Three high-level individuals at Harvest Health & Recreation (HRVSF) are willingly surrendering a large portion of their stock options, the company announced on Tuesday.
Harvest said CEO Steve White, Co-Executive Chairman Jason Vedadi, and operational leader Joe Sai -- are transferring 2.4 million stock options to the company, which will then be redistributed to lower-level employees.
A one-time accounting charge of around $10 million will be booked for the move in the Arizona-based company's fiscal first quarter.
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Those 2.4 million shares represent the bulk of 3 million or so stock options Harvest has distributed so far to what it terms "key personnel" -- i.e. high-level figures like White, Vedadi, and Sai.
In its announcement, Harvest said that "this award is meant to recognize both the accomplishments of the past year and the expected commitment to achieving profitability ahead."
Profitability has been elusive for the company, which has repeatedly posted bottom-line losses in spite of revenue growth that has been significant at times. In the company's most recently reported quarter, net revenue nearly tripled on a year-over-year basis while its net loss soared from around $450,000 to more than $39 million.
This was at least partially due to its aggressive acquisition strategy -- fairly typical among marijuana companies right now -- that is aimed at building Harvest into a significant multistate operator of cannabis dispensaries. Although this will dramatically increase its presence when and if all deals are completed, it has been costly.
Judging by the reaction of investors, the market is neither hot nor cold on the share-option transfer. Harvest's share price was down, but only by 1% or so at the close of trading Tuesday.
