose any Subordinate Voting Shares issued as consideration for the Proper Arches Shares) (the “Proper Forfeiture Shares”). The Proper Forfeiture Amount will be calculated as an amount equal to the sum of (i) the product of the Proper acquisition multiple multiplied by the Proper EBITDA Deficiency, plus (ii) the aggregate amount of any indebtedness for borrowed money incurred by the Proper Companies or their subsidiaries after the Proper Closing Date, minus (iii) the amount of any cash remaining in the Proper member representative expense fund, and minus (iv) certain tax refund amounts held for the benefit of the Proper Share Recipients pursuant to the Proper Merger Agreement.

The accounting treatment of the Proper Earn-Out Shares and potential forfeitures related to the Proper Forfeiture Shares are expected to be recognized at fair value upon the closing of the Proper Mergers. The Company expects to finalize its assessment of the accounting treatment upon consummation of the transaction. If the Proper Earn-Out Shares and potential forfeitures related to the Proper Forfeiture Shares are determined to be classified as a liability and/or an asset on the balance sheet, then Vireo would recognize subsequent changes in the fair value of such items as a gain or loss at each reporting period during the Proper Earn-Out Period, pursuant to the provisions of ASC Topic 815, Derivatives and Hedging .

Identifiable Net Assets Acquired

In connection with the Proper Mergers, the Company will recognize $5,840,520 of identifiable intangible assets pertaining to certain cannabis licenses being acquired in the acquisition of the Proper Companies and $51,595,613 of additional acquired intangible assets (excluding the cannabis licenses) and goodwill, which represents the excess purchase price over fair value of identifiable net assets acquired, pursuant to the preliminary purchase price allocation. Goodwill will not be amortized, but instead will be tested for impairment at least annually or more frequently if certain indicators are present. In the event that the value of goodwill or other intangible assets become