Flora Growth Shareholders Approve ZeroStack Rebrand and Executive Stock Options Amidst -85.80% Two-Year Return
Flora Growth Corp. (NASDAQ: FLGC) shareholders delivered a decisive mandate on December 19, 2025, overwhelmingly approving the company's planned name change to ZeroStack Corp. at a Special Meeting. The approval, which saw 307,327 votes 'For' the measure compared to 53,559 'Against,' signals a formal pivot toward the distributed AI sector, despite the stock having recorded a staggering -85.80% total return over the preceding two years.
Corporate Overhaul Signals Shift to Decentralized AI
The name change is central to Flora Growth’s strategy to become the first public company offering exposure to Decentralized AI through the accumulation of $0G, the native cryptocurrency of the distributed AI infrastructure project 0G. The Board of Directors now has the discretion to file the necessary amendments to effect the name change.
In addition to the rebrand, shareholders approved a second key proposal granting the Board the authority to create a new class of preferred shares, issuable in series. This measure passed with 165,494 votes 'For' and 32,278 'Against' (excluding broker non-votes), providing the company with greater flexibility in future capital raises and strategic transactions.
The decisive vote in favor of the ZeroStack name change underscores shareholder support for the company's strategic shift away from its legacy operations and into the high-growth, yet volatile, Decentralized AI infrastructure market.
Dilution Risk Heightened by Executive Compensation Plans
While the strategic pivot was approved, shareholders also passed measures that introduce significant potential dilution, a move that may concern investors given the company's recent stock performance.
The third proposal approved an amendment (the “2022 Plan Amendment”) to the Company's 2022 Incentive Compensation Plan. This amendment substantially increases the number of Common Shares issuable under the plan:
- The share pool was increased from 115,385 shares to 10% of the fully diluted Common Shares as of the approval date.
- The number of Incentive Stock Options (ISOs) issuable was increased from 21,795 to the lower of 2,000,000 or the number of Common Shares issued and outstanding.
This proposal passed with 167,124 votes 'For' and 30,477 'Against' (excluding broker non-votes). Furthermore, shareholders approved a separate proposal to grant stock options to the Company's Chief Executive Officer, Chief Financial Officer, and Executive Chairman, further tying executive compensation to future stock performance.
Financial Context: Volatility and Poor Risk-Adjusted Returns
The corporate restructuring and compensation approvals occur against a backdrop of severe financial underperformance for FLGC stock. Over the two years leading up to the meeting, the stock exhibited extreme volatility and poor returns:
- Total Return (2 years): -85.80%
- Annualized Return (2 years): -62.32%
- Sharpe Ratio (2 years): -3.39
The negative Sharpe Ratio of -3.39 indicates that the company has delivered exceptionally poor risk-adjusted returns, suggesting that the high volatility (Standard Deviation of Close Price: 18.38) has not been compensated by positive gains. The stock's latest open price was $8.08, closing at $7.31, highlighting continued price instability as the company transitions its business model.
The move to ZeroStack and Decentralized AI represents a high-stakes attempt to reverse the negative trajectory, betting on the future growth of distributed computing and cryptocurrency integration to deliver shareholder value.
