Clever Leaves Holdings Inc. (Nasdaq: CLVR) (“Clever Leaves” or the
“Company”), a multinational operator and licensed producer of
pharmaceutical-grade cannabinoids, today announces the closing of a
$25.0 million financing from Catalina LP (“SunStream”), an
affiliate of SunStream Bancorp Inc., a joint venture initiative
sponsored by Sundial Growers Inc. (Nasdaq: SNDL), and the repayment
of the outstanding principal amount of the secured convertible
notes due March 30, 2022 (the “2022 Convertible Notes”).
SunStream’s $25 Million Infusion of
Capital
Clever Leaves issued a secured convertible note
(the “Convertible Note”) to SunStream with an interest rate of 5.0%
per annum (subject to increase in the event of certain events of
default) and a three-year maturity. Interest on the Convertible
Note is payable on a quarterly basis, either in cash or by
increasing the principal amount on the Convertible Note, at the
Company’s election.
Subject to certain limitations, SunStream may
convert the principal and accrued interest on the Convertible Note
into Clever Leaves’ common shares, without par value, at a price of
$13.50 per share. Under this conversion feature, up to $12.5
million in aggregate principal on the Convertible Note may be
converted within one year of issuance, subject to certain
additional limitations.
Each of Clever Leaves and SunStream may elect to
convert, subject to certain limitations, and in increments the
outstanding principal and accrued interest on the Convertible Note
into common shares, at a price per share equal to the greater of an
8.0% discount to the closing price per share on the applicable
redemption date or a floor conversion price. Subject to certain
additional limitations, no more than $12.5 million in aggregate
principal on the Convertible Note may be converted within one year
of issuance. Subject to certain limitations, the holder of the note
may elect to receive cash repayment of principal and accrued
interest on the Convertible Note. The obligations of the Company
under the Convertible Note are guaranteed by certain of the
Company’s subsidiaries. The Company also agreed to register with
the SEC for resale all common shares issued or issuable with
respect to the Convertible Note.
Repayment of 2022 Convertible Notes:
Over $3 Million in Principal Reduction and Interest
Savings
On July 19, 2021, Clever Leaves fully repaid its
2022 Convertible Notes, and the 2022 Convertible Notes were
discharged. The aggregate amount paid represented the sum of 90.0%
of the aggregate $27.8 million outstanding principal amount owing
under the 2022 Convertible Notes, accrued interest through July 19,
2021, and legal fees.
“We are always looking at ways to optimize our
financing arrangements, and we are grateful to receive this support
from SunStream, which is a testament to the strength of our
industry relationships and value proposition. Further, this
financing meaningfully strengthens our balance sheet and reflects
our commitment to opportunistically pursue value creation
opportunities for our shareholders,” said Kyle Detwiler, CEO of
Clever Leaves. “This financing immediately adds value to our
shareholders by reducing existing indebtedness, reducing pro forma
cash interest expense, and improving our liquidity with which to
finance our growth. The combination of the SunStream Convertible
Note and the repayment of the 2022 Convertible Notes created
approximately $2.8 million of value through the discounted
repayment, as well as cash interest savings of approximately $0.6
million through the previous maturity of the 2022 Convertible Notes
or approximately $1.0 million per year when comparing the pro forma
annual run rate cash interest costs. With this financing, we expect
to have greater flexibility to pursue new strategic growth
opportunities, including new partnerships and acquisitions. We
remain dedicated to being disciplined stewards of capital, and we
look forward to further developing our partnership with SunStream
over time.”
Further detail on the terms, limitations, and
features of the Convertible Note and the transactions described in
the press release can be found in the accompanying Current Report
on Form 8-K to be filed in conjunction with this release.
About Clever Leaves Holdings
Inc.
Clever Leaves is a multinational cannabis company with an
emphasis on ecologically sustainable, large-scale cultivation and
pharmaceutical-grade processing as the cornerstones of its global
cannabis business. With operations and investments in the United
States, Canada, Colombia, Germany and Portugal, Clever Leaves has
created an effective distribution network and global footprint,
with a foundation built upon capital efficiency and rapid growth.
Clever Leaves aims to be one of the industry’s leading global
cannabis companies recognized for its principles, people, and
performance while fostering a healthier global community. Clever
Leaves has received multiple international certifications that have
enabled it to increase its export and sales capacity from its
Colombian operations, including European Union Good Manufacturing
Practices (EU GMP) Certification, a Good Manufacturing Practices
(GMP) Certification by Colombia National Food and Drug Surveillance
Institute - Invima, and Good Agricultural and Collecting Practices
(GACP) Certification. Clever Leaves was granted a license in
Portugal from Infarmed – the Portuguese health authority – which
allows Clever Leaves to cultivate, import and export dry flower for
medicinal and research purposes. In addition, the Portuguese
operation was granted certification of compliance with GACP and
IMC-GAP.
For more information, please visit
https://cleverleaves.com/en/home/ and follow us on LinkedIn.
Forward-Looking Statements
This press release includes certain 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 materially from the forward-looking
statements. Important factors that may affect actual results or
cause them to differ materially from the Company’s expectations
include, but are not limited to: (i) expectations with respect to
future operating and financial performance and growth, including if
or when Clever Leaves will become profitable; (ii) Clever Leaves’
ability to execute its business plans and operating strategy and to
receive regulatory approvals; (iii) Clever Leaves’ ability to
capitalize on expected market opportunities, including the timing
and extent to which cannabis is legalized in various jurisdictions;
(iv) global economic and business conditions, including in the
industries in which we compete; (v) geopolitical events, natural
disasters, acts of God and pandemics, including the economic and
operational disruptions and other effects of COVID-19, such as
travel restrictions, disruptions to physical shipments, outright
bans on imported products, delays in issuing licenses and permits,
delays in hiring necessary personnel to carry out sales,
interruptions to cultivation and other tasks, and financial
pressures upon Clever Leaves and its customers; (vi) regulatory
developments in key markets for the company's products, including
international regulatory agency coordination and increased quality
standards imposed by certain health regulatory agencies, failure to
otherwise comply with laws and regulations; (vii) uncertainty with
respect to the requirements applicable to certain cannabis products
as well the permissibility of sample shipments, and other risks and
uncertainties; (viii) consumer, legislative, and regulatory
sentiment or perception regarding Clever Leaves’ products; (ix)
lack of regulatory approval and market acceptance of Clever Leaves’
new products; (x) the extent to which Clever Leaves’ is able to
monetize its existing THC market quota within Colombia; (xi) demand
for Clever Leaves’ products and Clever Leaves’ ability to meet
demand for its products and negotiate agreements with existing and
new customers; (xii) development of product enhancements and
formulations with commercial value and appeal; (xiii) product
liability claims exposure; (xiv) lack of a history and experience
operating a business on a large scale and across multiple
jurisdictions; (xv) limited experience operating as a public
company; (xvi) changes in currency exchange rates and interest
rates; (xvii) weather and agricultural conditions and their impact
on the Company’s cultivation and construction plans, (xviii) Clever
Leaves’ ability to hire and retain skilled personnel in the
jurisdictions where it operates; (xix) Clever Leaves’ rapid growth,
including growth in personnel; (xx) Clever Leaves’ ability to
remediate any material weakness in its internal control cover
financial reporting and to develop and maintain effective internal
and disclosure controls; (xxi) potential litigation; (xxiii) access
to additional financing on acceptable terms, or at all; and (xxiv)
completion of our construction initiatives and other capital
expenditures on time and on budget. The foregoing list of factors
is not exclusive. Additional information concerning certain of
these and other risk factors is contained in Clever Leaves’ most
recent filings 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 and Jackie KeshnerGateway Investor
Relations+1-949-574-3860CLVR@gatewayir.com
Clever Leaves Press
Contacts:McKenna MillerKCSA Strategic
Communications+1-347-487-6197mmiller@kcsa.com
Diana SigüenzaStrategic Communications
Director+57-310-236-8830diana.siguenza@cleverleaves.com
Clever Leaves Commercial
Inquiries:Andrew MillerVice President Sales - EMEA, North
America, and
Asia-Pacific+1-416-817-1336andrew.miller@cleverleaves.com
Sundial Growers (NASDAQ:SNDL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Sundial Growers (NASDAQ:SNDL)
Historical Stock Chart
From Sep 2023 to Sep 2024