Clever Leaves Announces Voluntary Delisting and SEC Deregistration

Rhea-AI Summary

Clever Leaves Holdings Inc. (NASDAQ: CLVR, CLVRW) announced a voluntary delisting and SEC deregistration of its common shares and warrants from Nasdaq to terminate reporting obligations. The last day of trading on Nasdaq is expected to be on or about May 16, 2024. The Company plans to suspend reporting obligations under the Exchange Act by filing a Form 15 with the SEC. The Board's decision was based on careful evaluation of factors including non-compliance with Nasdaq listing requirements and high regulatory costs.

Positive

• Voluntary delisting and SEC deregistration of common shares and warrants from Nasdaq
• Expected last day of trading on Nasdaq around May 16, 2024
• Filing of Form 15 with the SEC to suspend reporting obligations under the Exchange Act
• Board's decision based on evaluation of factors including non-compliance with Nasdaq listing requirements and high regulatory costs

Negative

• Termination of reporting obligations may impact transparency for investors
• Delisting from Nasdaq could reduce liquidity and visibility for the Company's securities
• High regulatory costs and reporting requirements may have been unsustainable for the Company

Insights

Financial Analyst

The decision by Clever Leaves to delist from Nasdaq and deregister its securities is a decisive strategic move, reflecting the management's assessment of the costs and benefits of being a publicly traded company. The key financial takeaway is the expectation of reduced operating expenses due to the cessation of reporting obligations. While this may streamline costs, it also means less visibility and potentially less liquidity for current investors as the stocks transition to over-the-counter trading. The cessation of SEC reporting also limits investors' access to company information, which could lead to wider bid-ask spreads and more volatility. It could also be indicative of deeper financial constraints, such as a challenge in meeting Nasdaq's listing requirements. Investors should monitor the company's financial health through the final publicly available reports and consider the implications of reduced transparency moving forward.

Securities Law Expert

From a legal standpoint, the process of delisting and deregistration is both complex and tightly regulated. The company's planned submission of a Form 25 to the SEC to initiate delisting, followed by a Form 15 to suspend reporting obligations, adheres to the established protocols. This decision also has legal implications for shareholders. The termination of Exchange Act reporting means shareholders must rely on alternative sources for information and the company's governance becomes less scrutinized by the broader investing public. The 90-day effectiveness period for the deregistration following the Form 15 filing affords investors a limited time to evaluate their positions under this new context. Shareholders should be aware that this corporate action may also signal a shift in the company's long-term strategy, which could be related to a private acquisition, restructuring, or a pivot in business focus.

TOCANCIPÁ, Colombia, April 26, 2024 (GLOBE NEWSWIRE) -- Clever Leaves Holdings Inc. (NASDAQ: CLVR, CLVRW) (“Clever Leaves” or the “Company”), a global medicinal cannabis company, today announced that its Board of Directors (the “Board”) determined to voluntarily delist its common shares, without par value (the “common shares”) and warrants, each exercisable for 1/30th common share at an exercise price of $11.50 (the “Warrants” and together with the common shares, the “Securities”) from The Nasdaq Stock Market LLC (“Nasdaq”) and deregister its Securities in order to terminate and suspend its reporting obligations under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).

The Company today notified Nasdaq of its intention to voluntarily delist its Securities from Nasdaq. The Company intends to file a Form 25 with the Securities and Exchange Commission (“SEC”) to effect the delisting and deregistration of its Securities on or about May 6, 2024 to effect the delisting from Nasdaq and the deregistration of the Securities under Section 12(b) of the Exchange Act. As a result, the Company expects the last day of trading of its Securities on Nasdaq will be on or about May 16, 2024.

Following the delisting of the Company’s Securities from Nasdaq, the Company intends to file a Form 15 with the SEC on or about May 16, 2024 to suspend its reporting obligations under the Exchange Act. As a result of the filing of the Form 15, the Company’s obligation to file certain Exchange Act reports and forms with the SEC, including Forms 10-K, 10-Q, and 8-K, will cease. Other SEC filing requirements will terminate upon the effectiveness of the deregistration. The Company expects that the deregistration of its Securities will become effective 90 days after the filing of the Form 15 with the SEC. The documents filed with the SEC will be available on the Company’s website below.

The Board’s decision comes as part of its evaluation of internal and external options and is the product of careful review and careful consideration of a number of factors, including, but not limited to, the Company’s previous and likely future non-compliance with the continued listing requirements of Nasdaq that would eventually result in delisting of the Securities by Nasdaq and the required personnel resources and the high costs relating to Exchange Act and Nasdaq disclosure and reporting requirements and related regulatory burdens, which have resulted and would continue to result in significant operating expense.

About Clever Leaves Holdings Inc.

Clever Leaves is a global medical cannabis company. Its operations in Colombia produce EU GMP cannabinoid active pharmaceutical ingredients (API) and finished products in flower and extract form to a growing base of B2B customers around the globe. Clever Leaves aims to disrupt the traditional cannabis production industry by leveraging environmentally sustainable, ESG-friendly, industrial-scale and low-cost production methods, with the world’s most stringent pharmaceutical quality certifications.

Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “evolve,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “opportunity,” “outlook,” “pipeline,” “plan,” “predict,” “potential,” “projected,” “seek,” “seem,” “should,” “will,” “would” and similar expressions (or the negative versions of such words or expressions) that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. Important factors that may affect actual results or the achievability of the Company’s expectations include, but are not limited to: (i) our ability to file a Form 25 and the timing of such filing, (ii) the last trading day of our securities on Nasdaq, (iii) our ability to file a Form 15 and the timing of such filing, (iv) the timing of the effectiveness of the Form 15, (v) the Company’s cost savings as it relates to “going dark,” (vi) the Company’s ability to minimize its high costs relating to Exchange Act and Nasdaq disclosure and reporting requirements and related regulatory burdens, and (vii) other important factors that are described in “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and subsequent periodic reports filed with the SEC. All subsequent written and oral forward-looking statements concerning Clever Leaves and attributable to Clever Leaves or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Clever Leaves expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

Clever Leaves Investor Inquiries:
Cody Slach or Jackie Keshner
Gateway Group, Inc.
+1-949-574-3860
CLVR@gateway-grp.com

FAQ

Why did Clever Leaves announce a voluntary delisting and SEC deregistration?

Clever Leaves announced the delisting and deregistration to terminate reporting obligations under the Exchange Act due to factors such as non-compliance with Nasdaq listing requirements and high regulatory costs.

When is the expected last day of trading for Clever Leaves' Securities on Nasdaq?

The last day of trading on Nasdaq is anticipated to be on or about May 16, 2024.

What form will Clever Leaves file with the SEC to suspend reporting obligations?

Clever Leaves intends to file a Form 15 with the SEC to suspend reporting obligations under the Exchange Act.

What led to the Board's decision for the voluntary delisting and SEC deregistration?

The Board's decision was based on factors like non-compliance with Nasdaq listing requirements and high regulatory costs that would result in significant operating expenses.