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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 29, 2026
VIREO GROWTH INC.
(Exact name of registrant as specified in its
charter)
British Columbia
(State or other jurisdiction of Incorporation)
| 000-56225 |
|
82-3835655 |
| (Commission File Number) |
|
(IRS Employer Identification No.) |
| |
|
|
|
207 South 9th Street
Minneapolis, Minnesota |
|
55402 |
| (Address of principal executive offices) |
|
(Zip Code) |
(612) 999-1606
(Registrant’s telephone number, including
area code)
Not Applicable
(Former name or former address, if changed
since last report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b)
of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
| N/A |
N/A |
N/A |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act.
| Item 1.01 | Entry into a Material Definitive Agreement |
Arrangement Agreement
On April 29, 2026, Vireo Growth Inc. (“Vireo” or the “Company”)
entered into an arrangement agreement (the “Arrangement Agreement”) with FLUENT Corp. (“FLUENT”), pursuant to
which Vireo agreed to acquire all of the issued and outstanding shares of FLUENT by way of a court-approved plan of arrangement under
Section 182 of the Business Corporations Act (Ontario) (the “Plan of Arrangement” and, together with the Arrangement
Agreement and related documents, the “Arrangement”).
Under the Arrangement, at the effective time of the Plan of Arrangement
(the “Effective Time”), all issued and outstanding common shares of FLUENT (after conversion of all proportionate voting shares
and non-voting, non-participating exchangeable shares of FLUENT into FLUENT common shares, as described below), other than (i) FLUENT
common shares held by dissenting shareholders and (ii) FLUENT common shares held by Vireo or its affiliates, will be acquired by Vireo
in exchange for subordinate voting shares of Vireo (the “Vireo Shares”).
Under the Arrangement, at the Effective Time:
| · | Each
outstanding FLUENT proportionate voting share (other than dissent shares) will be converted into 10 FLUENT common shares. |
| · | Each
outstanding FLUENT non-voting, non-participating exchangeable share (other than dissent shares) will be converted into one FLUENT common
share. |
Following the conversion of FLUENT proportionate voting shares and
FLUENT non-voting, non-participating exchangeable shares noted above, each FLUENT common share (other than dissent shares and shares held
by Vireo or its affiliates) will be transferred to Vireo in exchange for 0.0705359 of a Vireo Share (the “Exchange Ratio”),
with any resulting fractional Vireo Shares rounded to the nearest whole share without any additional compensation. The Exchange Ratio
is subject to customary equitable adjustment in the event of any stock split, combination, consolidation, reclassification, dividend or
similar changes in the share capital of Vireo between signing and closing.
The Arrangement will be implemented pursuant to the Plan of Arrangement,
which will be subject to the approval of the Ontario Superior Court of Justice (the “Court”) and registered FLUENT shareholders
will have dissent rights in respect of the Arrangement in accordance with Section 185 of the Business Corporations Act (Ontario).
The Arrangement is subject to approval by FLUENT’s shareholders. It is not subject to approval by Vireo’s shareholders.
The Arrangement Agreement contains certain covenants and agreements
regarding the conduct of FLUENT’s business until the Effective Time, including covenants requiring FLUENT and its subsidiaries to
manage and operate their respective businesses in accordance with an operating budget that was approved by the FLUENT Board of Directors
(“FLUENT Board”) and adopted by FLUENT in connection with the Arrangement.
Treatment of FLUENT Equity Awards and Convertible Securities
The Arrangement Agreement provides that, prior to the Effective Time:
| · | All
outstanding FLUENT options to purchase FLUENT common shares will vest in full, and any FLUENT common shares issued upon the exercise
of such FLUENT options prior to the Effective Time will then be exchanged for Vireo Shares on the same basis as other FLUENT common shares,
and any such FLUENT options that are not exercised prior to the Effective Time will terminate for no consideration. |
| · | All
outstanding FLUENT restricted share units will vest in full and will be settled in FLUENT common shares, which shares will then be exchanged
for Vireo Shares on the same basis as other FLUENT common shares. |
| · | FLUENT’s
outstanding indebtedness is addressed through a combination of equitization, payoff and waivers as conditions to closing, including: |
| ○ | FLUENT’s
15% secured subordinated convertible promissory note in the principal amount of $6,500,000 dated November 26, 2024 (the “Convertible
Note”) will be paid out in cash at or prior to the Effective Time in accordance with the terms of the Convertible Note. In addition,
the holder of the Convertible Note is a counterparty to a voting and support agreement in favor of the Arrangement that, among other
things, provides for acknowledgement of the repayment of the Convertible Note and the termination of the related investor rights agreement
effective as of the later of the closing date and the date on which the Convertible Note is paid off in full. |
| ○ | Completion
of a credit equitization transaction in respect of certain indebtedness under FLUENT’s credit agreement (the “Company Credit
Equitization”), pursuant to which such portion of indebtedness will be converted into 1,701,261,364 FLUENT common shares issued
to FLUENT’s lenders that will thereafter be exchanged for Vireo Shares immediately prior to the Effective Time under the Arrangement. |
| | | |
| ○ | FLUENT’s
outstanding 10% unsecured convertible debenture in the principal amount of $3,500,000 dated April 29, 2022 (the “Convertible Debenture”)
will be assumed by Vireo and remain outstanding following the Effective Time, subject to obtaining a waiver from the holder in respect
of any default arising from the Arrangement. |
All FLUENT equity incentive plans and related award agreements will
be terminated at the Effective Time.
Support Agreements and Non-Solicitation Provisions
Concurrently with execution of the Arrangement Agreement, Vireo entered
into voting and support agreements with certain significant shareholders of FLUENT, including FLUENT’s directors and executive officers
and certain major shareholders (collectively, the “Supporting Shareholders”). Under these agreements, each Supporting Shareholder
has agreed, among other things, to vote all of its FLUENT shares in favor of the Arrangement at the special meeting of FLUENT shareholders
called to approve the Arrangement (the “FLUENT Meeting”) and not to transfer its FLUENT Shares, subject to customary exceptions.
The Arrangement Agreement contains customary non-solicitation covenants
in favor of Vireo, pursuant to which FLUENT has agreed not to, among other things, solicit, initiate or knowingly encourage or facilitate
any inquiry or proposal that constitutes or could reasonably be expected to lead to an Acquisition Proposal (as defined in the Arrangement
Agreement), furnish information in connection with an Acquisition Proposal, or participate in discussions or negotiations regarding any
Acquisition Proposal, subject to customary “fiduciary out” provisions.
Prior to the approval of the Arrangement by FLUENT shareholders, if
FLUENT receives an unsolicited written bona fide Acquisition Proposal that the FLUENT Board determines in good faith, after consultation
with its financial and legal advisors and following receipt of the unanimous recommendation of the special committee of the FLUENT Board,
would, if consummated in accordance with its terms, constitute a Superior Proposal (as defined in the Arrangement Agreement) and that
did not arise from a breach of the non-solicitation provisions, FLUENT may, subject to compliance with the Arrangement Agreement, furnish
information and engage in discussions with the proponent of such proposal under an acceptable confidentiality agreement. Vireo will have
a customary five-business-day matching right in respect of any such Superior Proposal. If, after giving effect to Vireo’s matching
rights, the Superior Proposal continues to constitute a Superior Proposal and the FLUENT Board determines in good faith that failure to
authorize FLUENT to enter into a definitive agreement for such Superior Proposal would be inconsistent with its fiduciary duties, FLUENT
may terminate the Arrangement Agreement to enter into such agreement, subject to payment of the termination fee described below.
Conditions to Closing
Completion of the Arrangement is subject to a number of closing conditions,
including, among others: (i) approval by FLUENT shareholders; (ii) issuance by the Court of an interim order authorizing the calling and
holding of the FLUENT Meeting and a final order approving the Arrangement; (iii) receipt of all required U.S. regulatory approvals; (iv)
the absence of any law or order that makes completion of the Arrangement illegal or otherwise prohibits its completion; (v) the exemption
of the Vireo Shares issued in the Arrangement from the registration requirements of the U.S. Securities Act pursuant to Section 3(a)(10)
thereof; (vi) completion of the Company Credit Equitization; (vii) receipt of the required waiver in respect of the Convertible Debenture,
(viii) execution of a letter of intent acceptable to Vireo in respect of a contemplated sale of FLUENT’s Texas business, (ix) FLUENT
shareholders not having exercised dissent rights in excess of 6% of the outstanding FLUENT shares, and (x) entry into a third amendment
to FLUENT’s credit agreement on terms satisfactory to Vireo.
Termination; Outside Date; Termination Fee
The Arrangement Agreement may be terminated at any time prior to the
Effective Time by mutual written agreement of Vireo and FLUENT and in certain other circumstances, including by either party, if (i) the
Arrangement is not approved by the requisite vote of FLUENT shareholders at the FLUENT Meeting, (ii) the Effective Time has not occurred
by March 31, 2027 or such later date as determined in accordance with the Arrangement Agreement (the “Outside Date”), or (iii)
a law or final, non-appealable governmental order is in effect that makes completion of the Arrangement illegal or otherwise prohibits
completion of the Arrangement, in each case subject to certain fault-based exceptions. In certain circumstances, FLUENT will be required
to pay Vireo a termination fee of $2,000,000 (the “Termination Fee”), including if (i) FLUENT terminates the Arrangement Agreement
to enter into a definitive agreement in respect of a Superior Proposal; (ii) Vireo terminates the Arrangement Agreement following a change,
withdrawal or adverse modification of the FLUENT Board’s or the special committee of the FLUENT Board’s recommendation in
favor of the Arrangement or a material breach of FLUENT’s non-solicitation obligations; or (iii) the Arrangement Agreement is terminated
in certain circumstances (including failure to obtain FLUENT shareholder approval or the Outside Date having passed) after an Acquisition
Proposal has been made or publicly announced, and FLUENT enters into an agreement for or completes an Acquisition Proposal within 12 months
of such termination (and, in the case of an agreement entered into within such 12-month period, such Acquisition Proposal is subsequently
completed, whether or not within such period) (subject to certain thresholds and exceptions).
Certain Securities Law Matters
The issuance of Vireo Shares under the Arrangement is intended to be
exempt from the registration requirements of the U.S. Securities Act of 1933, as amended, pursuant to Section 3(a)(10) thereof. In connection
with this exemption, FLUENT will seek a Court order approving the Arrangement following a hearing on the fairness of the terms and conditions
of the Arrangement to FLUENT shareholders, at which hearing all persons to whom Vireo Shares are to be issued under the Arrangement will
be entitled to appear and be heard. The final order is expected to expressly reference the Court’s determination that the Arrangement
is fair, both procedurally and substantively, to such FLUENT shareholders. The Vireo Shares issued in the Arrangement are also intended
to be freely tradable in Canada, subject to customary restrictions applicable to “control persons”, and freely tradable under
U.S. securities laws subject to certain restrictions on transfer by affiliates of Vireo.
The foregoing description of the Arrangement Agreement and the Plan
of Arrangement does not purport to be complete and is qualified in its entirety by reference to the full text of the Arrangement Agreement
and the Plan of Arrangement, which are filed as Exhibit 2.1 to this Current Report on Form 8-K and are incorporated herein by reference.
Copies of the Arrangement Agreement and Plan of Arrangement have been
filed to provide shareholders with information regarding their terms and conditions and are not intended to provide any factual information
about the Company, FLUENT or their respective businesses. The representations, warranties and covenants contained in the Arrangement Agreement
and the other agreements referenced herein have been made solely for the benefit of the parties to such agreements, and are not intended
as statements of fact to be relied upon by the Company’s shareholders, but rather, as a way of allocating the risk between the parties
thereto in the event the statements therein prove to be inaccurate. Statements made in the Arrangement Agreement have been modified or
qualified by certain confidential disclosures that were made between the parties in connection with the negotiation of the Arrangement
Agreement, which disclosures are not reflected in the Arrangement Agreement and Plan of Arrangement hereto. Moreover, such statements
may no longer be true as of a given date and may apply standards of materiality in a way that is different from what may be viewed as
material by shareholders. Accordingly, shareholders should not rely on the representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or condition of the Company or FLUENT or their respective businesses. Moreover,
information concerning the subject matter of the representations and warranties may change after the date of the Arrangement Agreement
and Plan of Arrangement and such other agreements, which subsequent information may or may not be fully reflected in the Company’s
public disclosures. The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible
for considering whether additional specific disclosures of material information regarding material contractual provisions are required
to make the statements in this Current Report on Form 8-K not misleading.
| Item 7.01 | Regulation FD Disclosure |
On April 30, 2026, the Company issued a press release announcing the
matters disclosed in this Current Report on Form 8-K, which is attached as Exhibit 99.1 hereto and is incorporated herein solely for purposes
of this Item 7.01 disclosure.
Pursuant to the rules and regulations of the Securities and Exchange
Commission (the “SEC”), the information in this Item 7.01 disclosure, including Exhibit 99.1, and information set forth therein,
is deemed to have been furnished and shall not be deemed to be “filed” under the Exchange Act.
Forward-Looking Statements and Information
Certain statements contained or incorporated by reference
in this Current Report on Form 8-K constitute “forward-looking statements” within the meaning of applicable securities
laws. Statements that are not historical fact are forward-looking statements. Certain of these forward-looking statements can be identified
by the use of words such as “believes,” “anticipates,” “expects,” “intends,” “plans,”
“projects,” “estimates,” “assumes,” “may,” “should,” “could,”
“would,” “shall,” “will,” “seeks,” “targets,” “future,” or other
similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors, and our
actual results, performance or achievements could differ materially from future results, performance or achievements expressed in these
forward-looking statements, including statements regarding the completion of the Arrangement, including approval by the Court, the anticipated
benefits of the Arrangement, and other statements that are not historical facts. There are several risks, uncertainties, and other important
factors, many of which are beyond the Company’s control, that could cause its actual results to differ materially from the forward-looking
statements, including risks involved with the adverse impact of the Arrangement on the Company’s business, financial condition,
and results of operations; the Company’s ability to successfully consummate the Arrangement; the Company’s ability to maintain
relationships with suppliers, customers, employees and other third parties as a result of completion of the Arrangement; the effects of
the completion of the Arrangement on the Company and the interests of various constituents; risks and uncertainties associated with completion
of the Arrangement, some of which are beyond the Company’s control; subject to the successful outcome of the Arrangement, the nature,
cost, impact and outcome of pending and future litigation, other legal or regulatory proceedings, or governmental investigations and actions;
as well as the other risks set out in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, which is
filed with the SEC and available on EDGAR and filed with the Canadian securities regulators and available under the Company's profile
on SEDAR+ at www.sedarplus.com. The completion of the Arrangement remains subject to material conditions, including satisfaction
of all conditions to the Arrangement Agreement, including approval by the Court, and there can be no assurance that the Company will be
successful in completing the Arrangement or any other similar transaction on the terms described herein, on different terms, or at all.
This Current Report on Form 8-K does not constitute an offer to sell or buy, or the solicitation of an offer to sell or buy, the
securities referred to herein.
| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits.
| Exhibit No. |
|
Description |
| 2.1+** |
|
Arrangement Agreement, dated April 29, 2026, by and between Vireo Growth Inc. and FLUENT Corp. |
| |
|
|
| 99.1* |
|
Press Release, dated as of April 30, 2026 |
| |
|
|
| 104 |
|
Cover Page Interactive Data File (embedded within Inline XBRL document) |
*Furnished herewith
+Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules have
been omitted and will be furnished on a supplemental basis to the Securities and Exchange Commission upon request.
**Certain confidential information has been excluded from
this exhibit because it is both (i) not material and (ii) the type of information that the registrant treats as private or confidential.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
VIREO GROWTH INC.
(Registrant) |
| |
|
| |
By: |
/s/
Tyson Macdonald |
| |
|
Tyson Macdonald |
| |
|
Chief Financial Officer |
Date: May 5, 2026
Exhibit 99.1
Vireo Growth to Acquire
FLUENT in All-Stock Transaction
MINNEAPOLIS,
Minnesota and TAMPA, Florida, April 30, 2026 -- Vireo Growth Inc. (CSE: VREO) (OTCQX: VREOF) (“Vireo”), a multi-state cannabis
operator, and FLUENT Corp. (CSE: FNT.U) (OTCQB: CNTMF) (“FLUENT”
or the “Company”), a vertically-integrated, multi-state cannabis company, today announced that they have entered into a definitive
arrangement agreement (the “Arrangement Agreement”) pursuant to which Vireo will acquire all of the issued and outstanding
common shares of FLUENT (after conversion of all (i) proportionate voting shares of FLUENT and (ii) non-voting, non-participating exchangeable
shares of FLUENT) (the “FLUENT Shares”) in exchange for Vireo Shares (as defined below) (the “Transaction”).
Pursuant
to the terms of the Arrangement Agreement, each shareholder of FLUENT (a “FLUENT Shareholder”) will receive 0.0705359 of a
subordinate voting share of Vireo (each whole share, a “Vireo Share”) in exchange for each FLUENT Share held. With the acquisition
of FLUENT, it is expected that, subject to regulatory approval in each market, Vireo will deepen its presence in Florida with approximately
74 stores and approximately 144,000 square feet of combined cultivation and production canopy, creating a leading operator with scale
in Florida’s medical cannabis market. Following the completion of the Transaction, FLUENT will join the Vireo ecosystem and gain
exposure to a larger and well capitalized multi-state operator currently operating in 10 states across the U.S.
Strategic
Review Process
The Board
of Directors of FLUENT (the “FLUENT Board”) formed a special committee composed of independent directors (the “Special
Committee”) to evaluate and consider the Transaction and explore other potential strategic alternatives. Following a comprehensive
review conducted with the assistance of independent financial advisors and legal advisors, the Special Committee has unanimously recommended
that the FLUENT Board approve the Transaction.
Management
Commentary
Richard
Mavrinac, Chair of the Special Committee, said, “Following a comprehensive and independent review process, the Special Committee
unanimously concluded that this transaction delivers compelling strategic and financial value for FLUENT shareholders. In an increasingly
competitive industry, scale, capital access, and a strategic and expansive operational footprint are critical to long-term success, and
this combination meaningfully strengthens each of those areas. The structure of the Transaction also enables our shareholders to participate
in the future growth of a larger, more competitive platform. We have strong confidence in John Mazarakis’ leadership and Vireo’s
vision for the combined company.”
John
Mazarakis, Chief Executive Officer of Vireo, commented, “The acquisition of FLUENT meaningfully expands our presence in one of the
most important cannabis markets in the country. Florida’s limited-license structure rewards scale, and combining two complementary
networks with minimal overlap creates a platform that is meaningfully harder to replicate. FLUENT has displayed a proven track record
in Florida with revenue generation from its Florida operations in the amount of approximately $71.5 million in 2025. What makes this transaction
particularly compelling is the commitment of the FLUENT team to undertake certain steps to right size the business in advance of closing.
The business we receive at closing we believe will be positioned to generate meaningful cash flow before we apply a single Vireo synergy.
We believe we will be acquiring a structurally improved asset at an attractive entry point, and we intend to move quickly to realize the
full potential of the combined Florida platform.”
David
E. Vautrin, Interim Chief Executive Officer of FLUENT, said, “Partnering with a materially larger cannabis company provides
the scale, capital, and infrastructure needed to accelerate growth. This all-stock Transaction positions our shareholders to participate
in the upside of a stronger, scaled platform. John Mazarakis’ vision and disciplined leadership
give us strong conviction in the combined company’s future.”
Approvals
and Recommendation
The Transaction
was unanimously approved by the FLUENT Board (with interested directors abstaining from voting), following the unanimous recommendation
of the Special Committee. The Special Committee and the FLUENT Board have unanimously determined, after receiving financial and legal
advice along with the Independent Fairness Opinion (as defined below) that the Transaction is in the best interests of FLUENT and is fair
to the FLUENT Shareholders and the FLUENT Board recommends that the FLUENT Shareholders vote in favor of the Transaction.
The board
of directors of Vireo has also unanimously approved the Transaction (with an interested director abstaining from voting).
ATB Cormark
Capital Markets provided the Special Committee and FLUENT Board with an oral opinion, dated April 29, 2026, to the effect that, as of
the date of such opinion, the consideration payable to the FLUENT Shareholders pursuant to the Transaction is fair, from a financial point
of view, to the FLUENT Shareholders, based upon and subject to the assumptions, limitations, qualifications and other matters set forth
in such opinion.
The Vireo
Shares to be issued and exchanged for FLUENT Shares pursuant to the Transaction have not been and will not be registered under the United
States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any U.S. state securities laws, and will be issued
and exchanged in reliance upon the exemption from the registration requirements of the U.S. Securities Act provided by Section 3(a)(10)
thereof and applicable U.S. state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer
to buy any securities.
Operating
Budget
In connection
with the Transaction, the FLUENT Board approved an operating budget (the “Operating Budget”), which is expected to streamline
the Company’s operations and enhance overall performance throughout FLUENT’s platform, including, among other things, through
the divestiture of certain non-core assets, targeted cost reductions and initiatives to optimize its business. These measures are anticipated
to improve the Company’s operating efficiency and support its efforts toward increased cash flow generation over time.
Credit
Agreement Equitization
In
connection with the Transaction, the Company has entered into a credit equitization agreement (the “Equitization Agreement”)
with certain lenders (the “Lenders”) to its existing senior secured credit agreement, dated November 26, 2024, as amended
on March 17, 2026 and April 17, 2026 by and among FLUENT, its Canadian and US subsidiaries, the lenders party thereto and Chicago Atlantic
Financial Services, LLC, as successor administrative agent (the “Credit Agreement”). Pursuant to the terms of the Equitization
Agreement, among other things, the Company and the Lenders have agreed to exchange an aggregate of US$30 million outstanding indebtedness
owing under the Credit Agreement for FLUENT Shares (the “Equitization”). Such FLUENT Shares will, subject to the terms of
the Equitization Agreement, be issuable to the Lenders immediately prior to the closing of the Transaction and will be exchanged into
Vireo Shares upon completion of the Transaction.
FLUENT
Shareholder Approvals
The Transaction
will be effected by way of a court-approved plan of arrangement pursuant to the Business Corporations Act (Ontario) (the "Arrangement")
requiring the approval of (i) at least two-thirds of the votes cast by the FLUENT Shareholders; and (ii) if applicable, a simple majority
of the votes cast by FLUENT Shareholders excluding for this purpose the votes attached to FLUENT Shares owned and/or controlled by any
FLUENT Shareholders required to be excluded under Multilateral Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions, voting at a special meeting of shareholders (the “FLUENT Meeting”) to consider the Transaction,
which is expected to be held in the second quarter of 2026.
In connection
with the Transaction, Vireo has entered into voting support agreements with certain directors, officers and key shareholders of FLUENT,
with such holders representing approximately 38.3% of the issued and outstanding FLUENT Shares (on an as-converted basis), pursuant to
which they have agreed to, among other things, vote their FLUENT Shares in favor of the Transaction (the “Voting Support Agreements”).
In addition
to the FLUENT Shareholder approvals, closing of the Transaction is subject to court approvals, as well as the receipt of all required
regulatory approvals, the completion of the Equitization, and the satisfaction of certain other closing conditions customary in transactions
of this nature. The Arrangement Agreement includes customary deal protection provisions, including non-solicitation covenants of FLUENT,
"fiduciary out" and "right to match" provisions in favor of FLUENT, as well as a termination fee of $2 million payable
by FLUENT to Vireo, if FLUENT accepts a superior proposal and in certain other specified circumstances.
Assuming
timely receipt of all necessary court, FLUENT Shareholder, regulatory and other third-party approvals, the completion of the Equitization
and the satisfaction of all other conditions, closing of the Transaction is expected to occur in the fourth quarter of 2026.
Subject
to the satisfaction of all conditions to closing, upon completion of the Transaction, it is expected that the FLUENT Shares will be delisted
from the Canadian Securities Exchange (“CSE”) and the OTCQB Venture Market and that FLUENT will apply to cease to be a reporting
issuer under applicable Canadian securities laws.
The
foregoing summary is qualified in its entirety by the provisions of the Arrangement Agreement. Copies of the Arrangement Agreement and
the Voting Support Agreements and certain related documents will be filed with the applicable Canadian securities regulators and will
be available on the Company’s and Vireo’s profile, as applicable, on SEDAR+ at www.sedarplus.ca and Vireo’s
profile on EDGAR at www.sec.gov.
A description
of the Transaction will be set forth in the management information circular of FLUENT, which will be mailed or made available to the FLUENT
Shareholders and filed on the Company’s profile on SEDAR+ in advance of the FLUENT Meeting.
The Company
also announced today that Chris Hagedorn has resigned from the FLUENT Board. The vacancy will not be filled at this time.
Financial
and Legal Advisors
ATB Cormark
Capital Markets is acting as financial advisor to the Special Committee of FLUENT and provided an independent fairness opinion to the
Special Committee and FLUENT Board (the "Independent Fairness Opinion"). Cassels Brock & Blackwell LLP is acting as Canadian
legal counsel and Goodwin Procter LLP is acting as United States legal counsel to FLUENT. DLA Piper (Canada) LLP is acting as Canadian
legal counsel, Eversheds Sutherland (US) LLP is acting as United States legal counsel, and Shenker Russo & Clark LLP and Foley &
Lardner LLP are acting as regulatory counsel to Vireo.
About FLUENT Corp.
FLUENT,
a national cannabis consumer packaged goods company and retailer, is dedicated to being one of the highest quality cannabis companies
for the communities it serves. This is driven by FLUENT's unrelenting commitment to operational excellence in cultivation, production,
distribution, and retail experience. FLUENT produces an assortment of cannabis products under a diverse portfolio of brands including
MOODS, Knack, Wandr, Bag-O and Hyer Kind. FLUENT operates in Florida, New York, and Texas. Headquartered in Tampa, Florida, FLUENT employs
approximately 650 employees across 8 cultivation and manufacturing facilities, 35 active retail locations and a wholesale division which
trades under ENTOURAGE servicing third party retailers in New York. For more information on the Company’s wholesale division ENTOURAGE,
please visit https://entouragewholesale.com/.
FLUENT
Shares trade on the CSE under the symbol “FNT.U” and on the OTCQB Venture Market under the symbol “CNTMF”. For
more information about the Company, please visit www.getFLUENT.com.
About Vireo Growth Inc.
Vireo
was founded in 2014 as a pioneering medical cannabis company. Vireo is building a disciplined, strategically aligned, and execution-focused
platform in the industry. This strategy drives Vireo’s intense local market focus while leveraging the strength of a national portfolio.
Vireo is committed to hiring industry leaders and deploying capital and talent where it believes it will drive the most value. Vireo
operates with a long-term mindset, a bias for action, and an unapologetic commitment to its customers, employees, shareholders, industry
collaborators, and the communities it serves. For more information about Vireo, visit www.vireogrowth.com.
Forward-Looking Information
Certain information
in this news release may constitute “forward-looking information” within the meaning of applicable securities laws. In some
cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such
as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an
opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates”
or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions,
events or results “may”, “could”, “would”, “might”, “will” or “will
be taken”, “occur” or “be achieved” or similar expressions and includes, but is not limited to, statements
with respect to the timing and outcome of the Transaction and the Equitization and the anticipated benefits thereof, the
occurrence and expectations regarding FLUENT’s right-sizing actions, overall business and estimated potential synergies as a result
of the Transaction, the anticipated timing of the FLUENT Meeting and the closing of the Transaction, expectations regarding the Operating
Budget and the anticipated timing of actions and benefits resulting from the actions contemplated in connection with the Operating Budget;
the satisfaction or waiver of the closing conditions set out in the Arrangement Agreement, including receipt of all regulatory approvals,
and the expectation that the FLUENT Shares will be delisted from the CSE and OTCQB Venture Market and that FLUENT will cease to be a reporting
issuer under applicable Canadian securities laws. In addition, any statements that refer to expectations, projections, or other characterizations
of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical
facts but instead represent the expectations, estimates, and projections of the Company and Vireo regarding future events, plans or objectives,
many of which, by their nature, are inherently uncertain and outside of the Company's and Vireo’s control.
Investors are cautioned
that forward-looking information is necessarily based on many opinions, assumptions, and estimates that, while considered reasonable
by the Company and Vireo as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions, and
other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those
expressed or implied by such forward-looking information. Among the key factors that could cause actual results to differ materially
from those projected in the forward-looking information are the following: the dilutive impact of the Transaction and the Equitization
and future resales of Vireo Shares in the public market by the FLUENT Shareholders, which may negatively affect the price of Vireo Shares;
assumptions as to the time required to prepare and mail meeting materials to FLUENT Shareholders; the ability of the parties to receive,
in a timely manner and on satisfactory terms, the necessary regulatory, court and FLUENT Shareholder approvals; the ability of the parties
to satisfy, in a timely manner, the other conditions to the completion of the Transaction; the prompt and effective integration of Vireo’s
and FLUENT’s businesses; inherent uncertainty associated with financial or other projections; risks related to the value of Vireo
Shares to be issued pursuant to the Transaction; the diversion of management time on Transaction-related issues; the Company’s
and Vireo’s ability to execute their respective go-forward strategies; risks related to additional financing; risks relating to
the Company’s debt obligations and the ability to make payments on existing indebtedness; risks related to the ability to access
private and public capital; stock market volatility; the availability of financing; changes in the business activities, focus and plans
of the Company and Vireo and the timing associated therewith; the timing of any changes to federal laws in the U.S. to allow for the
general cultivation, distribution, and possession of cannabis; regulatory and licensing risks; changes in cannabis industry growth and
trends; changes in general economic, business and political conditions, including changes in the financial markets; the global regulatory
landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; risks relating to anti-money
laundering laws; compliance with extensive government regulation, including the Company’s and Vireo’s interpretation of such
regulation; public opinion and perception of the cannabis industry; and the risk factors described in the public filings of the Company
and Vireo filed with applicable securities regulators and available under their respective profiles at www.sedarplus.ca and Vireo’s
profile on EDGAR at www.sec.gov.
In respect of the
forward-looking statements and information concerning the anticipated benefits and completion of the Transaction and Equitization and
the anticipated timing for completion of the Transaction and Equitization, the Company and Vireo have provided such statements and information
in reliance on certain assumptions that they believe are reasonable at this time. Although the Company and Vireo believe that the assumptions
and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed
on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company and
Vireo caution that the foregoing list of material factors is not exhaustive. Should one or more of these risks or uncertainties materialize,
or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described
herein as intended, planned, anticipated, believed, estimated or expected. Consequently, there can be no assurance that the actual results
or developments anticipated by the Company or Vireo (including the Transaction and impact or benefits related thereto) will be realized
or, even if substantially realized, that they will have the expected consequences for, or effects on, the Company, Vireo, their respective
shareholders, or the future results and performance of the Company and Vireo. Although the Company and Vireo have attempted to identify
important risks, uncertainties and factors that could cause actual results to differ materially, there may be others that cause results
not to be as anticipated, estimated or intended. Neither the Company nor Vireo intends, and neither assumes any obligation, to update
this forward-looking information except as otherwise required by applicable law.
Each of the Company
and Vireo, through their respective subsidiaries, is directly involved in the manufacture, possession, use, sale, and distribution of
cannabis in the adult-use and medical cannabis marketplace in the United States. Local state laws where the Company and Vireo operate
permit such activities however, investors should note that there are significant legal restrictions and regulations that govern the cannabis
industry in the United States under federal laws in the United States. Cannabis remains a scheduled drug under the United States Controlled
Substances Act and, subject to certain exceptions in relation to medical cannabis, illegal under federal law in the United States to,
among other things, cultivate, distribute, or possess cannabis in the United States. Financial transactions involving proceeds generated
by, or intended to promote, cannabis-related business activities in the United States may form the basis for prosecution under applicable
United States federal money laundering legislation.
While the approach
to enforcement of such laws by the federal government in the United States has trended toward non-enforcement against individuals and
businesses that comply with adult-use and medical cannabis programs in states where such programs are legal, strict compliance with state
laws with respect to cannabis will neither absolve the Company or Vireo of liability under United States federal law, nor will it provide
a defense to any federal proceeding which may be brought against the Company or Vireo. The enforcement of federal laws in the United States
is a significant risk to the business of each of the Company and Vireo and any proceedings brought against the Company or Vireo thereunder
may adversely affect their respective operations and financial performance.
The forward-looking
statements contained in this news release are made as of the date of this news release, and each of the Company and Vireo expressly disclaims
any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them,
whether as a result of new information, future events or otherwise, except as required by applicable law.
For FLUENT, contact:
Matt Mundy, Chief Legal Officer
(850) 972-8077
Investor Relations Contact: investors@getFLUENT.com
Media Contact: press@getFLUENT.com
For Vireo, contact:
Joe Duxbury, Chief Accounting Officer
investor@vireogrowth.com
(612) 314-8995
