Flora Growth Corp.

Except as discussed below, there have been no material changes to the risk factors described in the 2024 Annual Report.

Our financial results and the market price of our common shares may be affected by the prices of digital assets.

As part of our capital allocation strategy for assets that are not required to provide working capital for our ongoing operations, we have invested, and may invest more, in digital assets. The price of digital assets has historically been subject to price fluctuations and volatility. Moreover, digital assets are relatively novel and the application of securities laws and other regulations to such digital assets may be unclear in some respects. It is possible that regulators may interpret laws and/or regulations in a manner that adversely affects the liquidity or value of digital assets.

Any decrease in the fair value of our digital assets could require us to incur an unrealized loss on the digital asset investment, and such charge could be material to our financial results for the applicable reporting period, which may create significant volatility in our reported earnings. Any decrease in reported earnings or increased volatility of such earnings could have a material adverse effect on the market price of our common shares. In addition, the application of generally accepted accounting principles in the United States with respect to digital assets remains uncertain in some respects, and any future changes in the manner in which we account for our digital assets could have a material adverse effect on our financial results and the market price of our common shares.

In addition, if investors view the value of our common shares as dependent upon or linked to the value or change in the value of our digital asset holdings, the price of our digital assets may significantly influence the market price of our common shares.

If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our digital assets, we may lose some or all of our digital assets and our financial condition and results of operations could be materially adversely affected.

Security breaches and cyberattacks are of particular concern with respect to our investment in digital assets. While we use highly reviewed and audited custody solutions, a successful security breach or cyberattack could result in a partial or total loss of our digital assets in a manner that may not be covered by insurance or indemnity provisions of our custody agreements with those custodians. Such a loss could have a material adverse effect on our financial condition and results of operations.

On May 2, 2025, the Company entered into a securities purchase agreement with certain investors (the "Investors") in connection with the issuance and sale by the Company to the Investors via a private placement pursuant to Rule506(b) of Regulation D under the Securities Act (the "Private Placement") of an aggregate of 3,133,011 common shares of the Company, no par value per share at a purchase price of $0.30 per share (the "May Common Shares") and 726,992 pre-funded warrants of the Company at a purchase price of $0.2999 per warrant (the "Pre-funded Warrants") each to purchase one common share which shall be immediately exercisable and expire when exercised in full, at an exercise price of $0.0001 per share. The Company filed a registration statement on Form S-3 on May 14, 2025 (File No. 333-287261), which was declared effective by the SEC on May 22, 2025, that registers the May Common Shares and common shares underlying Pre-Funded Warrants by the selling securityholders named therein. The net proceeds from the sale of the May Common Shares and Pre-funded Warrants were approximately $1.1 million after deducting estimated expenses relating to the Private Placement. The Company used $0.4 million of the net proceeds from the Private Placement to purchase Solana, $0.4 million to purchase Ethereum, $0.1 million to purchase Sui, $0.1 million to purchase Ripple, and the balance for general corporate and working capital purposes and to pay any fees and expenses in connection with the issuance of the May Common Shares and the Pre-funded Warrants.

None.

Not applicable.