SCHEDULE 13D: Flora Growth: Heinrich & Zero Gravity Labs Take 87% Stake

Michael Heinrich and Zero Gravity Labs Inc. have acquired beneficial ownership of 87.0% of Flora Growth Corp.'s common shares through a $150 million convertible note.

Summary

• Michael Heinrich, CEO of Zero Gravity Labs Inc. (0G), was appointed as a director and Chairman of Flora Growth Corp. on September 20, 2025.
• On October 22, 2025, Flora Growth Corp. shareholders approved the issuance of a convertible promissory note to 0G.
• The note, dated October 23, 2025, has a principal amount of $150,000,000 and is convertible into common shares at US$33.34 per share.
• The principal amount of the note underlies 4,499,100 common shares.
• An additional 403,120 common shares are projected to underlie the interest on the note through September 30, 2026.
• Combined, Michael Heinrich and 0G beneficially own 4,902,220 common shares, representing 87.0% of Flora Growth Corp.'s common shares.
• Previous warrants for 1,786,432 shares issued to 0G on September 19, 2025, were cancelled and replaced by this convertible note on October 23, 2025.

Sentiment

Score: 7

Explanation: The significant capital injection of $150 million and the strong commitment from a key insider (Michael Heinrich) taking an 87% stake are generally positive signals for the company's stability and future direction, despite potential dilution for existing shareholders.

Positives

• Significant capital injection of $150,000,000 into Flora Growth Corp. via a convertible promissory note.
• Increased alignment of interests between a major investor (Michael Heinrich/0G) and the company through a substantial beneficial ownership stake (87.0%).
• Appointment of Michael Heinrich as Chairman of the Board brings strong leadership and strategic direction from a significant shareholder.

Negatives

• Potential for significant dilution for existing shareholders upon conversion of the $150,000,000 convertible note into 4,902,220 common shares.
• Concentration of 87.0% beneficial ownership by a single entity (Michael Heinrich/0G) could reduce liquidity and influence of other shareholders.

Risks

• Dilution Risk: Conversion of the $150,000,000 convertible note into 4,902,220 common shares could significantly dilute the ownership percentage of existing shareholders.
• Concentrated Ownership Risk: The beneficial ownership of 87.0% by Michael Heinrich and Zero Gravity Labs Inc. could lead to reduced market liquidity and potential governance issues for minority shareholders.
• Conversion Price Risk: The conversion price of US$33.34 per share may not reflect future market value, potentially impacting the value for other shareholders if the stock trades below this price.

Future Outlook

The filing primarily details a change in beneficial ownership and a capital injection, rather than providing explicit forward-looking statements or guidance on future operations or financial performance beyond the conversion of the note.

Management Comments

• Michael Heinrich was appointed as a director and the Chairman of the Board of Flora Growth Corp. as of September 20, 2025.

Industry Context

This filing indicates a significant consolidation of ownership and a substantial capital infusion into Flora Growth Corp. by a key insider and his affiliated entity. Such a large stake (87.0%) is unusual for a publicly traded company and suggests a potential shift towards private control or a major strategic realignment, which could impact its competitive positioning within its industry. It could also signal strong confidence from the insider in the company's future, or a move to restructure or recapitalize the business.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• The Reporting Person and Zero Gravity Labs Inc. have not been convicted in a criminal proceeding or been a party to a civil proceeding subject to a judgment, decree, or final order related to securities laws in the last five years.

Related Party Transactions

• Flora Growth Corp. issued a $150,000,000 convertible promissory note to Zero Gravity Labs Inc., an entity owned and controlled by Michael Heinrich, who is also a director and Chairman of Flora Growth Corp. This constitutes a related party transaction.

Stakeholder Impact

• Shareholders: Potential for significant dilution upon conversion of the note. Increased control by a single entity (87.0%) may reduce influence for minority shareholders.
• Company (Flora Growth Corp.): Receives a substantial capital injection of $150,000,000, which can be used for operations, growth, or debt reduction.
• Management: Michael Heinrich, as Chairman and CEO of 0G, gains significant control over the company's strategic direction.

Next Steps

• Conversion of the convertible promissory note into common shares at the option of Zero Gravity Labs Inc. at US$33.34 per share.

Key Dates

Recommendation

While the $150 million capital injection and strong insider commitment are positive for the company's stability, the significant potential dilution from the convertible note and the concentration of 87.0% ownership by a single entity introduce considerable uncertainty for existing minority shareholders. Investors should hold to observe the strategic direction under the new ownership structure and the impact of the conversion on share price and liquidity before making further investment decisions.

Keywords

Flora Growth Corp, Michael Heinrich, Zero Gravity Labs Inc, Convertible Note, Beneficial Ownership, Schedule 13D, Equity Stake, Capital Raise, Corporate Governance, Chairman Appointment, Dilution