What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2024-11-13 · 168 added, 271 removed, 484 unchanged (48% of the section changed)

3 unchanged sentences

(In U.S Dollars, unaudited)

September 30,

Current assets:

2 unchanged sentences

Prepayments and other current assets

Notes receivable, current

Warrants held

17 unchanged sentences

Commitments and contingencies (refer to Note 16)

Stockholders’ deficiency

Stockholders’ equity (deficiency)

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

200,464,196 shares issued and outstanding at September 30, 2024 and 110,007,030 at December 31, 2023)

339,475,288 shares issued and outstanding at March 31, 2025 and 337,512,681 at December 31, 2024)

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

298,314 shares issued and outstanding at September 30, 2024 and 331,193 at December 31, 2023)

Super Voting Shares ($- par value;

unlimited shares authorized;

0 shares issued and outstanding at September 30, 2024 and December 31, 2023)

278,170 shares issued and outstanding at March 31, 2025 and 285,371 at December 31, 2024)

Additional paid in capital

2 unchanged sentences

( 231,435,561 )

Total stockholders' deficiency

( 11,003,227 )

( 16,043,649 )

Total liabilities and stockholders' deficiency

Total stockholders' equity (deficiency)

Total liabilities and stockholders' equity (deficiency)

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

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of sales

2 unchanged sentences

Operating expenses:

Selling, general and administrative

Selling, general and administrative expenses

Transaction related expenses

Stock-based compensation expenses

2 unchanged sentences

Other income (expense):

Gain (loss) on disposal of assets

( 2,798,567 )

Interest expenses, net

1 unchanged sentence

( 8,722,637 )

( 23,604,746 )

( 22,795,242 )

Gain (loss) on disposal of assets

Other income (expenses)

2 unchanged sentences

( 7,525,904 )

( 19,941,142 )

( 19,427,337 )

Loss before income taxes

1 unchanged sentence

( 2,766,460 )

( 5,536,228 )

( 14,229,381 )

Current income tax expenses

1 unchanged sentence

( 3,945,000 )

( 6,770,000 )

( 7,357,871 )

Deferred income tax recoveries

Net loss and comprehensive loss

1 unchanged sentence

( 6,711,460 )

( 12,306,228 )

( 20,964,252 )

Net loss per share - basic and diluted

10 unchanged sentences

( 203,428,052 )

( 16,043,649 )

Conversion of MVS shares

Conversion of Super Voting Shares

Stock-based compensation

Warrants issued in financing activities

Shares issued in financing activities

( 6,711,460 )

Balance at September 30, 2023

Balance at March 31, 2024

( 210,139,512 )

2 unchanged sentences

( 231,435,561 )

( 16,043,649 )

Conversion of MVS shares

Stock-based compensation

Stock issuance

Net settlement of stock-based compensation

Options exercised

Warrants exercised

Shares issued

Conversion of convertible debt

( 6,508,790 )

Balance at September 30, 2024

( 215,734,280 )

( 11,003,227 )

Super Voting Shares

Additional Paid-

Stockholders'

Equity (deficiency)

Balance, July 1, 2023

( 193,616,189 )

( 7,924,810 )

Conversion of MVS shares

Conversion of Super Voting Shares

Stock-based compensation

Shares issued in financing activities

( 5,229,026 )

Balance at September 30, 2023

( 198,845,215 )

( 12,853,399 )

Balance, July 1, 2024

( 210,807,922 )

( 22,558,798 )

Conversion of MVS shares

Stock-based compensation

Warrants exercised

Shares issued

Conversion of convertible debt

( 4,926,358 )

Balance at September 30, 2024

( 215,734,280 )

Balance at March 31, 2025

( 237,944,351 )

3 unchanged sentences

Dollars, unaudited)

For the Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

8 unchanged sentences

Stock-based payments

Warrants receivable

( 1,566,445 )

Warrants held

1 unchanged sentence

Interest Expense

Bad debt expense

Deferred income tax

Loss on disposal of Red Barn Growers

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

Loss (gain) on disposal of assets

8 unchanged sentences

( 3,495,266 )

Net cash provided by (used in) operating activities

( 1,037,417 )

CASH FLOWS FROM INVESTING ACTIVITIES:

PP&E Additions

Net cash used in operating activities

( 3,322,822 )

( 1,190,332 )

Proceeds from note receivable (Note 6)

Intangible license additions

CASH FLOWS FROM INVESTING ACTIVITIES:

PP&E Additions

( 1,146,777 )

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

Net cash used in investing activities

( 1,146,777 )

1 unchanged sentence

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term debt, net of issuance costs

Proceeds from convertible debt, net of issuance costs

Proceeds from issuance of shares

Proceeds from warrant exercises

2 unchanged sentences

( 1,050,000 )

( 1,976,362 )

Lease principal payments

Net cash used in financing activities

( 1,121,066 )

Net cash provided by (used in) financing activities

Net change in cash

13 unchanged sentences

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 Arizona and New Mexico.

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

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

2 unchanged sentences

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

Update on Verano Litigation (Note 16)

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

1 unchanged sentence

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.

On May 2, 2024, the Company filed a Notice of Application (the " Summary Trial Application ") with the Supreme Court of British Columbia seeking 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.

On June 19, 2024, Verano filed a Notice of Application (the “ Preliminary Suitability Application ”) seeking orders dismissing the Summary Trial Application on the basis that certain issues in the action are not suitable for summary determination.

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

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.

The termination of the Arrangement Agreement gives rise to substantial doubt about the Company’s ability to continue as a going concern.

Company management is working with the Company’s lenders, counsel, and other applicable parties to implement a plan to effectively mitigate the conditions giving rise to substantial doubt.

Elements of this plan may include, but are not limited to, asset sales, debt restructuring, and capital raises.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

However, the Company’s continuance as a going concern is dependent on its future profitability and implementation of the aforementioned plan.

The Company may not be successful in these efforts.

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).

Summary of Significant Accounting Policies

Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the United States Securities and Exchange Commission (“ SEC ”) on April 1, 2024, (the " Annual Financial Statements "), as amended on April 29, 2024.

The Company’s significant accounting policies are described in Note 2 to the Company’s consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the United States Securities and Exchange Commission (“ SEC ”) on March 4, 2025, (the " Annual Financial Statements ").

There have been no material changes to the Company’s significant accounting policies.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements reflect the accounts of the Company.

The accompanying interim unaudited condensed consolidated financial statements reflect the accounts of the Company.

The information included in these statements should be read in conjunction with the Annual Financial Statements.

6 unchanged sentences

Basis of consolidation

These unaudited condensed consolidated financial statements include the accounts of the following entities wholly owned, or effectively controlled by the Company during the period ended September 30, 2024:

Name of entity

Place of incorporation

EHF Cultivation Management, LLC

Elephant Head Farm, LLC

Minnesota, USA

2 unchanged sentences

Massachusetts, USA

Minnesota Medical Solutions, LLC

Vireo Health of Minnesota, LLC

Minnesota, USA

3 unchanged sentences

Delaware, USA

Retail Management Associates, LLC

Verdant Grove, Inc.

2 unchanged sentences

Vireo Health of Nevada 1, LLC

Vireo Health of New Mexico, LLC

Delaware, USA

Vireo Health of New York, LLC

6 unchanged sentences

Maryland, USA

Vireo DR Merger Sub Inc.

Delaware, USA

Vireo WH Merger Sub Inc.

Delaware, USA

Vireo PR Merger Sub Inc.

Delaware, USA

Vireo PR Merger Sub II Inc.

Delaware, USA

2178 State Highway 29A LLC

New York, USA

XAAS Agro, Inc.

The entities listed 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 Company's unaudited condensed consolidated financial statements.

Red Barn Growers, Inc.

and all New Mexico assets and liabilities were divested in June of 2023.

Recently adopted accounting pronouncements

3 unchanged sentences

Diluted net loss per share is computed by dividing net loss by the sum of the weighted average number of common shares and the number of potential dilutive common share equivalents outstanding during the period.

dilutive common share equivalents consist of the incremental common shares issuable upon the exercise of vested share options and the incremental shares issuable upon conversion of the convertible notes.

Potential dilutive common share equivalents consist of the incremental common shares issuable upon the exercise of vested share options and the incremental shares issuable upon conversion of the convertible notes.

Potential dilutive common share equivalents consist of stock options, warrants, and restricted stock units.

In computing diluted earnings per share, common share equivalents are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive.

The Company recorded a net loss for the three and nine month periods ended September 30, 2024, and 2023, presented in these financial statements, and as such there is no difference between the Company’s basic and diluted net loss per share for these periods.

The anti-dilutive shares outstanding for the nine month periods ended September 30, 2024, and 2023 were as follows:

September 30,

The Company recorded a net loss for the three month periods ended March 31, 2025 and 2024, presented in these financial statements, and as such there is no difference between the Company’s basic and diluted net loss per share for these periods.

The anti-dilutive shares outstanding for the three month periods ended March 31, 2025 and 2024, were as follows:

Three Months Ended

Stock options

5 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

New accounting pronouncements not yet adopted

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 has not adopted the standard for the interim periods presented herein, but will adopt the standard on or before December 31, 2024.

This ASU will result in additional required disclosures when adopted, where applicable.

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.

Business Combinations and Dispositions

On December 18, 2024, Vireo Growth Inc.

(the “Company”), entered into Merger Agreements 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 March 31, 2025, 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.

(“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 dated March 21, 2025, was 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 approvals required under the rules of the Canadian Stock Exchange, which was obtained by written consent of the stockholders.

Assets Held for Sale

As of September 30, 2024, the Company 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.

As of March 31, 2025, the Company 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.

3 unchanged sentences

Assets held for sale

September 30,

Property and equipment

6 unchanged sentences

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 $ 12,152,587 and $ 10,099,014 for the nine months ended September 30, 2024 and 2023, respectively.

Pre-tax operating losses attributable to the New York business were $ 4,859,841 and $ 3,698,934 for the three months ended March 31, 2025 and 2024, 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.

No indicators of impairment existed as of September 30, 2024, and therefore no impairment charges were recorded.

No indicators of impairment existed as of March 31, 2025, and therefore no impairment charges were recorded.

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 notes receivable, long-term debt, and convertible debt approximates fair value as they bear a market rate of interest.

3 unchanged sentences

Trade receivables are comprised of the following items:

September 30,

Trade receivable

Trade receivable, net

Tax withholding receivable

Included in the trade receivables, net balance at September 30, 2024, and December 31, 2023, is an allowance for doubtful accounts of $ 99,736 and $ 95,686 , respectively.

Included in the tax withholding receivable, net balance at September 30, 2024, and December 31, 2023, is an allowance for doubtful accounts of $ 159,275 .

Notes Receivable

As of September 30, 2024, the Company had $ 0 (December 31, 2023 - $ 3,750,000 ) in notes receivable.

During the nine months ended September 30, 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 unaudited condensed consolidated statements of net loss and comprehensive loss.

Included in the trade receivables, net balance at March 31, 2025, and December 31, 2024, is an allowance for doubtful accounts of $ 84,990 and $ 84,989 , respectively.

Included in the tax withholding receivable, net balance at December 31, 2024, is an allowance for doubtful accounts of $ 159,275 .

Inventory is comprised of the following items:

3 unchanged sentences

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

Three Months Ended September 30,

Nine Months Ended September 30,

Work-in-progress

2 unchanged sentences

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

September 30,

Prepaid Insurance

9 unchanged sentences

( 10,319,975 )

For the nine months ended September 30, 2024, and 2023, total depreciation on property and equipment was $ 1,901,198 and $ 2,223,540 , respectively.

For the nine months ended September 30, 2024, and 2023, accumulated amortization of the right of use asset under finance lease amounted to $ 2,408,998 and $ 2,221,116 , respectively.

For the three months ended March 31, 2025, and 2024, total depreciation on property and equipment was $ 622,364 and $ 633,728 , respectively.

For the three months ended March 31, 2025, and 2024, accumulated amortization of the right of use asset under finance lease amounted to $ 2,594,332 and $ 2,507,998 , respectively.

The right of use asset under finance lease of $ 7,572,566 consists of leased processing and cultivation premises.

The Company capitalized into inventory $ 1,678,435 and $ 1,846,419 relating to depreciation associated with manufacturing equipment and production facilities for the nine months ended September 30, 2024, and 2023, respectively.

The Company capitalized into inventory $ 545,262 and $ 560,180 relating to depreciation associated with manufacturing equipment and production facilities for the three months ended March 31, 2025, and 2024, respectively.

The capitalized depreciation costs associated are added to inventory and expensed through cost of sales product cost on the unaudited condensed consolidated statements of net loss and comprehensive loss.

As of September 30, 2024 and 2023, in conjunction with the Company’s held for sale assessment and disposal of certain long-lived assets, 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 of March 31, 2025 and 2024, in conjunction with the Company’s held for sale assessment and disposal of certain long-lived assets, 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 no impairment charge on property and equipment, net.

Components of lease expenses are listed below:

September 30,

Finance lease cost

Amortization of ROU assets

Depreciation of ROU assets

Interest on lease liabilities

4 unchanged sentences

Finance Leases

September 30, 2024

March 31, 2025

Total minimum lease payments

10 unchanged sentences

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

Per the terms of the lease the landlord agreed to provide the Company with $ 2,000,000 of tenant improvement allowances.

Rent will not commence until January 1, 2025, at which time monthly base rent will be $ 82,500 .

Rent commenced 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.

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.

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

Supplemental cash flow information related to leases:

September 30,

Three Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

4 unchanged sentences

Other information about lease amounts recognized in the financial statements:

September 30,

Three Months Ended

Weighted-average remaining lease term (years) – operating leases

6 unchanged sentences

Balance, December 31, 2024

Balance, September 30, 2024

Amortization expense for intangibles was $ 204,813 and $ 614,437 during the three and nine months ended September 30, 2024, respectively, and $ 204,813 and $ 523,607 during the three and nine months ended September 30, 2023, respectively.

The Company capitalized into inventory $ 24,778 (2023 - $ 24,779 ) and $ 74,336 (2023 - $ 24,779 ) of amortization for the three and nine months ended September 30, 2024, respectively.

Balance, March 31, 2025

Amortization expense for intangibles was $ 204,810 and $ 204,812 during the three months ended March 31, 2025 and 2024, respectively.

The Company capitalized into inventory $ 24,778 (2024 - $ 24,778 ) of amortization for the three months ended March 31, 2024, respectively.

Amortization expense is recorded in operating expenses on the unaudited condensed consolidated statements of net loss and comprehensive loss.

2 unchanged sentences

Accounts payable and accrued liabilities are comprised of the following items:

September 30,

Accounts payable – trade

7 unchanged sentences

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 repaid the note in full during the nine months ended September 30, 2024.

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.

2 unchanged sentences

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

The remaining principal balance of $ 1,000,000 is due on November 19, 2024 , and the note is secured by 25 % of the membership interests in Vireo Health of Charm City, LLC.

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 was repaid in full during the three months ended March 31, 2025.

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.

1 unchanged sentence

prime rate plus 10.375 %, payable monthly in cash, and (b) 2.75 % per annum paid in kind (“ PIK ”) 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 loss and comprehensive loss for the nine months ended September 30, 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 and a maturity date of November 29, 2024.

16 unchanged sentences

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, adjusts and

extends the deadline with respect to the Company’s ongoing disposition of its New York operations through July 31, 2025, and amends certain financial measure definitions and covenants within the agreement.

The ninth amendment to the Company’s Credit Facility extends the maturity date on the Credit Facility loans to January 29, 2027, adjusts and extends the deadline with respect to the Company’s ongoing disposition of its New York operations through July 31, 2025, 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.

1 unchanged sentence

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.

As of September 30, 2024, $ 5,089,311 (December 31, 2023 - $ 1,524,531 ) of deferred financing costs remain unamortized.

As of March 31, 2025, $ 5,704,752 (December 31, 2024 - $ 6,576,985 ) of deferred financing costs remain unamortized.

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

September 30,

Beginning of period

Beginning of year

Principal repayments

( 1,234,000 )

( 2,976,362 )

Deferred financing costs

( 7,418,770 )

( 1,407,903 )

Amortization of deferred financing costs

End of period

current portion

Total long-term debt

As of September 30, 2024, stated maturities of long-term debt were as follows:

As of March 31, 2025, stated maturities of long-term debt were as follows:

Convertible Notes

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 % PIK.

The initial tranche's principal amount of Convertible Notes outstanding in the amount of $ 2,000,000 , plus all PIK 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 PIK 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 PIK 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 .

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, 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 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 .

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

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.

As of September 30, 2024, $ 0 (December 31, 2023 - $ 1,083,697 ) of deferred financing costs remain unamortized.

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

As of March 31, 2025, $ 125,472 (December 31, 2024 - $ 137,622 ) of deferred financing costs remain unamortized.

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

September 30,

Beginning of period

Deferred financing costs

( 1,346,793 )

Amortization of deferred financing costs

4 unchanged sentences

Stockholders’ Equity

The Company’s certificate of incorporation authorized the Company to issue the following classes of shares with the following par value and voting rights as of September 30, 2024.

The Company’s certificate of incorporation authorized the Company to issue the following classes of shares with the following par value and voting rights as of March 31, 2025.

The liquidation and dividend rights are identical among shares equally in the Company’s earnings and losses on an as converted basis.

4 unchanged sentences

100 votes for each share

Super Voting Share

1,000 votes for each share

Subordinate Voting Shares

3 unchanged sentences

Multiple Voting Shares each have the restricted right to convert to one hundred Subordinate Voting Shares subject to adjustments for certain customary corporate changes.

Super Voting Shares

Holders of Super Voting Shares are entitled to one thousand votes per Super Voting Share.

Each Super Voting share is convertible into one Multiple Voting Share.

Shares Issued

During the nine months ended September 30, 2024, 32,879 Multiple Voting Shares were converted into 3,287,900 Subordinate Voting Shares for no additional consideration.

During the nine months ended September 30, 2024, 12,500,000 Subordinate Voting Shares were issued to the Company’s senior secured lender in connection with the ninth amendment to the Company’s credit agreement (Note 13).

During the nine months ended September 30, 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 nine months ended September 30, 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

During the nine months ended September 30, 2024, employee stock options were exercised for 50,000 Subordinate Voting Shares.

During the three months ended March 31, 2025, 7,201 Multiple Voting Shares were converted into 720,100 Subordinate Voting Shares for no additional consideration.

During the three months ended March 31, 2025, employee stock options were exercised for 138,655 Subordinate Voting Shares.

Proceeds from this transaction were $ 23,110 .

During the nine months ended September 30, 2024, stock warrants were exercised for 303,127 Subordinate Voting Shares.

During the three months ended March 31, 2025, stock warrants were exercised for 265,626 Subordinate Voting Shares.

Proceeds from these transactions were $ 38,516 .

During the nine months ended September 30, 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 13).

During the nine months ended September 30, 2023, 65,411 Super Voting Shares were redeemed for 6,541,100 Subordinate Voting Shares

During the nine months ended September 30, 2023, 702 Multiple Voting Shares were redeemed for 70,200 Subordinate Voting Shares

During the three months ended March 31, 2025, 1,077,859 shares were issued in connection with the settlement of restricted stock units.

239,633 shares were net settled to pay payroll taxes associated with the issuance, resulting in the final issuance of 838,226 shares.

During the three months ended March 31, 2024, 10,342 Multiple Voting Shares were redeemed for 1,034,200 Subordinate Voting Shares.

Stock-Based Compensation

6 unchanged sentences

Options granted under the equity incentive plan were valued using the Black-Scholes option pricing model with the following weighted average assumptions:

September 30,

Three Months Ended

Risk-Free Interest Rate

6 unchanged sentences

Expected Dividend Yield

Stock option activity for the nine months ended September 30, 2024, and for the year ended December 31, 2023, is presented below:

Stock option activity for the three months ended March 31, 2025, and for the year ended December 31, 2024, is presented below:

Weighted Average

5 unchanged sentences

( 2,760,530 )

Balance, December 31, 2023

Options Outstanding at September 30, 2024

Options Exercisable at September 30, 2024

During the three and nine month periods ended September 30, 2024, the Company recognized $ 615,215 and $ 641,196 in stock-based compensation relating to stock options, respectively.

During the three and nine month periods ended September 30, 2023, the Company recognized $ 248,000 and $ 2,247,635 in stock-based compensation relating to stock options, respectively.

As of September 30, 2024, the total unrecognized compensation costs related to unvested stock options awards granted was $ 549,340 .

Options Outstanding at December 31, 2024

Options Outstanding at March 31, 2025

Options Exercisable at March 31, 2025

During the three month periods ended March 31, 2025 and 2024, the Company recognized $ 172,721 and $ 86,732 in stock-based compensation relating to stock options, respectively.

As of March 31, 2025, the total unrecognized compensation costs related to unvested stock options awards granted was $ 617,196 .

In addition, the weighted average period over which the unrecognized compensation expense is expected to be recognized is approximately 1.8 years.

The total intrinsic value of stock options outstanding and exercisable as of September 30, 2024, was $ 4,884,187 and $ 4,432,386 , respectively.

The total intrinsic value of stock options outstanding and exercisable as of March 31, 2025, was $ 4,382,709 and $ 4,183,499 , respectively.

The Company does not estimate forfeiture rates when calculating compensation expense.

8 unchanged sentences

Warrants outstanding at December 31, 2024

Warrants outstanding at September 30, 2024

Warrants exercisable at September 30, 2024

Warrants outstanding at March 31, 2025

Warrants exercisable at December 31, 2024

Weighted Average

3 unchanged sentences

Remaining Life

Warrants outstanding at December 31, 2022

Warrants outstanding at December 31, 2023

Warrants outstanding at September 30, 2024

Warrants exercisable at September 30, 2024

During both the three and nine month periods ended September 30, 2024, $ 0 in stock-based compensation expense was recorded in connection with outstanding warrants.

During the three and nine month periods ended September 30, 2023, ($ 3,820 ) and $ 1,244,404 was recorded in connection with outstanding warrants.

Warrants outstanding at December 31, 2023 and 2024

Warrants outstanding at March 31, 2025

Warrants exercisable at March 31, 2025

Restricted Stock Units (“RSUs”)

2 unchanged sentences

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

During the three and nine months ended September 30, 2024, the Company recognized $ 689,704 and $ 782,944 , respectively, in stock-based compensation expense related to RSUs.

During the three and nine month periods ended September 30, 2023, the Company recognized $ 52,437 and $ 517,376 , respectively, in stock-based compensation expense related to RSUs.

During the three months ended March 31, 2025 and 2024, the Company recognized $ 1,288,129 and $ 93,057 , respectively, in stock-based compensation expense related to RSUs.

A summary of RSUs is as follows:

3 unchanged sentences

Balance, December 31, 2024

Balance, September 30, 2024

Vested at September 30, 2024

( 1,160,697 )

Balance, March 31, 2025

Vested at March 31, 2025

Commitments and Contingencies

Legal proceedings

On February 25, 2019, Dr.

Mark Schneyer (“ Schneyer ”) filed a lawsuit in Minnesota District Court, Fourth District (the “ Court ”), on his own behalf and, derivatively, on behalf of Dorchester Capital, LLC, naming Vireo Health, Inc.

(“ Vireo U.S.

”), Dorchester Management, LLC (“ Dorchester Management ”), and Dorchester Capital, LLC (“ Capital ”), as defendants.

The essence of the claims made by Schneyer is Vireo U.S.

paid an inadequate price for MaryMed, LLC (“ MaryMed ”), which it purchased from Capital in 2018, and that the consideration given – shares of preferred stock in Vireo U.S.

– was distributed inappropriately by Capital at the direction of Dorchester Management (the managing member of Capital).

Schneyer, who is a Class B member of Capital, sought unspecified damages in excess of $ 50,000 and other relief.

Dorchester Management, LLC is an affiliated entity to Vireo U.S.

and was previously used as a management company over Dorchester Capital, LLC.

It no longer has active operations following Vireo Health, Inc.’s acquisition of MaryMed, LLC in 2018.

It was owned and controlled by Kyle E.

Kingsley and Amber H.

Shimpa, executive officers and directors of Vireo U.S.

and the Company.

While Vireo U.S.

continues to believe that Schneyer’s claims lack merit, it agreed to settle the litigation in April 2023 to avoid the expense, distraction and risk of the pre-trial and trial processes.

Entering into this settlement in no way changed the defendants’ position that they did nothing wrong and that the claims were baseless.

On January 31, 2022, the Company entered into the Arrangement Agreement with Verano, pursuant to which Verano was to acquire all of the issued and outstanding shares of Vireo Growth pursuant to a Plan of Arrangement.

10 unchanged sentences

Throughout 2023, the Company served 4 lists of documents, reviewed document production from Verano, and prepared for examinations for discovery.

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

On May 2, 2024, the Company filed the Summary Trial Application the Supreme Court of British Columbia for summary determination.

The Company is seeking substantial damages, specifically US $ 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.

On June 19, 2024, Verano filed the Preliminary Suitability Application seeking orders dismissing the Summary Trial Application on the basis that certain issues in the action are not suitable for summary determination.

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

5 unchanged sentences

Three Months Ended

September 30,

Nine Months Ended

September 30,

Salaries and benefits

5 unchanged sentences

The tax credit is equal to 50% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages per employee through December 31, 2020.

Additional relief provisions were passed by the United States government, which extend and slightly expand the qualified wage caps on these credits through December 31, 2021.

Additional relief provisions were passed by the United States government, which extended and slightly expanded the qualified wage caps on these credits through December 31, 2021.

Based on these additional provisions, the tax credit is now equal to 70% of qualified wages paid to employees during a quarter, and the limit on qualified wages per employee has been increased to $10,000 of qualified wages per quarter.

The Company applied for and received the tax credit under the CARES Act.

During the three and nine months ended September 30, 2024, the Company recorded and received $ 815,422 (2023 - $ 4,650,264 ) related to the CARES Employee Retention credit in other income on the unaudited condensed consolidated statement of loss and comprehensive loss for the three and nine months ended September 30, 2024 and 2023.

During the three months ended March 31, 2025, the Company recorded and received $ 972,888 (2024 - $ 0 ) related to the CARES Employee Retention credit in other income on the unaudited condensed consolidated statement of loss and comprehensive loss for the three months ended March 31, 2025.

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

(“ Grown Rogue ”) entered into a strategic agreement whereby Grown Rogue will support Vireo Growth in the optimization of its cannabis flower products.

As part of this strategic agreement (the “ Consulting Agreement ”) Grown Rogue granted the Company 8,500,000 warrants to purchase subordinate voting shares of Grown Rogue on October 5, 2023.

These warrants were valued at $ 5,221,971 on September 30, 2024 using a stock price of $ 0.70 , an exercise price of $ 0.167 , an expected life of 4.02 years, an annual risk free rate of 3.58 % , and volatility of 100 % .

The change in fair value for the three and nine months ended September 30, 2024, of $ 354,328 and $ 3,284,619 , respectively, was recorded as other income in the unaudited condensed consolidated statement of loss and comprehensive loss for the three and nine months ended September 30, 2024.

(“Grown Rogue”) entered into a strategic agreement whereby Grown Rogue will support the Company in the optimization of its cannabis flower products.

As part of this strategic agreement Grown Rogue granted the Company 8,500,000 warrants to purchase subordinate voting shares of Grown Rogue on October 5, 2023.

Subsequently, on October 9, 2024, the Company and Grown Rogue mutually agreed to terminate the advisory agreement.

As part of the termination agreement, the Company forfeited 4,500,000 of the previously granted 8,500,000 warrants.

On March 31, 2025, these 4,000,000 warrants were revalued at a fair value of $ 1,751,906 (December 31, 2024 - $ 2,270,964 ).

The fair value was derived from a black-scholes valuation using a stock price of $ 0.52 , an exercise price of $ 0.158 , an expected life of 3.52 years, an annual risk free rate of 3.96 % , and volatility of 100 % .

The change in valuation from December 31, 2024, to March 31, 2025, of $ 519,058 (March 31, 2024 - $ 1,327,879 of other income) was recorded as other expense in the statement of net loss and comprehensive loss for the three month period ended March 31, 2025.

Segment Reporting

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.

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 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.

Revenue is derived from the sale of these products in the United States, and the assets used to produce these products are also held in the United States.

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).

Supplemental Cash Flow Information (1)

September 30,

Cash paid for interest

1 unchanged sentence

Change in construction accrued expenses

Stock issued in connection with financing activities

(1) For supplemental cash flow information related to leases, refer to Note 9.

11 unchanged sentences

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

As of September 30, 2024, the Company’s financial liabilities consist of accounts payable, accrued liabilities, debt, convertible debt, liabilities held for sale, and uncertain tax liabilities.

As of March 31, 2025, the Company’s financial liabilities consist of accounts payable, accrued liabilities, debt,

convertible debt, liabilities held for sale, and uncertain tax liabilities.

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

16 unchanged sentences

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 nine months ended September 30, 2024, would have resulted in a corresponding change in the statement of loss and comprehensive loss of $ 420,133 .

A change of 100 basis points in interest rates during the three months ended March 31, 2025, would have resulted in a corresponding change in the statement of loss and comprehensive loss of $ 140,878 .

Related Party Transactions

As of September 30, 2024, and December 31, 2023, there were $ 0 and $ 121,846 due to related parties, respectively.

As of March 31, 2025, and December 31, 2024, there were $ 0 due to related parties.

Details surrounding the lending relationships between the Company and Chicago Atlantic, are described in Notes 12 and 13.

Our Chief Executive Officer, John Mazarakis, serves as a partner of Chicago Atlantic Group, LP, which is an affiliate of the Agent, our senior secured lender under the Credit Facility.

Given his ownership interest in the Agent and its affiliates, Mr.

Mazarakis has an approximate 29 % interest in the Company’s transactions with the Agent.

See "Item 13.

Certain Relationships and Related Transactions and Director Independence" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Subsequent Events

On October 9, 2024, the Company and Grown Rogue, mutually agreed to terminate the Consulting Agreement between the parties dated May 24, 2023, as amended September 20, 2023, effective September 30, 2024.

As part of the termination agreement, Vireo Growth forfeited 4.5 million of the 8.5 million Grown Rogue warrants the Company received under the Consulting Agreement and paid Grown Rogue a lump sum termination fee of $ 800,000 .

On October 10, 2024, Joshua Rosen, Chief Executive Officer, Interim Chief Financial Officer and Director of the Company resigned from all of his positions with the Company.

In conjunction with this event, the parties entered into a separation agreement (“ Separation Agreement ”) dated October 9, 2024 that provides, among other things, for the grant of 500,000 restricted stock units, which vest in 12 equal installments commencing January 1, 2025 and ending on December 1, 2025 and 500,000 immediately exercisable stock options with an exercise price per share of $ 0.50 .

Such options expire October 9, 2027.

Rosen will receive salary continuation for two years at a rate of $ 300,000 per year.

Pursuant to the Separation Agreement, the vesting of 250,000 options granted to Mr.

Rosen in August 2024 were accelerated and are exercisable until October 9, 2027.

On November 1, 2024, the Company entered into a Joinder and Tenth Amendment to the Credit Facility, which provides a financing commitment of up to $ 10.0 million in aggregate principal amount of convertible notes (the “ Convertible Notes ”).

These Convertible Notes are being funded by the Company’s senior secured lender and its affiliates.

The Convertible Notes have a term of three years , with a cash interest rate of 12.0 percent, and such interest shall be paid in cash on the last business day of each calendar month.

All accrued and unpaid interest shall be payable in full on the maturity date or earlier date of prepayment, in each case adjusted for any period of less than one calendar month, if applicable.

The Convertible Notes are convertible at the option of lender, in whole but not in part in a single transaction, at any time into that number of Subordinate Voting Shares of the Company 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 equal to $ 0.625 .

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-Q

Item 1. Financial Statements