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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
September 13, 2022
Clever Leaves Holdings Inc.
(Exact
name of registrant as specified in its charter)
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British Columbia, Canada |
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001-39820 |
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Not Applicable |
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(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
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Bodega 19-B Parque Industrial Tibitoc P.H
Tocancipá - Cundinamarca, Colombia
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251017 |
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(Address of principal executive offices) |
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(Zip Code) |
(561) 634-7430
(Registrant’s
telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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☐ |
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class |
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Trading Symbol (s) |
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Name of each exchange on which registered |
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Common shares without par value |
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CLVR |
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The Nasdaq Stock Market LLC |
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Warrants, each warrant exercisable for one common share at an
exercise price of $11.50 |
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CLVRW |
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The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the
Exchange Act. ☐
Item 4.01. Change in Registrant’s Certifying
Accountant.
(a) Dismissal of Independent Registered Public Accounting
Firm
On September 13, 2022, Clever Leaves Holdings Inc. (the “Company”)
notified BDO Canada LLP (“BDO”) of its dismissal as the Company’s
independent registered public accounting firm effective as of that
date. The dismissal of BDO was approved by the audit committee of
the board of directors of the Company (the “Audit Committee”). The
decision by the Audit Committee was made to reduce ongoing costs
related to the Company’s annual audit.
BDO’s reports on the Company’s financial statements for each of the
years ended December 31, 2021 and 2020 did not contain any adverse
opinion or a disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope, or accounting principles,
with the exception that BDO’s report dated March 24, 2022 contained
the following explanatory paragraph: “The accompanying consolidated
financial statements have been prepared assuming that the Company
will continue as a going concern. As more fully described in Note
2, the Company has a significant working capital deficiency, had an
accumulated deficit as of December 31, 2021, as well as operating
losses and negative cash flows from operations since inception and
expects to continue to incur net losses for the foreseeable future
until such time that it can generate significant revenues from the
sale of its available inventories. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are
also described in Note 2. The consolidated financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.”
During each of the years ended December 31, 2021 and 2020, and the
subsequent interim period through September 14, 2022, there were no
“disagreements” as that term is defined in Item 304(a)(1)(iv) of
Regulation S-K between the Company and BDO on any matter of
accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of BDO, would have caused BDO to make
reference to the subject matter of the disagreement in its reports
on the Company’s financial statements for such years.
There were no “reportable events” as that term is defined in Item
304(a)(1)(v) of Regulation S-K during each of the years ended
December 31, 2021 and 2020, and the subsequent interim period
through September 14, 2022, except for those described
below.
i.The
Company identified material weaknesses in its internal control over
financial reporting. The material weaknesses related to the
Company’s failure to
design and maintain an effective control environment, specifically
around (a) lack of a sufficient number of trained professionals
with an appropriate level of accounting knowledge, training and
experience to appropriately analyze, record and disclose accounting
matters timely and accurately, and to allow for proper segregation
of duties; (b) lack of structures, reporting lines and appropriate
authorities and responsibilities to achieve financial reporting
objectives; and (c) lack of evidence to support the performance of
controls and the adequacy of review procedures, including the
completeness and accuracy of information used in the performance of
controls.
These material weaknesses were identified and initially reported in
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2020, and have not been remediated as of the date of
this Form 8-K.
ii.On
May 14, 2021, the Company filed Amendment No. 1 to its Annual
Report on Form 10-K for the year ended December 31, 2020, which was
originally filed with the Securities and Exchange Commission
(“SEC”) on March 30, 2021, to restate its consolidated financial
statements and related disclosures as of and for the year ended
December 31, 2020. On April 12, 2021, the Staff of the SEC released
a statement (the “SEC Statement”) expressing the view that warrants
issued by special purpose acquisition companies may require
classification as a liability of the entity measured at fair value,
with changes in fair value each period reported in earnings. The
Company had previously classified its private placement warrants
(the “private warrants”) and public warrants (the “public warrants”
and, together with the private warrants, the “warrants”) as equity.
As a result of the SEC Statement, the Company reevaluated the
accounting treatment of the warrants and decided that it would
subsequently
measure the private warrants at fair value with changes in fair
value recognized as a gain or loss in the Company’s consolidated
statements of operations and comprehensive loss.
Accordingly, the Company’s consolidated financial statements as of
December 31, 2020 were restated to correct the accounting and
related disclosure for the warrants.
The Audit Committee discussed the reportable events described above
with BDO, and the Company has authorized BDO to respond fully to
the inquiries of Marcum LLP (“Marcum”), the Company’s new
independent registered public accounting firm, concerning these
reportable events, as described below.
The Company provided BDO with a copy of this Current Report on Form
8-K prior to its filing with the SEC and requested that BDO furnish
it with a letter addressed to the SEC stating whether or not it
agrees with the above statements. A copy of BDO’s letter, dated
September 14, 2022, is filed as Exhibit 16.1 to this Current Report
on Form 8-K.
(b) Engagement of New Independent Registered Public Accounting
Firm
On September 14, 2022, the Company engaged Marcum to serve as the
Company’s independent registered public accounting firm, effective
immediately. The Audit Committee approved the decision to engage
Marcum and appointed Marcum as the Company’s independent registered
public accounting firm for the year ending December 31,
2022.
During each of the years ended December 31, 2021 and 2020, and the
subsequent interim period through September 14, 2022, neither the
Company nor anyone acting on its behalf has consulted with Marcum
regarding (i) the application of accounting principles to a
specified transaction, either completed or proposed, or the type of
audit opinion that might be rendered on the Company’s financial
statements, and neither a written report nor oral advice was
provided to the Company that Marcum concluded was an important
factor considered by the Company in reaching a decision as to any
accounting, auditing, or financial reporting issue; (ii) any matter
that was the subject of a disagreement within the meaning of Item
304(a)(1)(iv) of Regulation S-K; or (iii) any reportable event
within the meaning of Item 304(a)(1)(v) of Regulation
S-K.
Item 9.01. Financial Statements and Exhibits.
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Exhibit No. |
Description |
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16.1 |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly
authorized.
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Clever Leaves Holdings Inc. |
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By: |
/s/ David M. Kastin |
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Name: |
David M. Kastin |
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Title: |
General Counsel and Corporate Secretary |
Date: September 14, 2022
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