What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-17 compared with 2025-03-04 · 581 added, 347 removed, 751 unchanged (55% of the section changed)

Financial Statements and Supplementary Data

Financial Statements and Sup plementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 731 )

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Directors of

Vireo Growth Inc.

(formerly “Goodness Growth Holdings, Inc.”)

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Vireo Growth Inc.

(formerly “Goodness Growth Holdings, Inc.”) (the “Company”), as of December 31, 2024 and 2023, and the related consolidated statements of net loss and comprehensive loss, stockholders’ equity (deficiency), and cash flows for the years ended December 31, 2024 and 2023, and the related notes and schedules (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Vireo Growth Inc.

as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years ended December 31, 2024 and 2023 in conformity with accounting principles generally accepted in the United States of America.

and its subsidiaries (the “Company”), as of December 31, 2025 and 2024, and the related consolidated statements of net loss and comprehensive loss, stockholders’ equity , and cash flows for the years ended December 31, 2025, and 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025, and 2024 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

8 unchanged sentences

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatements of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

3 unchanged sentences

/s/ DAVIDSON & COMPANY LLP

Vancouver, Canada

Chartered Professional Accountants

Vancouver, Canada

March 17, 2026

DAVIDSON & COMPANY LLP

1200–609 Granville Street

PO BOX 10372, Pacific Centre

Vancouver, BC V7Y 1G6

davidson-co.com

VIREO GROWTH INC.

Consolidated Balance Sheets (In U.S Dollars)

Consolidated Balance Sheets (In U.S.

Current assets:

Restricted Cash

Marketable Securities

Accounts receivable, net of credit losses of $ 1,266,965 and $ 244,264 , respectively

1 unchanged sentence

Prepayments and other current assets

Notes receivable, current

Warrants held

Notes receivable

Assets held for sale

3 unchanged sentences

Intangible assets, net

Indemnified tax assets

Current liabilities

Accounts payable and accrued liabilities

Convertible debt, current portion

Long-term debt, current portion

Right of use liability

Right of use liability, current

Uncertain tax liability

Derivative liability

Liabilities held for sale

1 unchanged sentence

Right-of-use liability

Other long-term liabilities

Convertible debt, net

Long-term debt, net

Convertible debt, net

Contingent consideration

Deferred tax liabilities

Other long-term liabilities

Total liabilities

Commitments and contingencies (refer to Note 18)

Stockholders’ equity (deficiency)

Commitments and contingencies

Stockholders’ equity

Subordinate Voting Shares ($- par value, unlimited shares authorized;

6 unchanged sentences

( 231,435,561 )

Total stockholders' equity (deficiency)

( 16,043,649 )

Total liabilities and stockholders' equity (deficiency)

Total stockholders' equity

Total liabilities and stockholders' equity

The accompanying notes are an integral part of these consolidated financial statements

2 unchanged sentences

Dollars, except per share amounts)

For the Years Ended December 31,

Cost of sales

Product costs

Non-cash product costs

Inventory valuation adjustments

4 unchanged sentences

Total operating expenses

Income from operations

Income (loss) from operations

( 1,048,483 )

Other income (expense):

2 unchanged sentences

( 16,966,678 )

Interest expense on finance lease liabilities - Minnesota & New York

( 14,348,831 )

( 14,222,167 )

Impairment of long-lived assets

Gain (loss) on disposal of assets

( 2,600,000 )

Gain (loss) on disposal of assets and debt

( 7,866,997 )

Gain (loss) on change in the fair value of contingent consideration

( 9,617,000 )

Derivative gain (loss)

Other income (expenses)

5 unchanged sentences

( 16,894,509 )

Deferred income tax recoveries (expenses)

Current income tax expenses

1 unchanged sentence

( 11,113,000 )

Deferred income tax recoveries

( 1,687,000 )

Net loss and comprehensive loss

5 unchanged sentences

VIREO GROWTH INC.

Consolidated Statements of Stockholders’ Equity (Deficiency)

Consolidated Statements of Stockholders’ Equity

Dollars, except per share amounts)

Super Voting Shares

Additional Paid-

Stockholders'

Equity (deficiency)

Balance, January 1, 2024

( 203,428,052 )

( 16,043,649 )

Conversion of MVS shares

Conversion of Super Voting Shares

Stock-based compensation

Warrants issued in financing activities

Stock issuance

Net settlement of stock-based compensation

Options exercised

Warrants exercised

Shares issued in financing activities

Shares issued in private placement

Conversion of convertible debt

( 28,007,509 )

2 unchanged sentences

( 231,435,561 )

( 16,043,649 )

Balance, January 1, 2025

( 231,435,561 )

( 16,043,649 )

Conversion of MVS shares

Stock-based compensation

Stock issuance

Shares issued

Net settlement of stock-based compensation

( 8,951,207 )

( 5,717,000 )

Options exercised

Warrants exercised

Shares issued in financing activities

Shares issued in private placement

Conversion of convertible debt

Shares issued in connection with Wholesome acquisition

Shares issued in connection with the Proper acquisition

Shares issued in connection with the Deep Roots acquisition

Shares issued in connection with the acquisition of notes receivable

( 68,113,908 )

2 unchanged sentences

1,057,131,571

( 299,549,469 )

The accompanying notes are an integral part of these consolidated financial statements

1 unchanged sentence

Consolidated Statements of Cash Flows

For the Years Ended December 31,

Year Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES

2 unchanged sentences

Adjustments to reconcile net loss to net cash used in operating activities:

Non-cash amortization of inventory step up included in product costs

Inventory valuation adjustments

5 unchanged sentences

Warrants held

( 1,937,352 )

Derivative (gain) loss

Loss on extinguishment of debt

Loss on impairment of long-lived assets

Interest Expense

Bad debt expense

Impairment of long-lived assets

Deferred income tax

Accretion of interest on right-of-use finance lease liabilities

Loss on disposal of Red Barn Growers

(Gain) loss on change in the fair value of contingent consideration

Non-cash gain on legal settlement

( 8,172,587 )

Loss (gain) on disposal of assets

2 unchanged sentences

( 6,063,868 )

( 1,030,224 )

Prepaid expenses

1 unchanged sentence

( 2,391,818 )

Purchase of marketable securities

( 1,020,243 )

Deferred income tax expense (benefit)

( 13,406,000 )

Uncertain tax position liabilities

8 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES:

PP&E Additions

Purchases of property, plant, and equipment

( 28,324,056 )

1 unchanged sentence

Proceeds from note receivable

Intangible license additions

Acquisition of WholesomeCo, Inc., net of cash paid

Acquisition of Deep Roots Holdings, Inc., net of cash paid

Acquisition of Proper Holdings Management, Inc., net of cash paid

Capitalized software development costs

( 1,492,617 )

Proceeds from sale of Red Barn Growers net of cash

Proceeds from sale of property, plant, and equipment

Net cash provided by (used in) investing activities

Proceeds from sale of assets held for sale

( 1,033,646 )

Net cash provided by (used in) investing activities

( 8,132,566 )

11 unchanged sentences

Net change in cash

Cash, beginning of year

Cash, end of year

Cash and restricted cash, beginning of period

Cash and restricted cash, end of period

The accompanying notes are an integral part of these consolidated financial statements.

5 unchanged sentences

Vireo Growth Inc.

(“ Vireo Growth ” or the “ Company ”) (formerly, Goodness Growth Holdings, Inc.

) was incorporated under the Alberta Business Corporations Act on November 23, 2004.

The Company was previously listed on the Canadian Securities Exchange (the “ CSE ”) under ticker symbol “GDNS”.

On July 8, 2024, the Company changed its name to Vireo Growth Inc., its ticker symbol on the CSE to “VREO” and its ticker symbol on the OTCQX to “VREOF.”

Vireo Growth is a cannabis company whose mission is to provide safe access, quality products and value to its customers while supporting its local communities through active participation and restorative justice programs.

Vireo Growth operates cannabis cultivation, production, and dispensary facilities in Maryland, Minnesota, and New York, and formerly in New Mexico.

(“ Vireo Growth ” or the “ Company ”) was incorporated under the Alberta Business Corporations Act on November 23, 2004, and continued under the British Columbia Corporations Act on December 9, 2013.

The Company's subordinate voting shares are listed on the Canadian Securities Exchange (the “ CSE ”) and quoted on the OTCQX under the ticker symbols “VREO” and “VREOF”, respectively.

Vireo Growth was founded in 2014 as a medical cannabis company and has since developed a disciplined, strategically aligned platform within the cannabis industry.

The Company’s mission is to provide safe access, quality products, and value to its customers.

Vireo Growth operates cultivation, production, and dispensary facilities in Maryland, Minnesota, Missouri, Nevada, New York, and Utah.

The Company allocates capital and talent to areas expected to generate long-term value and operates with a commitment to accountability, efficiency, and its stakeholders, including customers, employees, shareholders, and the communities it serves.

While marijuana and CBD-infused products are legal under the laws of several U.S.

states (with vastly differing restrictions), the United States Federal Controlled Substances Act classifies all “marijuana” as a Schedule I drug.

federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of safety for the use of the drug under medical supervision.

Recently some federal officials have attempted to distinguish between medical cannabis use as necessary, but adult-use as “still a violation of federal law.” At the present time, the distinction between “medical marijuana” and “adult-use marijuana” does not exist under U.S.

Update on Verano Litigation (Note 18)

On October 21, 2022, Vireo Growth commenced an action in the Supreme Court of British Columbia against Verano Holdings Corp.

(" Verano ") after Verano repudiated the Arrangement Agreement with the Company dated January 31, 2022.

The Company is seeking damages, costs and interest, based on Verano's breach of contract and of its duty of good faith and honest performance.

On May 2, 2024, the Company filed an application with the Supreme Court of British Columbia for summary determination.

The Company is seeking substantial damages, specifically $ 860.9 million, as well as other costs and legal fees, based on Verano’s breach of contract and of its duty of good faith and honest performance.

Due to uncertainties inherent in litigation, it is not possible for Vireo Growth to predict the timing or final outcome of the legal proceedings against Verano or to determine the amount of damages, if any, that may be awarded.

states (with vastly differing restrictions), the United States Federal Controlled Substances Act (the “ CSA ”) classifies all “marijuana” as a Schedule I drug.

federal law, a Schedule I drug or substance has a high potential for abuse, has no accepted medical use in the United States, and lacks accepted safety for use under medical supervision.

Recent federal pronouncements regarding rescheduling implicitly acknowledge the distinction between medical cannabis and adult-use cannabis by indicating that medical cannabis as an accepted use for treating certain conditions while making no indications about adult-use cannabis.

At the present time, the distinction between “medical marijuana” and “adult-use marijuana” does not exist under black letter U.S.

On May 16, 2024, the Drug Enforcement Administration (“ DEA ”) issued a Notice of Proposed Rulemaking (“ NPRM ”) to reschedule marijuana from Schedule I to Schedule III under the CSA.

Following the NPRM, the DEA received tens of thousands of comments, and as of this filing, an administrative hearing on the rulemaking remains pending.

On December 18, 2025, President Trump issued an executive order directing the DOJ to move forward with rescheduling marijuana to Schedule III as quickly as possible, consistent with federal law.

In the wake of the recent executive order, it still remains to be seen whether the administration will continue the process initiated by the 2024 NPRM or issue a new NPRM altogether.

Rescheduling to Schedule III would not automatically deem state cannabis regimes federally compliant.

Following rescheduling, the CSA’s restrictions would still apply to dealing in cannabis as a Schedule III substance, albeit with reduced potential penalties relative to dealing in a Schedule I substance.

Rescheduling would also allow a potential pathway to federally legal medical marijuana, although this would require approval by the FDA of cannabis and cannabis-derived products, as well as alignment of state regimes with federal requirements.

Importantly, however, rescheduling to Schedule III should allow cannabis companies to deduct ordinary and necessary business expenses in the same manner currently allowed for other industries.

Under Section 280E of the U.S.

Internal Revenue Code, tax deductions and credits are disallowed for amounts paid or incurred in carrying on any business that consists of trafficking in Schedule I or II controlled substances.

Rescheduling would, therefore, represent a meaning opportunity for federal tax relief.

Merger Agreements with Deep Roots, Proper and Wholesome

On December 18, 2024, we entered into the Merger Agreements with respect the Mergers.

Each Merger is an all-share transaction whereby, at the closing of each applicable transaction, (i) a new wholly-owned subsidiary of the Company would merge with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company would merge with and into Wholesome, and (ii) the Proper entities would each merge with and into new wholly-owned subsidiaries of the Company.

None of the Deep Roots Merger, the Proper Mergers or the Wholesome Merger is contingent on the completion of any of the other Mergers (Note 3).

On December 18, 2024, the Company entered into merger agreements (each a “ Merger Agreement ” and collectively, the “ Merger Agreements ”) with each of (i) Deep Roots Holdings, Inc.

(“ Deep Roots ”) (the “ Deep Roots Merger ”), (ii) Proper Holdings, LLC (“ Proper ”), NGH Investments, Inc.

(“ NGH ”), and Proper Holdings Management, Inc.

(“ Proper MSA Newco ” and together with NGH, the “ Proper Companies ”) (the “ Proper Mergers ”), and (iii) WholesomeCo, Inc.

(“ Wholesome ”) (the “ Wholesome Merger ” and collectively with the Deep Roots Merger and

the Proper Mergers, the “ Mergers ” and each, a “ Merger ”) .

Each Merger was an all-share transaction whereby, at the closing of each Merger, (i) a new wholly-owned subsidiary of the Company merged with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company merged with and into Wholesome, and (iii) the Proper Companies each merged with and into new wholly-owned subsidiaries of the Company.

Each of the Deep Roots Merger, the Proper Mergers and Wholesome Merger closed during the year ended December 31, 2025.

See Note 3 “Business Combinations and Dispositions” for additional information.

Summary of Significant Accounting Policies

4 unchanged sentences

These consolidated financial statements reflect all adjustments, which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of operations.

These financial statements were approved and authorized for issuance by the Board of Directors on March 17, 2026.

Basis of consolidation

4 unchanged sentences

Maryland, USA

Mayflower Botanicals, Inc.

Massachusetts, USA

Vireo Health of Minnesota, LLC

4 unchanged sentences

Delaware, USA

Verdant Grove, Inc.

Massachusetts, USA

Vireo Health de Puerto Rico, Inc.

Vireo Health of Nevada 1, LLC

Verdant Grove, LLC

Delaware, USA

Vireo Health de Puerto Rico, LLC

CO Acquisition Vehicle, LLC

Delaware, USA

Vireo Health of Rocky Mountain, LLC

Colorado, USA

Vireo Health of CO, LLC

Colorado, USA

Vireo Health of CO II, LLC

Delaware, USA

Vireo Health of Denver Metro, LLC

Delaware, USA

Vireo Health of DTC, LLC

Delaware, USA

Vireo Health of Foothills, LLC

Delaware, USA

Vireo Health of Las Cruces, LLC

Delaware, USA

Vireo Health of Mile High, LLC

Delaware, USA

Vireo Health of NM, LLC

Delaware, USA

Vireo Health of Noco, LLC

Delaware, USA

Vireo Health of Santa Fe, LLC

Delaware, USA

Vireo Health of Soco, LLC

Delaware, USA

Vireo Health of Western Slope, LLC

Delaware, USA

Retail Management Associates, LLC

Vireo Health of Nevada I, LLC

Vireo Health of New York, LLC

4 unchanged sentences

Delaware, USA

Vireo of Charm City, LLC

Maryland, USA

Vireo DR Merger Sub Inc.

Vireo Health of Arcadia, LLC

Delaware, USA

Vireo WH Merger Sub Inc.

200 W 24th Holdings, LLC

Delaware, USA

Vireo of Charm City, LLC

Maryland, USA

Vireo PR Merger Sub Inc.

Delaware, USA

Missouri, USA

Vireo PR Merger Sub II Inc.

Missouri, USA

Deep Roots Holdings, Inc.

WholesomeCo, Inc.

Delaware, USA

XAAS Agro, Inc.

New Growth Horizon, LLC

Missouri, USA

Nirvana Investments, LLC and Subsidiaries

Missouri, USA

2178 State Highway 29A LLC

New York, USA

Vireo Marketing, LLC

Minnesota, USA

Deep Roots Harvest, Inc.

Deep Roots Aria AcqCo, Inc.

Deep Roots Operating, Inc.

Deep Roots Properties, LLC

WC Staffing, LLC

Wholesome Goods, LLC

Wholesome Ag, LLC

Wholesome Direct, LLC

Wholesome Therapy, LLC

Arches IP, Inc.

Delaware, USA

The entities listed above are wholly owned or effectively controlled by the Company and have been formed or acquired to support the intended operations of the Company and all intercompany transactions and balances have been eliminated in the consolidated financial statements of the Company.

During the year ended December 31, 2023, Red Barn Growers, Inc.

was removed as a result of a business disposition.

Refer to Note 3 for further details on business dispositions.

Recently adopted accounting pronouncements

ASU 2023-07 In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2023-07, Improvements to Reportable Segment Disclosures (Topic 280) .

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted the standard on January 1, 2024.

This ASU resulted in additional required disclosures (Note 21).

ASU 2023-09 In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740) .

The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024.

The adoption of this ASU resulted in additional disclosures in Footnote 21.

Use of estimates and significant judgments

52 unchanged sentences

The Company operates in one business segment, namely as the Cannabis segment that cultivates, processes and distributes medical and adult-use cannabis products in a variety of formats, as well as related accessories.

The Company’s Chief Executive Officer is the Company’s chief operating decision maker.

The Company’s Chief Executive Officer is the Company’s Chief Operating Decision Maker (“ CODM ”).

Cash is comprised of cash.

3 unchanged sentences

Any excess of the purchase consideration over the net fair value of tangible and identified intangible assets acquired less liabilities assumed is recorded as goodwill.

The costs of business acquisitions, including fees for accounting, legal, professional consulting and valuation specialists, are expensed as incurred within acquisition-related (income) expenses, net.

The costs of business acquisitions, including fees for accounting, legal, professional consulting and valuation specialists, are expensed as incurred within transaction related expenses.

Purchase price allocations may be preliminary and, during the measurement period not to exceed one year from the date of acquisition, changes in assumptions and estimates that result in adjustments to the fair value of assets acquired and liabilities assumed are recorded in the period the adjustments are determined.

1 unchanged sentence

Fair value measurements

The carrying value of the Company’s accounts receivable, deposits, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of notes receivable, convertible debt, and long-term debt approximates fair value as they bear a market rate of interest.

The carrying value of the Company’s marketable securities, accounts receivable, notes receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of long-term debt, and convertible debt approximates fair value as they bear a market rate of interest.

Restricted cash consists of cash balances that are legally or contractually restricted as to withdrawal or use.

The carrying amount approximates fair value due to the short-term nature of the deposits.

The carrying value of the Company’s derivative liabilities utilize Level 2 inputs given the inputs are indirectly observable but not quoted for identical contracts.

The carrying value of the Company’s warrants held, contingent consideration, and investments utilize Level 3 inputs given there is no market activity for the asset.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

Inventory and cost of sales

Inventory is comprised of cannabis work-in-process, cannabis finished goods and other inventory.

10 unchanged sentences

Actual inventory losses may differ from management’s estimates and such differences could be material to the Company’s balance sheets, statements of net loss and comprehensive loss and statements of cash flows.

Cost of sales represents costs directly related to manufacturing and distribution of the Company’s products.

Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling and the depreciation of manufacturing equipment and production facilities.

Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and property taxes.

Cost of sales also includes inventory valuation adjustments.

The Company recognizes the cost of sales as the associated revenues are recognized.

Property and equipment

28 unchanged sentences

In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available (“ asset group ”).

An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group.

A potential impairment loss is assessed when the sum of projected undiscounted cash flows is less than the carrying value of the asset group.

The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group.

17 unchanged sentences

Impairment of financial assets

Financial assets classified subsequently as amortized cost are subject to impairment based on the expected credit losses (“ECL's”).

Financial assets classified subsequently as amortized cost are subject to impairment based on the expected credit losses (“ ECLs ”).

The Company's financial assets subject to impairment are cash, accounts receivable and notes receivable.

14 unchanged sentences

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

ROU assets are classified as a finance lease or an operating lease.

ROU assets are classified as a finance lease or an

operating lease.

A finance lease is a lease in which 1) ownership of the property transfers to the lessee by the end of the lease term;

5 unchanged sentences

ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate is used based

on the information available at commencement date in determining the present value of lease payments.

As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments.

The Company uses the implicit rate when readily determinable.

18 unchanged sentences

Upon repurchase of convertible debt instruments, ASC 470-20 requires the issuer to allocate total settlement consideration, inclusive of transaction costs, amongst the liability and equity components of the instrument based on the fair value of the liability component immediately prior to repurchase.

The difference between the settlement consideration allocated to the liability component and the net carrying value of the liability component, including unamortized debt issuance costs, would be recognized as gain (loss) on extinguishment of debt in the statements of net loss and comprehensive loss.

The remaining settlement consideration allocated to the equity component would be recognized as a reduction of additional paid-in capital in the balance sheets.

The difference between the settlement consideration allocated to the liability component and the net carrying value of the liability component, including unamortized debt issuance costs, is

recognized as gain (loss) on extinguishment of debt in the statements of net loss and comprehensive loss.

The remaining settlement consideration allocated to the equity component is recognized as a reduction of additional paid-in capital in the balance sheets.

During the year ended December 31, 2025, the Company issued convertible debt (Note 14).

It was determined that the debt should be accounted for as a liability in its entirety.

Warrants held

The Company accounts for warrants held under ASC 321, Investments – Equity Securities (“ ASC 321 ”).

Warrants held and Investments

The Company accounts for warrants held and investments under ASC 321, Investments – Equity Securities (“ ASC 321 ”).

The scope of ASC 321 includes investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures and limited liability companies.

1 unchanged sentence

ASC 321 calls for equity interests to be carried at fair value with changes in value recorded in earnings.

The Company has elected to use a black scholes valuation model to arrive at a fair value of the warrants held (Note 19), which will be remeasured at each period end with any changes in valuation being recorded in other income.

The Company uses the BlackScholes valuation model to arrive at a fair value of the warrants held (Note 19), which is remeasured at each period end with changes in fair value recorded in other income.

ASC 321 provides a measurement alternative for equity securities without readily determinable fair values.

As such the Company’s investments are recorded at cost less impairment.

Revenue recognition

21 unchanged sentences

A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration).

Cost of sales

Cost of sales represents costs directly related to manufacturing and distribution of the Company’s products.

Primary costs include raw materials, packaging, direct labor, overhead, shipping and handling and the depreciation of manufacturing equipment and production facilities.

Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and property taxes.

Cost of sales also includes inventory valuation adjustments.

The Company recognizes the cost of sales as the associated revenues are recognized.

Advertising Costs

Advertising costs are expensed as incurred and are included in selling, general, and administrative expenses on the accompanying consolidated statements of loss and comprehensive loss and totaled $ 859,535 and $ 791,980 for the years ended December 31, 2024 and 2023, respectively.

The Company determines an estimate of losses on its accounts receivable based on a mix of aging and historical collections.

Stock-based compensation

14 unchanged sentences

The Company recognizes uncertain income tax positions at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority.

An uncertain income tax position will not be recognized if it has less than a

50% likelihood of being sustained.

An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

Changes in recognition or measurement are reflected in the period in which judgment occurs.

New accounting pronouncements not yet adopted

ASU 2023-09 In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740) .

The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024.

Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance.

Once adopted, this ASU will result in additional disclosures.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220):

Expense Disaggregation Disclosures.

The amendments in this ASU require public business entities to provide enhanced disclosures about significant categories of expenses, including employee compensation, depreciation, inventory expense, and other material expense categories, disaggregated by relevant income statement line items.

The guidance also requires qualitative disclosures about the nature of expense categories and the methods used to allocate expenses when applicable.

The amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company has not early adopted this ASU.

The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements and related disclosures.

Acquisitions, Assets Held for Sale, and Dispositions

On December 18, 2024, Vireo Growth Inc.

(the “Company”), entered into Merger Agreements (as defined herein) with respect to a business combination with each of (i) Deep Roots Holdings, Inc., a Nevada corporation (“Deep Roots”) (the “Deep Roots Merger”);

(ii) Proper Holdings Management, Inc.

and NGH Investments, Inc., both Missouri corporations (together, “Proper”) (the “Proper Mergers”);

and (iii) WholesomeCo, Inc., a Delaware corporation (“Wholesome”) (the “Wholesome Merger” and, collectively with the Deep Roots Merger and the Proper Mergers, the “Mergers”).

None of the Deep Roots Merger, the Proper Mergers or the Wholesome Merger is contingent on the completion of any of the other Mergers.

As of December 31, 2024, none of the Merger Transactions have closed, and as such, no financial results of the single-state operators have been presented or consolidated herein.

The consideration to be paid to acquire each of Deep Roots, Proper and Wholesome is based, in each case, in part on an estimated multiple of a 2024 “Reference EBITDA”, which is pro-forma for pending acquisitions as well as planned new retail openings and expansion projects, and a US $ 0.52 share reference price for the Company’s subordinate voting shares.

Pursuant to the Merger Agreements, former stockholders of each of Deep Roots, Proper and Wholesome may qualify for earnout payments made with the Company’s subordinate voting shares following December 31, 2026, based on each target’s Adjusted EBITDA (as defined in the applicable Merger Agreement) growth compared to such target’s Reference EBITDA (at a 4 x multiple), adjusted for incremental debt and certain other matters, respectively, and paid out using a share price for the Company’s subordinate voting shares of the higher of US $ 1.05 or the 20 -day volume weighted average price of the Company’s subordinate voting shares on the Canadian Securities Exchange, converted to United States Dollars based on the average exchange rate posted by the Bank of Canada as of the end of each trading day during such 20 -day period, as reported by Bloomberg Finance L.P.

(“VWAP”) as of December 31, 2026.

Reference EBITDA for Deep Roots, Proper and Wholesome are US $ 31.0 million, US $ 31.0 million, and US $ 16.0 million, respectively.

EBITDA growth is defined as the increase between Reference EBITDA and the higher of 2026 Adjusted EBITDA or trailing nine-month annualized Adjusted EBITDA as of December 31, 2026.

In no event shall the number of earnout shares issued under each Merger Agreement exceed the number of shares issued as closing merger consideration in each Merger Agreement.

Each of the Merger Agreements provides for the clawback of up to 50 % of the upfront merger consideration (excluding, in the case of Proper and Wholesome, the amounts attributable to Arches, as defined below) on December 31, 2026, if, in each case, (a) 2026 Adjusted EBITDA underperforms 96.5 % of the Reference EBITDA, and (b) retail revenue market share or EBITDA margin for 2026 is less (or lower) than 2024 and (c) the 20 -day VWAP as of December 31, 2026 is greater than US $ 1.05 per share.

The amount of shares subject to a clawback would be equal to the Acquisition Multiple (as defined in each Merger Agreement) for each of Deep Roots, Proper and Wholesome, respectively, multiplied by the EBITDA shortfall, and subject to certain other adjustments set forth in the applicable Merger Agreement, divided by US $ 0.52 per share, not to exceed 50 % of the upfront consideration.

In connection with the Wholesome Merger Agreement (as defined herein) and Proper Merger Agreement (as defined herein), the Company will include in the stock merger consideration calculation an amount equal to (i) US $ 11,860,800 for the stockholders of Wholesome and (ii) US $ 2,139,200 for the stockholders of Proper for all of the outstanding equity interests in Arches IP, Inc.

On December 18, 2024, the Company, entered into Merger Agreements with respect to the Mergers.

Each Merger was an all-share transaction whereby, at the closing of each applicable Merger, (i) a new wholly-owned subsidiary of the Company

merged with and into Deep Roots, (ii) a new wholly-owned subsidiary of the Company merged with and into Wholesome, and (iii) the Proper entities each merged with and into new wholly-owned subsidiaries of the Company.

The consideration paid to acquire each of Deep Roots, Proper and Wholesome was based, in each case, in part, on an estimated multiple of a 2024 “Closing EBITDA,” which was pro forma for pending acquisitions, planned new retail openings and expansion projects, and a US $ 0.52 share reference price for the Company’s subordinate voting shares (each subordinate voting share an “ SVS ” and collectively, the “ SVSs ”).

Pursuant to the Merger Agreements, former stockholders of Proper, Wholesome, and certain former stockholders of Deep Roots may qualify for earnout payments made with the Company’s SVSs following December 31, 2026, based on each target’s adjusted earnings before interest, taxes, depreciation and amortization (“ Adjusted EBITDA ”) (as defined in the applicable Merger Agreement) growth compared to such target’s Closing EBITDA (as defined in the applicable Merger Agreement) (plus, with respect to Deep Roots, $ 1,000,000 in EBITDA attributed to a new retail location) (at a 4 x multiple), adjusted for incremental debt and certain other matters, respectively, and paid out using a share price for the Company’s SVSs of the higher of US $ 1.05 or the 20 -day volume weighted average price of the Company’s SVSs on the Canadian Securities Exchange (“ CSE ”), converted to United States Dollars based on the average exchange rate posted by the Bank of Canada as of the end of each trading day during such 20 -day period, as reported by Bloomberg Finance L.P.

(the “ VWAP ”) as of December 31, 2026.

The Closing EBITDA for Deep Roots, Proper and Wholesome are US $ 30.0 million, US $ 31.0 million, and US $ 16.0 million, respectively.

EBITDA growth is defined as the increase between the Closing EBITDA and the higher of 2026 Adjusted EBITDA or the trailing nine-month annualized Adjusted EBITDA as of immediately prior to December 31, 2026.

In no event shall the number of earnout shares issued under each Merger Agreement exceed the number of shares issued as closing merger consideration under each Merger Agreement.

Each of the Merger Agreements provides for the clawback of up to 50 % of the upfront merger consideration (excluding, in the case of Proper and Wholesome, the amounts described in the next paragraph that are attributable to Arches, as defined below) on December 31, 2026, if (1) for Wholesome and Deep Roots, (a) 2026 Adjusted EBITDA underperforms 96.5 % of the Closing EBITDA (plus with respect to Deep Roots, $ 1,000,000 in EBITDA attributed to a new retail location), and (b) the retail revenue market share or EBITDA margin for 2026 is less (or lower) than 2024 and (c) the 20 -day VWAP as of immediately prior to December 31, 2026 is greater than US $ 1.05 per share, and (2) for Proper, 2026 Adjusted EBITDA underperforms 96.5 % of the Closing EBITDA.

The amount of shares subject to a clawback would be equal to the Acquisition Multiple (as defined in each Merger Agreement) of 4.175 for each of Deep Roots, Proper and Wholesome, respectively, multiplied by the EBITDA shortfall, and subject to certain other adjustments f or incremental debt and certain other matters, set forth in the applicable Merger Agreement, divided by US $ 0.52 per share.

In connection with the Merger Agreement with Wholesome (the “ Wholesome Merger Agreement ”) and the Merger Agreement with Proper (the “ Proper Merger Agreement ”), the Company included in the stock merger consideration

calculation an amount equal to (i) US $ 11,860,800 for Wholesome and (ii) US $ 2,139,200 for Proper for all of the outstanding equity interests in Arches IP, Inc.

(“ Arches ”) owned by Wholesome and Proper, respectively.

Subject to the terms and conditions of the Wholesome Merger Agreement and the Proper Merger Agreement, each of Wholesome, Proper and Arches option holders are collectively entitled to earnout payments based on performance of Arches, based on the greater of US $ 37.5 million or 5 x certain revenue percentages of Arches, with such revenue percentage amounts measured at the higher of trailing-twelve-month or nine-month annualized amounts as of December 31, 2026, paid out using a share price for the Company’s subordinate voting shares at the higher of US $ 1.05 or 20 -day VWAP as of December 31, 2026.

In connection with each of the Merger Agreements, the Company will enter into an Investor Rights Agreement with the persons receiving the Company’s subordinate voting shares in the Mergers.

Each Investor Rights Agreement will require the Company in certain circumstances to prepare and file with the Securities and Exchange Commission (the “SEC”) a registration statement covering the resale of the Company’s subordinate voting shares issued pursuant to the Merger Agreements, in each case following the expiration of the initial 12 month lock-up period following the closing of the transactions under each Merger Agreement.

Each Investor Rights Agreement will also provide such persons with certain piggyback registration rights in certain circumstances.

The closing of each of the Mergers is subject to closing conditions and contained in the Merger Agreements.

Pursuant to rules adopted by the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a Schedule 14C information statement will be prepared by the Company and filed with the SEC and mailed to the stockholders of the Company relating to stockholder approval of the issuance of the Company’s subordinate voting shares in the Mergers and any other approvals required under the rules of the Canadian Stock Exchange, which is expected to be obtained by written consent of the stockholders.

On June 23, 2023, the Company divested all the assets and liabilities of Red Barn Growers, Inc., a New Mexico nonprofit organization effectively controlled by the Company’s subsidiary company, Vireo Health of New Mexico, LLC, to 37 Management Group, Inc., a New Mexico corporation (“ 37 Management ”).

As part of this transaction, the Company is to be paid $ 1,000,000 , less cash on hand of $ 60,814 , of which $ 439,186 was paid at closing, and $ 500,000 is to be paid within one year of the close date.

The Company received $ 250,000 in December of 2023.

Consideration received was less than the net book value of the transferred assets and liabilities of $ 3,909,757 , resulting in a loss of $ 2,909,757 which was recorded in the consolidated statement of net loss and comprehensive loss for the year ended December 31, 2023.

Subject to the terms and conditions of the Wholesome Merger Agreement and the Proper Merger Agreement, each of Wholesome, Proper and Arches option holders are collectively entitled to earnout payments based on the performance of Arches, based on the greater of US $ 37.5 million or 5 x certain revenue percentages of Arches minus $ 4,000,000 , with such revenue percentage amounts measured at the higher of the trailing-twelve-month or nine-month annualized amounts as of December 31, 2026, paid out using a share price for the Company’s SVSs at the higher of US $ 1.05 or the 20 -day VWAP as of immediately prior to December 31, 2026.

On May 12, 2025, the Company closed the Wholesome Merger contemplated by the Wholesome Merger Agreement.

The Company analyzed the acquisition under Accounting Standards Update (“ ASU ”) 2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business and determined that the Wholesome Merger should be accounted for as a business combination.

Goodwill represents the premium the Company paid over the fair value of the net tangible and intangible assets acquired.

The goodwill arising from the Wholesome Merger primarily consists of the synergies and economies of scale expected from combining the operations of the Company and Wholesome, including growing the Company's customer base, acquiring assembled workforces, and expanding its presence in new and existing markets.

These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

The following table summarizes the allocation of consideration exchanged for the estimated fair value of tangible and identifiable intangible assets acquired and liabilities assumed:

Cash and cash equivalents

Other current assets

Income tax receivable

Property and equipment

Operating lease, right-of-use asset

Indemnification asset

Intangible assets, license

Intangible assets, developed technology

Accounts payable and accrued liabilities

Right-of-use liability

Long-term debt, net

Deferred tax liabilities

Uncertain tax liability

Total liabilities

Net assets acquired

Consideration:

Share consideration

Contingent consideration

Total Consideration

The acquired intangible assets include cannabis licenses and developed technology which are treated as definite-lived intangible assets amortized over a 15-year useful life.

As of December 31, 2025, the Company has recorded a contingent consideration liability of $ 19,180,000 , which represents the estimated fair value of the potential earnout payments based on management’s current projections of Adjusted EBITDA performance relative to the Closing EBITDA thresholds.

The contingent consideration is classified as a Level 3 liability within the fair value hierarchy and is remeasured at each reporting date, with changes in fair value recognized in earnings.

During the year ended December 31, 2025, the Company recognized a $ 9,827,000 loss related to the change in the fair value of contingent consideration in earnings related to the remeasurement of this liability.

As part of the Wholesome Merger, the sellers contractually agreed to indemnify the Company for certain pre-closing liabilities, including those related to unpaid uncertain tax liabilities.

On May 12, 2025, the Company recognized a liability of $ 13,309,000 for uncertain tax positions related to the pre-acquisition periods in accordance with Accounting Standards Codification (“ ASC ”) 740, Income Taxes.

Consistent with the provisions of ASC 805-20-25-27, the Company also recognized a corresponding indemnification asset of $ 11,005,980 , measured on the same basis as the related liability, which represents the uncertain tax liability recognized of $ 13,309,000 less $ 303,020 of income taxes receivable and $ 2,000,000 of tax specific cash contributions from Wholesome.

The indemnification asset was classified as a non-current asset in the Company’s consolidated balance sheet as of December 31, 2025, and will be adjusted in future periods if the related liability is settled, released, or remeasured.

Changes in the fair value of the indemnification asset, if any, will be recorded in earnings in the same financial statement line item as the change in the related liability.

As of December 31, 2025, there have been no changes in the estimated amount of indemnified tax exposure or the related asset.

Supplemental pro forma information (unaudited) for Wholesome Merger

The unaudited pro forma information for the periods set forth below gives effect to the Wholesome Merger as if the acquisition had occurred on January 1, 2025.

This pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the transaction been consummated as of that time nor does it purport to be indicative of future financial operating results.

Proforma revenues attributable to subordinate voting shareholders for the year ended December 31, 2025 were $ 54,040,596 .

Proforma net loss attributable to subordinate voting shareholders for the year ended December 31, 2025 was $ 11,143,028 .

Unaudited pro forma net income reflects the adjustment of sales between the companies, and adjustments for alignment of significant differences in accounting principles and elections.

On June 5, 2025, the Company closed the Proper Mergers contemplated by the Proper Merger Agreement.

The Company analyzed the acquisition under ASU 2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business and determined that the Proper Mergers should be accounted for as a business combination.

Goodwill represents the premium the Company paid over the fair value of the net tangible and intangible assets acquired.

The goodwill arising from the Proper Mergers primarily consists of the synergies and economies of scale expected from combining the operations of the Company and Proper, including growing the Company's customer base, acquiring assembled workforces, and expanding its presence in new and existing markets.

These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

The following table summarizes the allocation of consideration exchanged for the estimated fair value of tangible and identifiable intangible assets acquired and liabilities assumed:

Cash and cash equivalents

Income tax receivable

Other current assets

Property and equipment

Operating lease, right-of-use asset

Indemnification asset

Intangible assets, license

Accounts payable and accrued liabilities

Right-of-use liability

Long-term debt, net

Deferred tax liabilities

Uncertain tax liability

Other long-term liabilities

Total liabilities

Net assets acquired

Consideration:

Share consideration

Contingent consideration

Total Consideration

The acquired intangible assets include cannabis licenses and developed technology which are treated as definite-lived intangible assets amortized over a 15-year useful life.

As of December 31, 2025, the Company recorded a contingent consideration liability of $ 3,951,000 , which represents the estimated fair value of the potential earnout payments based on management’s current projections of Adjusted EBITDA performance relative to the Closing EBITDA thresholds.

The contingent consideration is classified as a Level 3 liability within the fair value hierarchy and is remeasured at each reporting date, with changes in fair value recognized in earnings.

During the year ended December 31, 2025, the Company recognized a $ 898,000 loss related to the change in the fair value of contingent consideration in earnings related to the remeasurement of this liability.

As part of the Proper Mergers, the sellers contractually agreed to indemnify the Company for certain pre-closing liabilities, including those related to unpaid uncertain tax liabilities.

On June 5, 2025, the Company recognized a liability of $ 14,927,000 for uncertain tax positions related to the pre-acquisition periods in accordance with ASC 740, Income Taxes.

Consistent with the provisions of ASC 805-20-25-27, the Company also recognized a corresponding indemnification asset of $ 6,221,000 , measured on the same basis as the related liability, which represents the uncertain tax liability recognized of $ 14,927,000 less $ 5,705,592 of income taxes receivable and $ 3,000,000 of tax specific cash contributions from Proper.

Changes in the fair value of the indemnification asset, if any, will be recorded in earnings in the same financial statement line item as the change in the related liability.

As of December 31, 2025, there were no changes in the estimated amount of indemnified tax exposure or the related asset.

Supplemental pro forma information (unaudited) for Proper Mergers

The unaudited pro forma information for the periods set forth below gives effect to the Proper Mergers as if the acquisition had occurred on January 1, 2025.

Proforma revenues attributable to subordinate voting shareholders for the year ended December 31, 2025 were $ 96,524,931 .

Proforma net loss attributable to subordinate voting shareholders for the year ended December 31, 2025 was $ 3,612,147 .

Unaudited pro forma net income reflects the adjustment of sales between the companies, and adjustments for alignment of significant differences in accounting principles and elections.

On June 6, 2025, the Company closed the Deep Roots Merger contemplated by the Merger Agreement with Deep Roots (the “ Deep Roots Merger Agreement ”).

The Company analyzed the acquisition under ASU 2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business and determined that the Deep Roots Merger should be accounted for as a business combination.

Goodwill represents the premium the Company paid over the fair value of the net tangible and intangible assets acquired.

The goodwill arising from the Deep Roots Merger primarily consists of the synergies and economies of scale expected from combining the operations of the Company and Deep Roots, including growing the Company's customer base, acquiring assembled workforces, and expanding its presence in new and existing markets.

These benefits were not recognized separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

The following table summarizes the allocation of consideration exchanged for the estimated fair value of tangible and identifiable intangible assets acquired and liabilities assumed:

Cash and cash equivalents

Income tax receivable

Other current assets

Property and equipment

Operating lease, right-of-use asset

Indemnification asset

Intangible assets, license

Accounts payable and accrued liabilities

Right-of-use liability

Long-term debt, net

Deferred tax liabilities

Uncertain tax liability

Total liabilities

Net assets acquired

Consideration:

Share consideration

Contingent consideration

Total Consideration

The acquired intangible assets include cannabis licenses which are treated as definite-lived intangible assets amortized over a 15-year useful life.

As part of the Deep Roots Merger, the sellers contractually agreed to indemnify the Company for certain pre-closing liabilities, including those related to unpaid uncertain tax liabilities.

On June 6, 2025, the Company recognized a liability of $ 24,917,000 for uncertain tax positions related to the pre-acquisition periods in accordance with ASC 740, Income Taxes.

Consistent with the provisions of ASC 805-20-25-27, the Company also recognized a corresponding indemnification asset of $ 8,545,886 , measured on the same basis as the related liability, which represents the uncertain tax liability recognized of $ 24,917,000 less $ 14,370,392 of income taxes receivable and $ 2,000,000 of tax specific cash contributions from Deep Roots.

As of December 31, 2025, the Company recorded a contingent consideration liability of $ 1,317,000 , which represents the estimated fair value of the potential earnout payments based on management’s current projections of Adjusted EBITDA performance relative to the Closing EBITDA thresholds.

The contingent consideration is classified as a Level 3 liability within the fair value hierarchy and is remeasured at each reporting date, with changes in fair value recognized in earnings.

During the year ended December 31, 2025, the Company recognized a $ 1,108,000 gain related to the change in the fair value of contingent consideration in earnings related to the remeasurement of this liability.

Changes in the fair value of the indemnification asset, if any, will be recorded in earnings in the same financial statement line item

as the change in the related liability.

As of December 31, 2025, there were no changes in the estimated amount of the indemnified tax exposure or the related asset.

Supplemental pro forma information (unaudited) for Deep Roots Merger

The unaudited pro forma information for the periods set forth below gives effect to the Deep Roots Merger as if the acquisition had occurred on January 1, 2025.

Proforma revenues attributable to subordinate voting shareholders for the year ended December 31, 2025 were $ 101,736,343 .

Proforma net income attributable to subordinate voting shareholders for the year ended December 31, 2025 was $ 1,180,493 .

Unaudited pro forma net income reflects the adjustment of sales between the companies, and adjustments for alignment of significant differences in accounting principles and elections.

Assets Held for Sale

As of December 31, 2024, the Company has identified property and equipment, deposits, and lease assets and liabilities associated with the businesses in New York, Nevada and Massachusetts with carrying amounts that are expected to be recovered principally through sale or disposal rather than through continuing use.

The sale of these assets and liabilities is highly probable, they can be sold in their immediate condition, and the sales are expected to occur within the next twelve months.

As of December 31, 2025, the Company has identified property and equipment with carrying amounts that are expected to be recovered principally through sale or disposal rather than through continuing use.

The sale of these assets is highly probable, they can be sold in their immediate condition, and the sales are expected to occur within the next twelve months.

As such, these assets and liabilities have been classified as “held for sale.” Management does not believe these divestitures represent a strategic shift that has or will have a major effect on an entity’s operations and financial results, and as such, none of these divestitures are considered a discontinued operation.

The fair value less expected cost to sell of net assets exceededthe carrying value, and as such, the Company recorded no impairment loss.

For the year ended December 31, 2023, the Company recorded an impairment loss of $ 399,999 and disposed of certain held for sale property, equipment, and leased assets for which proceeds received of $ 253,288 were less than carrying value resulting in a loss on disposal of $ 1,567,981 in the statement of net loss and comprehensive loss.

The fair value less expected cost to sell of net assets exceeded the carrying value, and as such, the Company recorded no impairment loss.

At December 31, 2024, the Company determined that certain assets and liabilities associated with its New York operations met the criteria to be classified as held for sale and, accordingly, ceased depreciation and amortization on the related long-lived assets.

During the year ended December 31, 2025, the Company reassessed its strategic plans related to the New York operations and determined that the Company now expects to retain control of these assets and liabilities.

As a result, the assets and liabilities previously classified as held for sale no longer met the criteria for such classification.

Accordingly, during 2025, the Company reclassified the assets and liabilities out of assets held for sale and back to their respective balance sheet captions.

The long-lived assets were measured at the lower of (i) their carrying amounts prior to classification as held for sale, adjusted for depreciation and amortization that would have been recognized had the assets remained in use, or (ii) their fair value at the date of the decision to retain the assets.

As a result of this reassessment, the Company recorded a catch-up depreciation expense of $ 9,685,126 and $ 219,229 of catch-up amortization expense during the year ended December 31, 2025, which is included in operating expenses in the consolidated statements of loss and comprehensive loss.

During the year ended December 31, 2025, the Company completed the disposition of certain assets previously classified as held for sale.

As consideration, the Company received $ 250,000 in cash and notes receivable with an aggregate principal amount of $ 1,250,000 .

Assets and liabilities held for sale are as follows:

7 unchanged sentences

Total liabilities held for sale

Current assets and liabilities held by our New York business have not been classified as held for sale.

Pre-tax operating losses attributable to the New York business were $ 16,358,796 and $ 13,670,439 for the years ended December 31, 2024 and 2023, respectively.

Fair Value Measurements

5 unchanged sentences

The Company’s non-financial assets, such as prepayments and other current assets, long lived assets, including property and equipment, and intangible assets, are measured at fair value when there is an indicator of impairment and are recorded at fair value only when an impairment charge is recognized.

In connection with an evaluation of such non-financial assets during the year ended December 31, 2024, the carrying values of property and equipment included in assets held for sale and an intangible license no longer in use were concluded to exceed their fair values.

As a result, the Company recorded impairment charges that incorporates fair value measurements.

The Company used Level 2 fair value inputs when a buyer quote was received, or similar assets had been sold recently in the market.

The carrying value of the Company’s accounts receivable, accounts payable, and accrued liabilities approximate their fair value due to their short-term nature, and the carrying value of convertible debt, and long-term debt approximates fair value as they bear a market rate of interest.

The carrying value of the Company’s warrants held utilize Level 3 inputs given there is no market activity for the asset.

The inputs used are further described in Note 19.

In connection with an evaluation of such non-financial assets during the year ended December 31, 2025, the carrying values of property and equipment were concluded to exceed their fair values with the exception of the $ 2,600,000 impairment loss taken.

Restricted cash consists of cash balances that are legally or contractually restricted as to withdrawal or use.

The carrying amount approximates fair value due to the short-term nature of the deposits.

The carrying value of the Company’s derivative liabilities utilize Level 2 and Level 3 inputs given the inputs are indirectly observable but not quoted for identical contracts.

The carrying value of the Company’s warrants held, contingent consideration, and investments utilize Level 3 inputs given there is no market activity for the asset.

Accounts Receivable

Accounts receivables are comprised of the following items:

Trade receivable

Tax withholding receivable

Trade receivables, net

Tax withholding receivables, net

Included in the trade receivables balance at December 31, 2025, and 2024, are credit losses of $ 1,266,965 and $ 84,989 , respectively.

Included in the tax withholding receivable, net balance at December 31, 2024 and 2023, are credit losses of $ 159,275 .

Included in the tax withholding receivable, net balance at December 31, 2024, are credit losses of $ 159,275 .

Notes Receivable

As of December 31, 2024, and 2023, the Company had a total of $ 0 and $ 3,750,000 in notes receivable, respectively.

During the year ended December 31, 2024, the Company received $ 3,600,000 in proceeds related to the repayment of the $ 3,750,000 note receivable, which was consideration received in connection with the divestiture of the Company’s Pennsylvania operations in 2020.

The Company considers the note receivable to be fully paid.

The $ 150,000 difference between the face value of the note and proceeds received is included in other expense on the consolidated statements of net loss and comprehensive loss as a result of the Company writing off interest receivable.

During the year ended December 31, 2025, the Company entered into Convertible Note Secondary Sale and Purchase Agreements (the “ Note Purchase Agreements ”) with certain holders (the “ Noteholders ”) certain 13 % Senior Secured Convertible Notes due December 7, 2026 (the “ Note s”) of Medicine Man Technologies, Inc.

d/b/a Schwazze, a Nevada corporation (“ Schwazze ”).

The Notes, which have a value of approximately $ 94,000,000 , consisting of principal and accrued interest, were acquired by issuing 117,905,205 subordinate voting shares to the Noteholders.

The notes receivable were initially recognized at fair value, which was determined based on the fair value of the subordinate voting shares issued.

The fair value of the shares issued was $ 77,976,015 and was recorded as notes receivable in the consolidated balance sheet.

Schwazze’s obligations under the Notes are secured by (i) a junior security interest in the assets of PBS Holdco LLC, a wholly-owned subsidiary of Schwazze, Schwazze’s Colorado manufacturing operation, 36 acres of land in Huerfano County, Colorado owned by Schwazze and substantially all of the assets owned by SBUD LLC, a wholly-owned subsidiary of Schwazze, and (ii) a first priority security interest in all assets owned by Schwazze and all of its direct or indirect subsidiaries on or after December 7, 2021.

Schwazze is currently in default on its payment obligations under the Notes.

Chicago Atlantic Admin, LLC serves as collateral agent under the Indenture governing the terms of the Notes.

John Mazarakis, the Company’s Chief Executive Officer, is a partner of Chicago Atlantic Group, LP, an affiliate of Chicago Atlantic Admin, LLC.

On October 29, 2025, the Company completed the disposition of certain assets previously classified as held for sale.

As consideration, the Company received $ 250,000 in cash and notes receivable with an aggregate principal amount of $ 1,250,000 bearing an interest rate of 15 % per annum.

Principal of $ 500,000 , together with interest accrued for the first six months, is payable on April 29, 2025.

The remaining principal balance of $ 750,000 , together with accrued interest, is payable on October 29, 2026.

Inventory is comprised of the following items:

1 unchanged sentence

Finished goods

In connection with the closing of the Mergers, the Company recorded the acquired inventories at their estimated fair values in accordance with ASC 805, Business Combinations .

Fair value represents the estimated selling price of the acquired inventory, less the expected costs to sell the inventory.

The estimated fair value of the inventory exceeded cost, resulting in a fair value step-up adjustment to acquired inventories totaling $ 17,804,132 .

During the year ended December 31, 2025, $ 17,805,282 of amortization associated with this fair value step-up was recorded.

This amortization was recorded to cost of sales in the consolidated statement of loss and comprehensive loss for the year ended December 31, 2025.

Inventory is written down for any obsolescence, spoilage and excess inventory or when the net realizable value of inventory is less than the carrying value.

Inventory valuation adjustments included in cost of sales on the statements of net loss and comprehensive loss is comprised of the following:

Year Ended December 31,

Work-in-progress

Finished goods

During the years ended December 31, 2024 and 2023, the Company assessed inventory for write downs to net realizable value in its New York, Maryland, and Minnesota subsidiaries.

Based on the market sales price relative to the cost to produce certain inventories it was determined that net realizable value exceeded the carrying value of inventory, and therefore no write downs were recorded for the years ended December 31, 2024 and 2023.

However, the Company recorded inventory reserves related to expected future spoilage of inventory.

Accordingly, inventory valuation adjustments amounting to $ 294,000 and $ 1,289,345 were recorded in 2024 and 2023 respectively.

Prepayments and Other Current Assets

Prepayments and other current assets are comprised of the following items:

Prepaid Insurance

Other Prepaid Expenses

Property and Equipment, Net

9 unchanged sentences

For the years ended December 31, 2025 and 2024, accumulated amortization of the right of use asset amounted to $ 11,031,180 and $ 2,511,820 , respectively.

For the years ended December 31, 2024 and 2023, the right of use asset under finance lease of $ 7,572,566 and $ 7,938,138 , respectively, consists of leased processing and cultivation premises, and leased equipment.

During the years ended December 31, 2025 and 2024, total interest expense capitalized to property plant and equipment was $ 2,072,527 and $ 1,387,750 , respectively.

1 unchanged sentence

The capitalized depreciation costs associated are added to inventory and expensed through Cost of Sales Product Cost on the consolidated statements of net loss and comprehensive loss.

As of December 31, 2024, the Company evaluated whether property and equipment showed any indicators of impairment, and it was determined that the recoverable amount of certain net assets was above book value.

As a result, the Company recorded an impairment charge of $ 0 (2023 - $ 0 ) on property and equipment, net.

As of December 31, 2025, the Company evaluated whether property and equipment showed any indicators of impairment, and it was determined that the recoverable amount of certain net assets was below book value.

As a result, the Company recorded an impairment charge of $ 2,600,000 (2024 - $ 0 ) on property and equipment, net for the year ended December 31, 2025.

Components of lease expenses are listed below:

14 unchanged sentences

( 210,382,254 )

Less liabilities held for sale

( 2,699,014 )

( 86,688,189 )

( 89,387,203 )

Present value of lease liability

The Company has entered into various lease agreements for the use of buildings used in production and retail and wholesale sales of cannabis products.

On February 22, 2024, the Company executed a lease for cannabis cultivation and manufacturing facilities.

Rent commences on January 1, 2025, at which time monthly base rent will be $ 82,500 .

Base rent escalates at a rate of 4 % per annum.

Per the terms of the lease the Company has the option to draw up to $ 2,000,000 of tenant improvement allowances.

As of December 31, 2024, no draws have been taken.

Starting January 1, 2025, the Company has the option to purchase the property.

The initial purchase price is $ 13,000,000 increasing by 3 % at the start of each calendar year until the option expires on December 31, 2028.

The lease expires on December 31, 2034, with an option to renew for two additional five-year terms.

On November 1, 2023, the Company notified its landlord in Puerto Rico that it was surrendering the premises.

As such, the Company disposed of the held for sale assets affiliated with the Puerto Rico lease and recorded a loss on disposal of assets of $ 1,632,372 in the statement of net loss and comprehensive loss for the year ended December 31, 2023.

On October 27, 2023, the Company executed a fifth amendment to its lease with its landlord on its cannabis cultivation and manufacturing facilities located in Johnstown, New York.

As part of the fifth amendment to the lease in Johnstown, the Company and its landlord have agreed to increase the tenant improvement allowance on the lease by an additional $ 14.0 million.

The increase in tenant improvement funds will be utilized to support the completion of the construction of the indoor expansion project that was announced in September 2021.

The parties have also agreed to a monthly base rental increase of $ 210,000 beginning November 2023.

On February 24, 2023, the Company signed the fourth amendment to the existing lease agreements for the cultivation and processing facilities in New York.

The amendment provides for additional tenant improvements of $ 4,000,000 and increases base rent by $ 50,000 a month.

Supplemental cash flow information related to leases

11 unchanged sentences

Goodwill - December 31, 2024

Divestitures (Note 3)

Goodwill - December 31, 2023 and December 31, 2024

Goodwill is tested for impairment annually or more frequently if indicators of impairment exist or if a decision is made to dispose of the business.

The valuation date for the Company’s annual impairment testing is December 31.

On this date, the Company performed a qualitative test to determine whether it is necessary to perform a two-step goodwill impairment test.

The Company divested Vireo Health of New Mexico, LLC, and the associated goodwill on June 23, 2023 (Note 3).

The Company has no goodwill as of December 31, 2024.

As such, no further impairment testing procedures were performed.

Acquisitions (Note 3)

Goodwill - December 31, 2025

During the year ended December 31, 2025, the Company recorded goodwill in connection with acquisitions completed during the period.

Goodwill represents the excess of the purchase price over the estimated fair value of the identifiable net assets acquired and primarily reflects expected synergies, assembled workforce, and other intangible benefits that do not qualify for separate recognition.

The Company evaluates goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired.

For the year ended December 31, 2025, the Company performed a qualitative assessment and concluded that it was more likely than not that the fair value of its reporting units exceeded their respective carrying amounts.

Accordingly, the Company determined that it was not necessary to perform a quantitative goodwill impairment test, and no impairment was recognized during the period.

Intangible assets are comprised of the following items:

Licenses & Trademarks

Developed Technology

Balance, December 31, 2023

Balance, December 31, 2024

Acquisitions (Note 3)

Assets moved out of held for sale

Capitalization of internally generated software costs

( 5,167,060 )

( 5,846,767 )

Balance, December 31, 2025

Amortization expense for intangibles was $ 819,250 and $ 728,419 during the years ending December 31, 2024 and 2023, respectively and is recorded in operating expenses on the consolidated statements of net loss and comprehensive loss.

During the year ended December 31, 2023, the Company wrote off $ 11,630 relating to a trademark no longer in use.

further indicators of impairment existed, and no additional impairment of intangible assets was recorded for the year ended December 31, 2024.

The Company estimates that amortization expense will be $ 8,983,055 per year , for the next five years.

7 unchanged sentences

Long-Term Debt

During 2017 the Company signed a promissory note payable in the amount of $ 1,010,000 .

The note bears interest at a rate of 15 % per annum with interest payments required on a monthly basis.

In 2019 the Company’s promissory note payable in the amount of $ 1,010,000 was modified to increase the amount payable to $ 1,110,000 .

The Company paid the note off in full during the year ended December 31, 2024.

On November 19, 2021, the Company signed a promissory note payable in the amount of $ 2,000,000 in connection with the acquisition of Charm City Medicus, LLC.

The note bears an interest rate of 8 % per annum with interest payments due on the last day of each calendar quarter.

On November 19, 2023, the Company and lender amended the note.

Per the terms of the amendment, the interest rate was modified to 15 %, and the Company paid off $ 1,000,000 of principal.

On November 27, 2024, the Company and lender executed the second amendment to the note.

Per the terms of the amendment, the maturity date was extended, the interest rate was increased to 18 %, and the Company repaid $ 100,000 in principal.

The remaining principal balance of $ 900,000 is due on February 28, 2025 , and the note is secured by 25 % of the membership interests in Vireo Health of Charm City, LLC.

On February 28, 2025 the note was repaid in full.

On March 25, 2021, the Company entered into a credit agreement for a senior secured delayed draw term loan with an aggregate principal amount of up to $ 46,000,000 (the “ Credit Facility ”), and executed a draw of $ 26,000,000 in principal.

The unpaid principal amounts outstanding under the Credit Facility bear interest at a rate of (a) the U.S.

prime rate plus 10.375 %, payable monthly in cash, and (b) 2.75 % per annum paid in kind interest payable monthly.

In connection with the Credit Facility, the Company also pays a monthly credit monitoring fee in the amount of $ 130,400 which is included in interest expense in the consolidated statements of net loss and comprehensive loss for the years ended December 31, 2024 and 2023.

On November 18, 2021, the Company and lenders amended the Credit Facility to provide for an additional loan of $ 4,200,000 with a cash interest rate of 15 % per annum and PIK interest of 2 % per annum.

Obligations under the Credit Facility are secured by substantially all the assets of the Company.

On January 31, 2022, Vireo and certain of its subsidiaries, as borrowers (collectively, “ Borrowers ”), entered into a Third Amendment to the Credit Facility (the “ Third Amendment ”) providing for additional delayed draw term loans of up to $ 55 million (the “ Delayed Draw Loans ”).

The cash interest rate on the Delayed Draw Loans under the Third Amendment is equal to the U.S.

prime rate plus 10.375 %, with a minimum required rate of 13.375 % per annum, in addition to paid-in-kind interest of 2.75 % per annum.

On March 31, 2023, the Company executed a fifth amendment to its Credit Facility with its senior secured lender, Chicago Atlantic Admin, LLC (the " Agent "), an affiliate of Green Ivy Capital, and a group of lenders.

The amended credit facility extends the maturity date on its Delayed Draw Loans to April 30, 2024, through the issuance of 15,000,000 Subordinate

Voting Shares in lieu of a cash extension fee.

These 15,000,000 shares were valued at $ 1,407,903 using a fair value per share of $ 0.094 and considered a deferred financing cost.

The fair value per share reflects a 22 % discount to the market price at the time of issuance to account for the four-month trading lock-up imposed on the shares.

The amendment also provides the Company with reduced cash outlays by eliminating required amortization of the loan, and requires the Company to divest certain assets to improve its liquidity position and financial performance.

The Company has the potential to extend the maturity date on its Delayed Draw Loans up to January 31, 2026 with the satisfaction of certain financial performance-related conditions.

On April 30, 2024, the Company executed a short-term extension of the maturity date on the Credit Facility with the Agent.

The Credit Facility was extended until June 14, 2024, matching all other terms of the existing agreement.

On June 14, 2024, another short-term extension was executed which extended the maturity date on the Credit Facility to July 31, 2024, matching all other terms of the existing agreement.

On May 20, 2024 the Company executed a $ 1,200,000 term loan with the Agent to assist with the purchase of a site for a new dispensary location.

The loan bears an interest rate of 12.0 % and is due on May 28, 2027.

Financing costs of $ 68,600 were incurred in connection with the closing of the loan.

On July 31, 2024, the Company executed a ninth amendment to the Company’s Credit Facility.

The ninth amendment to the Company’s Credit Facility extends the maturity date on the Credit Facility loans to January 29, 2027, and amends certain financial measure definitions and covenants within the agreement.

The Company issued 12,500,000 Subordinate Voting Shares to the lenders in consideration for the credit facility amendment.

These 12,500,000 shares were valued at $ 5,387,500 using a fair value per share of $ 0.431 and considered a deferred financing cost.

On December 27, 2024, Vireo Health of Minnesota, LLC (“Vireo Minnesota”), a wholly-owned subsidiary of the Company entered into a secured credit agreement among Vireo Minnesota as Borrower, the Company and various affiliated entities as Guarantors (as defined therein), Chicago Atlantic Lincoln, LLC, the lender party thereto and Chicago Atlantic Admin, LLC, as Administrative Agent and Collateral Agent.

The executed secured credit agreement with the Agent allows for the issuance of certain loans of up to an aggregate principal amount of $ 11,500,000 .

These loans are intended to assist with the financing of a new indoor cultivation facility.

These loans bears an interest rate of 10.5 % and are due on June 26, 2026.

As of December 31, 2024, the Company has drawn $ 5,500,000 in aggregate principal, and incurred financing costs of $ 1,549,773 .

On December 31, 2024, Vireo Minnesota closed on a $ 15,000,000 principal amount loan with Stearns Bank National Association (the “Commercial Loan”), with the Company and Vireo Health, Inc., a wholly-owned subsidiary of the Company, as guarantors.

The Commercial Loan has a term of 24 months and carries a fixed annual interest rate of 9.25 %, payable monthly with interest-only payments through the initial 12 months , followed by monthly principal and interest payments based on a 240-month amortization schedule for the remaining term of the Commercial Loan.

The Commercial Loan has no prepayment penalty and is collateralized by a leasehold construction mortgage associated with the buildout of a new cultivation facility for Vireo Minnesota in an existing industrial building in Elk River, Minnesota.

As of December 31, 2024, there was no principal amount outstanding as funding has not yet commenced.

However, the Company incurred financing costs of $ 412,897 .

During 2017, the Company entered into a promissory note payable with an original principal amount of $ 1,010,000 .

In 2019, the note was amended to increase the principal amount to $ 1,110,000 .

The note was repaid in full during the year ended December 31, 2024.

On November 19, 2021, the Company entered into a $ 2,000,000 promissory note in connection with the acquisition of Charm City Medicus, LLC.

The note originally bore interest at 8 % per annum and required quarterly interest payments.

The note was amended in November 2023 to increase the interest rate to 15 % and reduce the outstanding principal through a $ 1,000,000 repayment.

In November 2024, the note was further amended to increase the interest rate to 18 %, extend the maturity date, and provide for a $ 100,000 principal repayment.

The remaining principal balance of $ 900,000 was due February 28, 2025 and was repaid in full on that date.

On March 25, 2021, the Company entered into a senior secured delayed draw term loan credit agreement with an aggregate principal amount of up to $ 46,000,000 (the “Credit Facility”) and initially drew $ 26,000,000 .

Borrowings under the Credit Facility bear interest at the U.S.

prime rate plus 10.375 %, payable monthly in cash, and 2.75 % per annum paid-in-kind interest.

In connection with the Credit Facility, the Company pays a monthly credit monitoring fee of $ 130,400 , which is included in interest expense.

The Credit Facility has been amended from time to time, including amendments in 2021 and 2022 providing for additional delayed draw term loans and amendments in 2023 and 2024 modifying certain terms and extending the maturity date.

On July 31, 2024, the Company executed an amendment to the Credit Facility extending the maturity date to January 29, 2027 and modifying certain financial covenants.

In connection with this amendment, the Company issued 12,500,000 Subordinate Voting Shares to the lenders, valued at $ 5,387,500 , which were recorded as deferred financing costs.

On May 20, 2024, the Company entered into a $ 1,200,000 term loan with its senior secured lender to assist with the purchase of a site for a new dispensary location.

The loan bears interest at 12.0 % and matures on May 28, 2027.

Financing costs of $ 68,600 were incurred in connection with the loan.

On December 27, 2024, Vireo Health of Minnesota, LLC (“Vireo Minnesota”), a wholly-owned subsidiary of the Company, entered into a secured credit agreement with Chicago Atlantic Admin, LLC providing for borrowings of up to $ 11,500,000 to finance the construction of a new indoor cultivation facility.

Borrowings under the agreement bear interest at 10.5 % and mature on June 26, 2026.

The Company drew $ 5,500,000 under the facility and incurred financing costs of $ 1,549,773 .

On December 31, 2024, Vireo Minnesota entered into a $ 15,000,000 commercial loan agreement with Stearns Bank National Association to finance the buildout of a cultivation facility in Elk River, Minnesota.

The loan has a 24-month term and carries a fixed interest rate of 9.25 %.

Interest-only payments are required during the first 12 months , followed by principal and interest payments based on a 240-month amortization schedule.

The loan is collateralized by a leasehold construction mortgage associated with the facility.

No borrowings had were made under the loan;

however, financing costs of $ 412,897 were incurred.

Long-Term Debt Arising from the Mergers

In connection with the closing of the Proper Mergers, the Company became obligated under $ 25,502,655 of notes payable due to Chicago Atlantic Admin, LLC.

The unpaid principal amounts outstanding bore interest at a rate of (a) 11.00 %, and (b) 3.00 % per annum PIK interest, both payable monthly in cash.

In addition, 1 % amortization of the original principal value of the note, or $ 27,100,000 , was payable monthly , and the note was set to mature on November 28, 2025.

See Note 3 for additional information.

In connection with the closing of the Deep Roots Merger, the Company became obligated under $ 19,166,670 of notes payable due to Chicago Atlantic Admin, LLC.

The unpaid principal amounts outstanding bore interest at a rate of (a) the U.S.

prime rate, with a floor of 8.00 %, plus (b) 6.50 %, payable monthly in cash.

In addition, 0.83 % amortization of the

original principal value of the note, or $ 20,000,000 , was payable monthly , and the note was set to mature on August 15, 2027.

See Note 3 for additional information.

In connection with the closing of the Wholesome Merger, the Company became obligated on a $ 8,592,555 term loan bearing an interest rate of 11.25 %, payable monthly in cash.

The term loan was repaid in full on May 13, 2025.

Additionally, the Company became obligated on $ 1,000,000 of promissory notes bearing an interest rate of 13.00 %, payable monthly cash.

See Note 3 for additional information.

First Lien Term Loan and Chicago Atlantic Term Loan

On July 3, 2025, the Company also entered into a Loan and Security Agreement (the “First Lien Term Loan”), effective July 7, 2025, with East West Bank, a California banking corporation (“East West Bank”), as Administrative Agent (the “Administrative Agent”), and Western Alliance Bank, an Arizona corporation, as co-administrative agent (the “Co-Admin Agent”).

The First Lien Term Loan provides for an aggregate principal amount of $ 120,000,000 .

The aggregate principal amount of the First Lien Term Loan amortizes in quarterly installments of $ 3,000,000 .

The Company will make such quarterly amortization payments commencing on December 31, 2025 and on the last business day of each quarter thereafter through and including July 3, 2028.

Upon maturity of the First Lien Term Loan on July 31, 2028, the remaining outstanding principal amount of the First Lien Term Loan, and all accrued and unpaid interest thereon, will be due and payable in full.

The First Lien Term Loan bears interest at the one-month Term Secured Overnight Financing Rate (subject to a 3 % floor) plus 4 % per annum.

The First Lien Term Loan shall, at the Administrative Agent’s option, convert to a Prime Rate Loan at the end of the First Lien Term Loan’s current one-month interest period if an event of default shall occur and be continuing, at which time an additional 2 % of default interest will also be applicable to the First Lien Term Loan.

On July 3, 2025, the Company entered into a secured term loan (the “Chicago Atlantic Term Loan”), effective July 7, 2025, with Chicago Atlantic Opportunity Finance, LLC, as a Lender, Chicago Atlantic Admin, LLC, as Administrative Agent and Collateral Agent (“2L Agent”) and Chicago Atlantic Credit Advisers, LLC, as Lead Arranger (“Lead Arranger”).

The Chicago Atlantic Term Loan provides for a principal amount of $ 33,000,000 to be loaned to the Company along with a $ 50,000,000 accordion feature, available to support future strategic initiatives, subject to the sole discretion of the Lender and 2L Agent.

Amortization payments are due and payable monthly on each payment date in an amount equal to 1 % of the loan amount starting November 30, 2025.

All unpaid and accrued interest is due and payable on the maturity date of October 2, 2028, with an option to extend for an additional year subject to a 1.00 % extension fee of all loans advanced by lenders under the Chicago Atlantic Term Loan.

The Chicago Atlantic Term Loan bears interest at the Prime Rate (subject to a 7.50 % floor) plus 5.50 % per annum.

The First Lien Term Loan is secured by a perfected first priority security interest in all assets and future assets of the Company.

The Chicago Atlantic Term Loan is secured by a second priority security interest in and lien on all existing assets and future assets of the Company.

The proceeds from the First Lien Term Loan and Chicago Atlantic Term Loan were used to retire all of the Company’s existing debt obligations, including the debt arising the Mergers.

In connection with the retirement of the existing debt, the Company recorded a loss on extinguishment of $ 8,563,645 , of which $ 4,911,988 relates to the extinguishment of unamortized financing costs associated with the retired debt obligations, and $ 3,651,657 relates to make-whole fees paid.

The loss on extinguishment is included in other expense on the statement of loss and comprehensive loss for the year ended December 31, 2025.

Unless otherwise specified, all deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan.

1 unchanged sentence

The following table shows a summary of the Company’s long-term debt:

Beginning of year

Beginning of period

Acquired long-term debt (Note 3)

Principal repayments

1 unchanged sentence

( 1,234,000 )

Debt extinguishment

( 109,071,396 )

Deferred financing costs

2 unchanged sentences

Amortization of deferred financing costs

End of period

current portion

2 unchanged sentences

Convertible Debt

On April 28, 2023, the Company closed on a new convertible debt facility which enables the Company to access up to $ 10,000,000 in aggregate principal amount of convertible notes (the “Convertible Notes”).

The convertible facility has a term of three years , with an annual interest rate of 12.0 %, comprised of 6.0 % cash and 6.0 % paid-in-kind.

The initial tranche's principal amount of Convertible Notes outstanding in the amount of $ 2,000,000 , plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into Subordinate Voting Shares of the Company at the option of the holders at any time by written notice to the Company, at a conversion price equal to $ 0.145 .

For each future tranche advanced, the principal amount of Convertible Notes outstanding, plus all paid-in-kind interest and all other accrued but unpaid interest thereunder, is convertible into Subordinate Voting Shares of the Company at the option of the holders at any time by written notice to the Company, at a conversion price equal to the lesser of $ 0.145 or a 20.0 % premium over the 30-day volume weighted average price of the Company’s Subordinate Voting Shares calculated on the day prior to the date on which each tranche is advanced, if permitted by the Canadian Securities Exchange.

The lenders also have the right to advance any remaining undrawn funds on the convertible loan facility to the Company at any time.

If the notes are not converted, the outstanding principal amount and unpaid paid-in-kind interest is due on April 30, 2026.

During the year ended December 31, 2023, the Company closed eight additional tranches of Convertible Notes, which are convertible into Subordinate Voting Shares at a conversion price of $ 0.145 .

Total proceeds received from these tranches amounted to $ 8,000,000 .

In connection with this financing, the Company issued 6,250,000 warrants to purchase Subordinate Voting Shares of the Company to the lenders.

These warrants have a five year term, a strike price of $ 0.145 , and were valued at $ 497,055 (Note 16).

The value of these warrants and other legal and administrative expenses amounting to $ 1,346,793 are treated as deferred financing costs.

On July 31, 2024, the holders voluntarily converted all outstanding convertible notes into 73,016,061 Subordinate Voting Shares of the Company.

On November 1, 2024, the Company entered into a Joinder and Tenth Amendment to Credit Agreement.

The Tenth Amendment provides a convertible note facility (the “New Convertible Notes”) with a maximum principal amount of $ 10,000,000 .

The New Convertible Notes mature November 1, 2027, have a cash interest rate of 12.0 percent per year, are convertible into that number of the Company’s subordinate voting shares determined by dividing the outstanding principal

amount plus all accrued but unpaid interest on the Convertible Notes on the date of such conversion by a conversion price of $ 0.625 .

On July 31, 2024, holders voluntarily converted convertible notes issued in 2023 into 73,016,061 Subordinate Voting Shares of the Company.

On November 1, 2024, the Company entered into the Joinder and Tenth Amendment to the Credit Agreement (the “ Tenth Amendment ”).

The Tenth Amendment provides a convertible note facility (the “ Convertible Notes ”) with a maximum principal amount of $ 10,000,000 .

The Convertible Notes matured on November 1, 2027, had a cash interest rate of 12.0 % per year, and were convertible into the Company’s SVSs at an amount determined by dividing the outstanding principal amount, plus all accrued but unpaid interest on the Convertible Notes on the date of such conversion, by a conversion price of $ 0.625 .

The Company incurred $ 145,717 in financing costs in connection with the signing of the Tenth Amendment.

On July 7, 2025, the Company retired the Convertible Notes, and issued a $ 10,000,000 convertible note (the “ New Convertible Notes ”) to Chicago Atlantic Opportunity Finance, LLC, also with a second priority interest, that matures on October 2, 2028 with an option to extend for an additional year subject to a 1 % extension fee of all Chicago Atlantic loans advanced, has a cash interest rate of Prime Rate (subject to a 7.5 % floor) plus 5.0 % per year, and is convertible into that number of the Company’s subordinate voting shares determined by dividing (i) the sum of (A) the result of $ 10,000,000 minus 50.00 % of the aggregate amount of all the New Convertible Notes repaid plus (B all accrued but unpaid interest on the New Convertible Notes on the date of such conversion by (ii) a conversion price equal to $ 0.625 .

All deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan.

1 unchanged sentence

The following table shows a summary of the Company’s convertible debt:

Beginning of year

Deferred financing costs

Beginning of period

Principal repayments

( 10,100,000 )

Deferred financing costs

Amortization of deferred financing costs

( 9,774,557 )

End of period

current portion

14 unchanged sentences

Shares Issued

During the year ended December 31, 2025, 134,229,986 Subordinate Voting Shares were issued in connection with the Wholesome Merger.

See Note 3 for additional information.

During the year ended December 31, 2025, 196,212,265 Subordinate Voting Shares were issued in connection with the Proper Mergers.

See Note 3 for additional information.

During the year ended December 31, 2025, 251,210,053 Subordinate Voting Shares were issued in connection with the Deep Roots Merger.

See Note 3 for additional information.

During the year ended December 31, 2025, 117,905,205 Subordinate Voting Shares were issued in connection with the Note Purchase Agreements.

See Note 6 for additional information.

During the year ended December 31, 2025, 52,179 Multiple Voting Shares were converted into 5,217,900 Subordinate Voting Shares for no additional consideration.

During the year ended December 31, 2025, employee stock options were exercised for 723,165 Subordinate Voting Shares.

Proceeds from this transaction were $ 121,721 .

During the year ended December 31, 2025, warrants were exercised for 265,626 Subordinate Voting Shares.

Proceeds from these transactions were $ 38,516 .

During the year ended December 31, 2025 , 22,805,897 shares were issued in connection with the settlement of RSUs.

8,951,207 shares were witheld to pay payroll taxes associated with the issuance, resulting in the final issuance of 13,854,690 shares.

During the year ended December 31, 2024, 45,822 Multiple Voting Shares were converted into 4,582,200 Subordinate Voting Shares for no additional consideration.

During the year ended December 31, 2024, 129,536,875 Subordinate Voting Shares were issued in connection with the execution of definitive subscription agreements with certain investors.

4 unchanged sentences

Of these 6,400,000 shares, 360,000 shares were net settled to pay payroll taxes associated with the issuance, resulting in the final issuance of 6,040,000 shares.

During the year ended December 31, 2024, 1,300,078 Subordinate Voting Shares were issued to the Company’s senior secured lender, Chicago Atlantic Opportunity Portfolio, LP, for $ 700,000 of proceeds.

During the year ended December 31, 2024, 1,300,078 Subordinate Voting Shares were issued to the Company’s then senior secured lender, Chicago Atlantic Opportunity Portfolio, LP, for $ 700,000 of proceeds.

During the year ended December 31, 2024, the holders of the Company’s Convertible Notes voluntarily converted all outstanding Convertible Notes into 73,016,061 Subordinate Voting Shares of the Company.

3 unchanged sentences

Proceeds from these transactions were $ 69,663 .

During the year ended December 31, 2023, the Company issued the 15,000,000 Subordinate Voting Shares to its senior secured lender, Chicago Atlantic Admin, LLC, an affiliate of Green Ivy Capital, and a group of lenders in connection with the fifth amendment to its Credit Facility signed on March 31, 2023 (Note 14).

During the year ended December 31, 2023, 65,411 Super Voting Shares were redeemed for 6,541,100 Subordinate Voting Shares.

During the year ended December 31, 2023, 17,449 Multiple Voting Shares were redeemed for 1,744,900 Subordinate Voting Shares.

Stock-Based Compensation

1 unchanged sentence

In January 2019, the Company adopted the 2019 Equity Incentive Plan under which the Company may grant incentive stock option, restricted shares, restricted share units (“RSUs”), or other awards.

Under the terms of the plan, a total of ten percent of the number of shares outstanding assuming conversion of all super voting and multiple voting shares to subordinate voting shares are permitted to be issued.

Under the terms of the plan, a total of ten percent of the number of shares outstanding are permitted to be issued assuming conversion of all multiple voting shares to subordinate voting shares.

The exercise price for incentive stock options issued under the plan will be set by the committee but will not be less than 100 % of the fair market value of the Company’s shares on the date of grant.

Incentive stock options have a maximum term of 10 years from the date of grant.

stock options have a maximum term of 10 years from the date of grant.

The incentive stock options vest at the discretion of the Board.

16 unchanged sentences

( 2,760,530 )

Balance, December 31, 2023

Options Outstanding at December 31, 2024

( 2,955,723 )

9 unchanged sentences

Multiple Voting Share (MVS) warrants entitle the holder to purchase one multiple voting share of the Company.

Warrants issued were valued using the Black-Scholes option pricing model with the following assumptions:

Risk-Free Interest Rate

Expected Life (years)

Expected Annualized Volatility

Exercise Price

Grant Date Fair Value

Expected Forfeiture Rate

Expected Dividend Yield

A summary of the warrants outstanding is as follows:

12 unchanged sentences

Remaining Life

Warrants outstanding at December 31, 2022

Warrants outstanding at December 31, 2023

Warrants outstanding at December 31, 2024

Warrants exercisable at December 31, 2024

During the year ended December 31, 2023, in connection with the closing of the convertible debt facility (Note 15), the Company issued 6,250,000 warrants to purchase Subordinate Voting Shares of the Company to the lenders.

These warrants have a five-year term, a strike price of $ 0.145 , and were valued at $ 497,055 .

The value of these warrants were treated as deferred financing costs.

All deferred financing costs are treated as a contra-liability, to be netted against the outstanding loan balance and amortized over the remaining life of the loan.

On May 25, 2023, the Company and Grown Rogue International, Inc.

(“Grown Rogue”) entered into a strategic agreement whereby Grown Rogue will support Vireo in the optimization of its cannabis flower products, with a particular focus on improving the quality and yield of top-grade “A” cannabis flower across its various operating markets, starting with Maryland and Minnesota.

As part of this strategic agreement the Company issued 10,000,000 warrants to purchase subordinate voting shares of Vireo to Grown Rogue, with a strike price equal to $ 0.233 .

During the year ended December 31, 2024, $ 0 (2023 - $ 1,233,560 ) in stock-based compensation was recorded in connection with the issuance of these SVS warrants.

The expense associated with RSUs is based on the closing price of the Company’s Subordinate Voting Shares on the business day immediately preceding the grant date, adjusted for the absence of future dividends and is amortized on a straight-line basis over the periods during which the restrictions lapse.

The Company currently has RSUs that vest over a three year period.

The awards are generally subject to forfeiture in the event of termination of employment.

Warrants outstanding at December 31, 2024 and 2025

Warrants exercisable at December 31, 2024 and 2025

The expense associated with RSUs is generally based on the closing price of the Company’s Subordinate Voting Shares on the business day immediately preceding the grant date, adjusted for the absence of future dividends, and is amortized on a straight-line basis over the period during which the awards are expected to vest.

The Company granted 21,825,000 RSUs to senior management that vest upon the achievement of specified stock price thresholds of $ 0.85 and $ 1.05 per share, for which the value was estimated at the grant date using a Monte Carlo simulation model using a volatility of approximately 100 %.

The expense is recognized over the derived service period of approximately three years .

The Company has also granted 28,500,000 RSUs to senior management that vest upon the achievement of specified Adjusted EBITDA performance thresholds of $ 150 million, $ 165 million, and $ 205 million.

Compensation expense for these awards is recognized when achievement of the performance conditions is considered probable and is recognized over the implied service period of approximately 2 - 3 years .

During the years ended December 31, 2025 and 2024, the Company recognized $ 18,057,262 and $ 1,030,930 , respectively, in stock-based compensation expense related to RSUs.

4 unchanged sentences

Balance, December 31, 2024

( 22,805,897 )

Balance, December 31, 2025

18 unchanged sentences

The Preliminary Suitability Application is currently set for hearing on June 15 and 16, 2025.

The damages sought will be significant and material given that Verano’s breach left the Company in a vulnerable position resulting in the Company being constrained in its ability to fund growth initiatives that were desirable and that its competitors were able to undertake, most notably in Minnesota and New York markets.

On October 29, 2025, the Company reached a comprehensive settlement (the “Settlement Agreement”) dismissing all outstanding litigation matters between the Company and Verano that are pending before the Supreme Court of British Columbia, Canada.

The terms of the Settlement Agreement were approved by the respective Boards of Directors of both Companies.

The value of the settlement to Vireo is $ 9,172,587 consisting of the acquisition of $ 8,172,587 of real property and $ 1,000,000 in cash.

Lease commitments

13 unchanged sentences

The fair value was derived from a black-scholes valuation using a stock price of $ 0.52 , an exercise price of $ 0.164 , an expected life of 2.76 years, an annual risk free rate of 3.73 %, and volatility of 100 %.

The change in valuation from December 31, 2023, to December 31, 2024, of $ 333,612 was recorded as other income in the statement of net loss and comprehensive loss for the year ended December 31, 2024.

The change in valuation from December 31, 2025, to December 31, 2024, of $ 586,273 was recorded as other expense in the statement of net loss and comprehensive loss for the year ended December 31, 2024.

In connection with the Settlement Agreement (Note 17), the Company received cash proceeds of $ 1,000,000 and real property valued at $ 8,172,587 , which were recognized as other income during the year ended December 31, 2025.

General and Administrative Expenses

3 unchanged sentences

Insurance expenses

Occupancy costs

Other expenses

1 unchanged sentence

The Company utilized the guidance in ASC 280 to determine how many reportable segments the Company has.

We considered various attributes of the overall Company including but not limited to the nature of products and services, the nature of production processes, the types of customers, the regulatory environment, business geography, and the level at which the Chief Operating Decision Maker evaluates the performance and allocates resources.

Given the similarities in the types of products, cannabis products in various form factors, the types of customers, retail and wholesale customers, the geography and regulatory environment in which sales are made, the United States, and the Chief Operating Decision Maker, the Chief Executive Officer, assesses performance and allocates resources at the consolidated level, the Company has determined that it only has one reportable segment, cannabis.

The Company’s Chief Executive Officer is the Company’s chief operating decision maker.

The chief operating decision maker assesses performance for the cannabis segment and decides how to allocate resources based on operating profit and net income that also is reported on the income statement as consolidated net income.

We considered various attributes of the overall Company including but not limited to the nature of products and services, the nature of production processes, the types of customers, the regulatory environment, business geography, and the level at which the CODM evaluates the performance and allocates resources.

Given the similarities in the types of products sold, cannabis products in various form factors, the types of customers, retail and wholesale customers, the geography and

regulatory environment in which sales are made, the United States, and that the CODM, the Chief Executive Officer, assesses performance and allocates resources at the consolidated level, the Company has determined that it only has one reportable segment, cannabis.

The CODM assesses performance for the cannabis segment and decides how to allocate resources based on operating profit and net income that also is reported on the income statement as consolidated net income.

The measure of segment assets is reported on the balance sheet total as consolidated assets.

The chief operating decision maker uses net income to evaluate income generated from segment assets in deciding the appropriate capital allocation strategy.

A comparison of budgeted results to actual results is also used by the chief operating decision maker to assess business performance.

The CODM uses net income to evaluate income generated from segment assets in deciding the appropriate capital allocation strategy.

A comparison of budgeted results to actual results is also used by the CODM to assess business performance.

The Company’s cannabis segment cultivates, processes and distributes medical and adult-use cannabis products in a variety of formats, as well as related accessories in the United States.

1 unchanged sentence

The accounting policy for recording revenue, and all other accounting policies, are the same as those described in the summary of significant accounting policies footnote (Note 2).

The financial statements of the cannabis segment are presented in Item 8 of this form 10-K.

For financial reporting purposes, loss before income taxes includes the following components:

5 unchanged sentences

( 16,894,509 )

The (recoveries) expenses for income taxes consists of:

Years ended December 31,

Loss before income taxes:

( 16,894,509 )

( 17,824,089 )

Income tax benefits at statutory rate

( 3,547,846 )

( 3,743,059 )

A reconciliation of the federal statutory income tax rate percentage to the effective tax rate after adoption of ASU 2023-09 is as follows:

December 31, 2025

US federal statutory rate

( 6,361,721 )

State and local taxes, net of federal income tax effect (1)

( 4,234,000 )

Non-deductible expenses

Stock based and other compensation

Warrant income

Executive compensation limitation

Acquisition transaction costs

Change in valuation allowance

Uncertain Tax Position

Uncertain Tax Position - Federal

Uncertain Tax Position - penalties and interest

Federal true up

Other adjustments

Effective tax rate

(1) State taxes in Maryland and Minnesota made up the majority (greater than 50%) of the tax effect in this category for the year ended December

A reconciliation of the federal statutory income tax rate percentage to the effective tax rate prior to the adoption of ASU 2023-09 is as follows:

December 31, 2024

US federal statutory rate

( 3,547,846 )

State and local taxes, net of federal income tax effect

( 1,510,248 )

State true up

Non-deductible expenses

Stock based and other compensation

Change in valuation allowance

Uncertain Tax Position - Federal

Uncertain Tax Position - penalties and interest

( 2,450,194 )

Rate true up and other

Income tax expense, net

Other adjustments

Effective tax rate

The following table summarizes the components of deferred tax:

10 unchanged sentences

Employee Retention Tax Credit

Derivative liability

Charitable contribution carryforward

Share based compensation

6 unchanged sentences

Finance lease asset

Installment sale

Investments in partnerships

Intangible assets

Unrealized gain

Warrants receivable

1 unchanged sentence

Net deferred tax asset/(tax liabilities)

At December 31, 2024, the Company had United States federal net operating loss carryforwards of approximately $ 28,100,000 that can be carried forward indefinitely and are limited in annual use to 80 % of current year taxable income, and state net operating loss carryforwards of approximately $ 39,000,000 that can be carried forward fifteen years .

( 10,217,000 )

At December 31, 2025, the Company had United States federal net operating loss carryforwards of approximately $ 19,200,000 on a non-280E basis that can be carried forward indefinitely and are limited in annual use to 80 % of current year taxable income, and state net operating loss carryforwards of approximately $ 27,000,000 that can be carried forward fifteen years .

State net operating loss carryforwards begin to expire on December 31, 2034.

11 unchanged sentences

The Company evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions.

The measurement of the uncertain tax position is based on the largest

benefit amount to be realized upon settlement of the matter.

The measurement of the uncertain tax position is based on the largest benefit amount to be realized upon settlement of the matter.

If payment ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary.

1 unchanged sentence

As of December 31, 2025 and 2024, the Company recorded an uncertain tax liability for uncertain tax positions primarily related to the treatment of certain transactions and deductions under IRC Section 280E based on legal interpretations that challenge the Company’s tax liability under IRC Section 280E.

The Company and its subsidiaries filed the 2023 tax return and amended tax returns for periods ending 2020 through 2022, to reflect this position.

The Company and its subsidiaries filed the 2024 and 2023 tax return and amended tax returns for periods ending 2020 through 2022, to reflect this position.

The Company does not expect any resolution to this uncertain tax position in the next 12 months.

14 unchanged sentences

Credit risk is the risk of loss associated with counterparty’s inability to fulfill its payment obligations.

The Company’s credit risk is primarily attributable to cash, accounts receivable, and deposits.

The Company’s credit risk is primarily attributable to cash, accounts receivable, notes receivable, and deposits.

A small portion of cash is held on hand, from which management believes the risk of loss is remote.

Trade receivables relate primarily to wholesale sales.

Trade receivables relate primarily to wholesale revenues.

The Company does not have significant credit risk with respect to customers.

The Company’s maximum credit risk exposure is equivalent to the carrying value of these instruments.

The Company has been granted licenses pursuant to the laws of the states of Maryland, Minnesota, and New York with respect to cultivating, processing, and/or distributing marijuana.

The Company has been granted licenses pursuant to the laws of the states of Maryland, Minnesota, New York, Utah, Nevada, and Missouri with respect to cultivating, processing, and/or distributing marijuana.

Presently, this industry is illegal under United States federal law.

The Company has, and intends, to adhere strictly to the state statutes in its operations.

The Company has, and will continue to, adhere strictly to the state statutes in its operations.

Liquidity risk

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due.

As of December 31, 2024, the Company’s financial liabilities consist of accounts payable and accrued liabilities, debt and convertible debt.

As of December 31, 2025, the Company’s financial liabilities consist of accounts payable and accrued liabilities, lease liabilities, debt, and convertible debt.

The Company manages liquidity risk by reviewing its capital requirements on an ongoing basis.

1 unchanged sentence

The Company’s access to financing is always uncertain.

There can be no assurance of continued access to significant equity financing.

There can be no assurance of continued access to significant equity or debt financing.

operates in the United States.

3 unchanged sentences

Under United States federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of accepted safety for the use of the drug under medical supervision.

The United States Food and Drug Administration has not approved marijuana as a safe and effective drug for any indication.

As noted above, the state-legal cannabis trade will likely remain illegal under federal law immediately following any rescheduling of marijuana to Schedule III and is likely to continue to face regulatory oversight from the FDA.

The FDA has not approved marijuana as a safe and effective drug for any indication.

In the United States marijuana is largely regulated at the state level.

5 unchanged sentences

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company currently carries variable interest-bearing debt subject to fluctuations in the United States Prime rate.

A change of 100 basis points in interest rates during the year ended December 31, 2024, would have resulted in a corresponding change in the statement of net loss and comprehensive loss of $ 603,535 .

The Company currently carries variable interest-bearing debt subject to fluctuations in the United States Prime rate and the Secured Overnight Financing Rate.

However, management believes that the impact of reasonably possible changes in interest rates on the Company’s consolidated results of operations and cash flows would not be material.

Related Parties Transactions

1 unchanged sentence

Details surrounding the lending relationships between the Company and Chicago Atlantic, are described in Notes 13 and 14.

During the years ended December 31, 2024 and 2023, the Company paid Chicago Atlantic $ 712,720 and $ 0 , respectively, for services rendered in connection with the Mergers (Note 3), which is included in transaction related expenses in the consolidated statement of net loss and comprehensive loss for the year ended December 31, 2024.

For the years ended December 31, 2024, and 2023, the Company paid a related party (Bengal Impact Partners, of which Joshua Rosen, who is the Company’s Chief Executive Officer, Interim Chief Financial Officer, and a member of the Company’s Board of Directors, is a managing partner) $ 0 and $ 1,613 , respectively, for ongoing corporate advisory services.

During the years ended December 31, 2025 and 2024, the Company paid Chicago Atlantic $ 0 and $ 712,720 , respectively, for services rendered in connection with the Mergers (Note 3), which is included in transaction related expenses in the consolidated statement of net loss and comprehensive loss.

During the year ended December 31, 2025, the Company issued restricted stock units (“RSUs”) to certain consultants affiliated with Chicago Atlantic in exchange for services rendered.

The resulting share-based compensation expense was not material to the Company’s financial statements.

Subsequent Events

On January 23, 2025, the Company entered into a letter agreement (the “ Letter Agreement ”) with Bill’s Nursery, Inc., whereby the parties agreed to extend the Exclusivity Period, as defined in that certain Memorandum of Understanding (“ MOU ”) effective as of December 18, 2024 between the parties, from January 24, 2025 to February 23, 2025.

Except as so modified, the parties’ obligations under the MOU remain otherwise unchanged.

On February 21, 2025, the Company entered into a letter agreement (the “ Second Letter Agreement ”) with Bill’s Nursery, Inc., whereby the parties confirmed that they have paused negotiations concerning the Definitive Agreement, as defined in the MOU effective as of December 18, 2024 between the parties.

The parties also agreed in the Second Letter Agreement to amend the provision in Section 4 of the MOU providing that, in the case the parties do not execute and deliver a Definitive Agreement, that Bill’s Nursery, Inc.

shall pay to the Company US$ 1.25 million within two business days.

The Second Letter Agreement amends Section 4 to provide that such payment shall be in the amount of US$ 1 million to be paid within 45 calendar days.

Except as so modified, the parties’ obligations under the MOU remain otherwise unchanged.

In January of 2025, the Company granted 3,989,414 RSUs and 159,156 employee stock options under the 2019 Equity Incentive Plan.

On October 10, 2025, a wholly owned subsidiary of the Company entered into a restructuring support agreement (“RSA”) with Schwazze and certain related entities in connection with the Company’s acquisition of a majority of the outstanding principal amount of Schwazze’s 13.00 % Senior Secured Convertible Notes due December 7, 2026, which are included in notes receivable in the consolidated balance sheet as of December 31, 2025.

The RSA contemplates a restructuring of Schwazze and its subsidiaries, including the sale of certain assets through a public disposition of collateral pursuant to the Uniform Commercial Code.

On November 13, 2025, a public auction of collateral was completed, at which the credit bid made on behalf of VHC and the other noteholders was the winning bid.

Following the public auction, Schwazze entered into an asset purchase agreement with a newly formed entity that as of the closing of the transactions is expected to be majority owned by the Company, pursuant to which, subject to regulatory approvals and other customary closing conditions, the assets subject to the asset purchase agreement are expected to be transferred in exchange for the assumption of certain specified liabilities and the discharge of the senior secured notes included in the credit bid.

The transaction had not closed as of December 31, 2025.

Accordingly, no assets related to the contemplated asset transfer have been recognized in the accompanying consolidated financial statements.

On December 16, 2025, the Company entered into an asset purchase agreement through a wholly owned subsidiary to acquire certain assets and properties used in cannabis dispensaries operated in the State of Colorado owned by PharmaCann.

Under the terms of the agreement, the Company will issue subordinate voting shares with an estimated value of $ 49,000,000 and assume certain liabilities as consideration for the acquired assets.

The share consideration is subject to certain adjustments.

In connection with the transaction, the Company entered into a management services agreement to provide management services related to the dispensaries through the closing date.

The transaction is subject to customary closing conditions and had not closed as of December 31, 2025.

Accordingly, no amounts related to the transaction have been recognized in the accompanying consolidated financial statements.

On December 22, 2025, the Company entered into an agreement and plan of merger to acquire Eaze Inc.

(“Eaze”) in a business combination transaction.

Pursuant to the agreement, following the closing of the transaction, the Company will issue subordinate voting shares as consideration for all of the issued and outstanding equity interests of Eaze.

The estimated closing consideration is approximately $ 47,000,000 , subject to customary post-closing adjustments.

The merger agreement also provides for potential earnout consideration payable in the Company’s subordinate voting shares based on Eaze’s future financial performance, subject to contractual limitations.

The transaction is subject to customary closing conditions, including regulatory approvals and approval by Eaze’s stockholders, and had not closed as of December 31, 2025.

Accordingly, no amounts related to the transaction have been recognized in the accompanying consolidated financial statements.

On January 28, 2026, the Company entered into a nonbinding MOU with Scotts Miracle-Gro related to the potential acquisition of The Hawthorne Gardening Company.

The Hawthorne Gardening Company is a non-plant touching entity, and is not subject to 280E.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data