Verano to Restate Previously Issued Financial Statements
1.9 min readPublished On: July 28th, 2022By News Team
CHICAGO – Verano Holdings Corp. (CSE: VRNO) (OTCQX: VRNOF, a multi-state cannabis company, announced as a result of internal compensation and tax reviews, certain accounting errors were uncovered and it will be required to restate each of the previously issued financial statements set forth below (collectively, the “Prior Period Financials”), all of which, together with all related disclosures, previously furnished or filed reports, earnings releases, investor presentations or similar communications, should therefore no longer be relied upon.
The restatements will include (i) the revaluation of the Company’s stock-based compensation expense for each of the Prior Period Financials and (ii) the recalculation of the Company’s tax expense for the Q1 2022 Report.
The Audit Committee determined that the Company’s stock-based compensation expense in connection with the Company’s restricted stock units was understated in each of the Prior Period Financials (i) primarily as a result of calculating such expense as if each restricted stock unit vested into one share of the Company’s Class A subordinate voting shares (“SV Shares”) instead of 100 SV Shares and (ii) to a lesser extent, as a result of, among other things, using the Black-Scholes option pricing model to value such restricted stock units instead of the date of grant trading price of the SV Shares underlying such restricted stock units, as listed on the Canadian Securities Exchange. As a result of such understated stock-based compensation expense, the Company’s tax expense in each of the Prior Periods Financials was overstated, and accordingly, the Company’s tax obligation will be reduced.
Additionally, the Audit Committee determined that the Company’s tax expense for the Q1 2022 Report was overstated due to a clerical error in the effective tax rate calculation, and accordingly, the Company’s tax obligation will be reduced.
The Company will, as soon as practicable, make the appropriate adjustments to the Prior Period Financials by filing amendments to the Q1 2021 Report, Q2 2021 Report, Q3 2021 Report, Q1 2022 Report and Annual Report on SEDAR and the Form 10 with the SEC, which, in each case, will include restated consolidated financial statements and any other appropriate revisions.
(This information is primarily sourced from Verano Holdings Corp. Highly Capitalized has neither approved nor disapproved the contents of this news release. Read our Disclaimer here).
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