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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):
February 13, 2023
GOODNESS
GROWTH HOLDINGS, 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 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On February 14, 2023, Goodness Growth Holdings,
Inc. (the “Registrant”) announced that Dr. Kyle E. Kingsley, age 47, has been appointed to the position of Executive Chairman
and has resigned the position of Chief Executive Officer (“CEO”) of both the Registrant and its wholly-owned subsidiary, Vireo
Health, Inc. (“VHI”). Dr. Kingsley has served as the CEO and chairman of the board of directors of each of the Registrant
and VHI since 2014. Dr. Kingsley is married to the sister of Amber Shimpa, the President of each of the Registrant and VHI.
In connection with this appointment, on February
13, 2023, VHI and the Registrant entered into a Third Amendment to Employment Agreement (the “Kingsley Amendment”) with Dr.
Kingsley to his Employment Agreement dated December 1, 2020, as subsequently amended (the “Kingsley Employment Agreement”).
The Kingsley Amendment provides for Dr. Kingsley’s resignation as CEO and his appointment to the role of Executive Chairman of the
Registrant and VHI, as described above. The Kingsley Amendment changes Dr. Kingsley’s base compensation to $260,000 per year.
Additionally, notwithstanding anything to the contrary in the Kingsley Employment Agreement, the Kingsley Amendment provides that all
calculations of payments due to Dr. Kingsley as a result of a future separation of his employment shall be made as if his base salary
were $360,000 per year. All other terms of the Kingsley Employment Agreement, as previously amended, remain in effect. This
summary of the Kingsley Amendment is qualified in its entirety by reference to the full text of the Kingsley Amendment, which is attached
as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein
by reference. Other than the Kingsley Amendment, there are no arrangements or understandings between Dr. Kingsley and any other person
pursuant to which he was selected for the position to which he was appointed.
Also on February 14,
2023, the Registrant announced the appointment of Joshua Rosen, age 49, as interim CEO of each of the Registrant and VHI. Mr. Rosen
has served as a member of the board of directors of the Registrant since August 2021 and as interim President since December 2022. Mr.
Rosen has served as Managing Partner of Bengal Capital, a cannabis investment and advisory firm, since December 2020. Through May
of 2021, Mr. Rosen was a director of 4Front Ventures Corporation (“4Front”). Mr. Rosen was previously Executive
Chairman and CEO of 4Front and its predecessor companies, having co-founded 4Front in 2011. Mr. Rosen is on the Board of Managers of Ninety
Plus Coffee, LLC, a coffee producer.
In August 2021, the Company
entered into a consulting agreement with Bengal Impact Partners, LLC (“Bengal”) to serve as a strategic advisor to the Company.
Mr. Rosen is a managing partner at Bengal and shares voting and profit interests in Bengal. For the fiscal year ended December 31, 2022,
the Company paid Bengal $111,613 in cash under this agreement. Pursuant to an amendment to the agreement
executed December 12, 2022, the monthly payments to Bengal were terminated and the Company issued Bengal 75,000 warrants with a strike
price of $1.36 per share and another 75,000 warrants with a strike price of $1.62 per share. All of the warrants have a two-year term.
The amendment also eliminated Bengal’s right to receive any other cash fees, warrants or other compensation or expense reimbursement.
Related to Mr. Rosen’s appointment as interim
CEO, on February 13, 2023, the Registrant and VHI entered into a First Amendment to Employment Agreement (the “Rosen Amendment”)
to the Employment Agreement dated December 4, 2022 with Mr. Rosen (the “Rosen Employment Agreement”). The Rosen Amendment
provides for the appointment of Mr. Rosen to the position of interim CEO of each of the Registrant and VHI. All other terms of the Rosen
Employment Agreement remain in effect. This summary of the Rosen Amendment is qualified in its entirety
by reference to the full text of the Rosen Amendment, which is attached as Exhibit 10.2 to
this Current Report on Form 8-K and is incorporated herein by reference. Other than the Rosen Amendment, there are no arrangements or
understandings between Mr. Rosen and any other person pursuant to which he was selected for the position to which he was appointed.
In addition, on February 14, 2023, the Registrant
announced the appointment of Amber Shimpa, age 44, to the position of President of each of the Registrant and VHI. Ms. Shimpa has served
as VHI’s Chief Administrative Officer since December 2019 and as a member of the board of directors of the Registrant since March
2019. From January 2015 through December 2019, Ms. Shimpa served as the Registrant’s Chief Financial Officer. Ms.
Shimpa’s sister is married to Dr. Kingsley.
In connection with Ms. Shimpa’s appointment,
on February 13, 2023, the Registrant and VHI entered into a Third Amendment to Employment Agreement (the “Shimpa Amendment”)
to the Employment Agreement dated February 1, 2020, as subsequently amended (the “Shimpa Employment Agreement”), with Ms.
Shimpa. The Shimpa Amendment provides for Ms. Shimpa’s appointment to the position of President of each of the Registrant and VHI
and as CEO of the Registrant’s subsidiary, Vireo Health of Minnesota, LLC. All other terms of the Shimpa Employment Agreement, as
previously amended, remain in effect. This summary of the Shimpa Amendment is qualified in its entirety
by reference to the full text of the Shimpa Amendment, which is attached as Exhibit 10.3 to
this Current Report on Form 8-K and is incorporated herein by reference. Other than the Shimpa Amendment, there are no arrangements or
understandings between Ms. Shimpa and any other person pursuant to which she was selected for the position to which she was appointed.
| Item 9.01. |
Financial Statements and Exhibits |
(d) Exhibits.
| Exhibit No. |
Description |
| 10.1 |
Third Amendment to Employment Agreement among Goodness Growth Holdings, Inc., Vireo Health, Inc. and Kyle Kingsley, effective February 12, 2023 |
| 10.2 |
First Amendment to Employment Agreement among Goodness Growth Holdings, Inc., Vireo Health, Inc. and Joshua Rosen, effective February 12, 2023 |
| 10.3 |
Third Amendment to Employment Agreement among Goodness Growth Holdings, Inc., Vireo Health, Inc. and Amber Shimpa, effective February 12, 2023 |
| 99.1 |
Press Release dated February 14, 2023 |
| 104 |
Cover Page Interactive Data File (embedded within Inline XBRL document) |
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.
| |
GOODNESS GROWTH HOLDINGS, INC.
(Registrant) |
| |
|
| |
By: |
/s/ J. Michael Schroeder |
| |
|
J. Michael Schroeder |
| |
|
General Counsel and Corporate Secretary |
Date: February 17, 2023
Exhibit 10.1
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This Third Amendment to Employment
Agreement (“Third Amendment”) is made effective as of February 12, 2023 (“Effective Date”)
by and among Goodness Growth Holdings, Inc., a British Columbia corporation (“Parent”), Vireo Health,
Inc., a Delaware corporation (the “Employer”) and Kyle Kingsley, an individual residing in the State
of Minnesota (“Employee”) (collectively “Parties” or individually “Party”).
RECITALS
WHEREAS, Employer,
Parent and Employee entered into an Employment Agreement dated December 1, 2020, and a First Amendment to Employment Agreement dated February
2, 2022 and a Second Amendment to Employment Agreement erroneously dated February 2, 2022 but effective December 14, 2022 (collectively,
the “Current Agreement”); and
WHEREAS, Employer and
Employee have agreed to modify Employee’s title and duties; and
WHEREAS, the Parties
wish to amend the Current Agreement as set forth in this Amendment.
NOW, THEREFORE, in
consideration of the mutual covenants and conditions contained herein, the receipt and sufficiency of which are hereby acknowledged, Parent,
Employer and Employee, intending legally to be bound, hereby agree as follows:
AGREEMENT
1.
Position. Effective immediately, Employee shall become Executive Chairman of Parent and Employer, and shall resign the position
of Chief Executive Officer.
2.
Base Salary. Employee’s Base Salary shall be modified to USD$260,000 per year.
3.
Payments Upon Termination of Employment. Notwithstanding anything to the contrary in Section 6 of the Current Agreement,
all calculations of payments due to Employee as a result of the termination of Employee’s employment shall be made as if Employee’s
Base Salary were $360,000 per year.
4.
General. All capitalized terms used but not defined in this Third Amendment shall have the meanings ascribed in the Current
Agreement. All provisions of the Current Agreement not expressly modified by this Third Amendment are hereby ratified and confirmed.
THIS THIRD AMENDMENT TO
EMPLOYMENT AGREEMENT was voluntarily and knowingly executed by the Parties effective as of the Effective Date.
[Signature Page Follows]
| |
VIREO HEALTH, INC. |
| |
|
| Date: February 12, 2023 |
By: |
/s/ John Heller |
| |
John Heller |
| |
Chief Financial Officer |
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|
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|
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EMPLOYEE: |
| |
|
| Date: February 12, 2023 |
/s/ Kyle Kingsley |
| |
Kyle Kingsley |
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|
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|
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GOODNESS GROWTH HOLDINGS, INC. |
| |
|
| Date: February 12, 2023 |
By: |
/s/ John Heller |
| |
John Heller |
| |
Chief Financial Officer |
Exhibit 10.2
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment to Employment
Agreement (“First Amendment”) is made effective as of February 12, 2023 (“Effective Date”)
by and among Goodness Growth Holdings, Inc., a British Columbia corporation (“Parent”), Vireo Health,
Inc., a Delaware corporation (the “Employer”) and Joshua Rosen, an individual residing in the State
of Arizona (“Employee”) (collectively “Parties” or individually “Party”).
RECITALS
WHEREAS, Employer,
Parent and Employee entered into an Employment Agreement dated December 4, 2022 (the “Current Agreement”); and
WHEREAS, Employer and
Employee have agreed to modify Employee’s title; and
WHEREAS, the Parties
wish to amend the Current Agreement as set forth in this Amendment.
NOW, THEREFORE, in
consideration of the mutual covenants and conditions contained herein, the receipt and sufficiency of which are hereby acknowledged, Parent,
Employer and Employee, intending legally to be bound, hereby agree as follows:
AGREEMENT
5.
Position. Effective immediately, Employee shall become Chief Executive Officer (principal executive officer) of Parent and
Employer.
6.
General. All capitalized terms used but not defined in this First Amendment shall have the meanings ascribed in the Current
Agreement. All provisions of the Current Agreement not expressly modified by this First Amendment are hereby ratified and confirmed.
THIS FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT was voluntarily and knowingly executed by the Parties effective as of the Effective Date.
[Signature Page Follows]
| |
VIREO HEALTH, INC. |
| |
|
| Date: February 12, 2023 |
By: |
/s/ John Heller |
| |
John Heller |
| |
Chief Financial Officer |
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|
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|
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EMPLOYEE: |
| |
|
| Date: February 12, 2023 |
/s/ Joshua Rosen |
| |
Joshua Rosen |
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|
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|
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GOODNESS GROWTH HOLDINGS, INC. |
| |
|
| Date: February 12, 2023 |
By: |
/s/ John Heller |
| |
John Heller |
| |
Chief Financial Officer |
Exhibit 10.3
THIRD AMENDMENT TO EMPLOYMENT
AGREEMENT
This Third Amendment to Employment
Agreement (“Third Amendment”) is made effective as of February 12, 2023 (“Effective Date”)
by and among Goodness Growth Holdings, Inc., a British Columbia corporation (“Parent”), Vireo Health,
Inc., a Delaware corporation (the “Employer”) and Amber Shimpa, an individual residing in the State
of Minnesota (“Employee”) (collectively “Parties” or individually “Party”).
RECITALS
WHEREAS, Employer,
Parent and Employee entered into an Employment Agreement dated December 1, 2020, and a First Amendment to Employment Agreement dated February
2, 2022 and a Second Amendment to Employment Agreement erroneously dated February 2, 2022 but effective December 14, 2022 (collectively,
the “Current Agreement”); and
WHEREAS, Employer and
Employee have agreed to modify Employee’s title and appoint her to a specific office of a subsidiary of Employer; and
WHEREAS, the Parties
wish to amend the Current Agreement as set forth in this Amendment.
NOW, THEREFORE, in
consideration of the mutual covenants and conditions contained herein, the receipt and sufficiency of which are hereby acknowledged, Parent,
Employer and Employee, intending legally to be bound, hereby agree as follows:
AGREEMENT
7.
Position. Effective immediately, Employee shall become President of Parent and Employer, and Chief Executive Officer of
Employer’s subsidiary, Vireo Health of Minnesota, LLC.
8.
General. All capitalized terms used but not defined in this Third Amendment shall have the meanings ascribed in the Current
Agreement. All provisions of the Current Agreement not expressly modified by this Third Amendment are hereby ratified and confirmed.
THIS THIRD AMENDMENT TO
EMPLOYMENT AGREEMENT was voluntarily and knowingly executed by the Parties effective as of the Effective Date.
[Signature Page Follows]
| |
VIREO HEALTH, INC. |
| |
|
| Date: February 12, 2023 |
By: |
/s/ John Heller |
| |
John Heller |
| |
Chief Financial Officer |
| |
|
| |
|
| |
EMPLOYEE: |
| |
|
| Date: February 12, 2023 |
/s/ Amber Shimpa |
| |
Amber Shimpa |
| |
|
| |
|
| |
GOODNESS GROWTH HOLDINGS, INC. |
| |
|
| Date: February 12, 2023 |
By: |
/s/ John Heller |
| |
John Heller |
| |
Chief Financial Officer |
Exhibit 99.1
Goodness Growth Holdings
Announces Management Reorganization
– Josh Rosen promoted to role of Interim
Chief Executive Officer –
– Company Founder, Dr. Kyle Kingsley,
to assume role of Executive Chairman –
– Decentralized
state market teams designed to improve operating and financial performance –
MINNEAPOLIS, MN – February 14, 2023 –
Goodness Growth Holdings, Inc. ("Goodness Growth" or the "Company") (CSE: GDNS; OTCQX: GDNSF), a cannabis company
focused on providing safe access, quality products and great value to its customers, today announced the reorganization of several executive
roles and responsibilities, each of which are effective immediately. These changes result in a more decentralized organizational structure
which gives state-level operating teams greater flexibility to implement market-specific strategies in order to drive improved operations
and financial performance.
The Company announced that Josh Rosen has been
promoted to the role of Chief Executive Officer on an interim basis. Company founder, Dr. Kyle Kingsley, will assume the role of Executive
Chairman. Chief Administrative Officer Amber Shimpa has been promoted to the role of President of the Company and CEO of subsidiary Vireo
Health of Minnesota, LLC.
Executive Chairman Dr. Kyle Kingsley said, “Josh
has been an invaluable member of our organization throughout the course of his tenure on our board and most recently in his role as Interim
President. We believe he is uniquely suited to lead the Company’s transformation as Interim CEO. Our Company was built on a proud
foundation of medical and scientific leadership, but our industry is evolving with great complexity, and we believe Josh’s experience
and leadership will be instrumental in shaping our business with a more precise focus on localized operational excellence and disciplined
capital allocation.”
Josh Rosen commented, “I have always believed
that the Goodness Growth and Vireo teams have the potential to become true leaders in the future of this industry, with their medical
heritage and geographically attractive operations. I’m pleased with my initial two months of intense work and look forward to helping
the Company seize the opportunities in front of it. US cannabis companies are continuing to operate within many challenging environments
and our team has taken considerable measures recently to better position ourselves for the future. Some of these changes required difficult
decisions that impacted our workforce in New York and our home state of Minnesota, resulting in a leaner, more cohesive corporate team.”
Amber Shimpa commented, “I’m proud
to lead Vireo Health of Minnesota into the future, and look forward to working more closely with our team members and partner organizations
to improve the lives of patients and other Minnesotans who have been negatively impacted by the failed war on drugs. Our teams have identified
several focus areas that will be critical for us to execute upon successfully this year, and we look forward to discussing those initiatives
in more detail on our upcoming fourth-quarter and year-end results conference call next month.”
About
Goodness Growth Holdings, Inc.
Goodness
Growth Holdings, Inc. 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. The Company is evolving with the industry
and is in the midst of a transformation to being significantly more customer-centric across its operations, which include cultivation,
manufacturing, wholesale and retail business lines. Today, the Company is licensed to grow, process, and/or distribute cannabis in five
markets and operates 18 dispensaries across the United States. For more information about Goodness Growth Holdings, please visit www.goodnessgrowth.com.
Contact Information
Investor Inquiries:
Sam Gibbons
Vice President, Investor Relations
samgibbons@goodnessgrowth.com
(612) 314-8995
Media Inquiries:
Amanda Hutcheson
Senior Manager, Communications
amandahutcheson@goodnessgrowth.com
(919) 815-1476