Clever Leaves Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

LEASES

LEASES

12 Months Ended

Dec. 31, 2023

On January 1, 2022, the Company adopted the accounting standard ASC 842, Leases, using the modified retrospective method. We elected this adoption date as our date of initial application. As a result, we have not updated financial information related to, nor have we provided disclosures required under ASC 842 for, periods prior to January 1, 2022. The primary changes to our policies relate to recognizing most leases on our statement of financial position as liabilities with corresponding right-of-use ("ROU") assets.

The Company has entered into agreements under which we lease various real estate spaces in North America and Latin America under non-cancellable leases that expire on various dates through calendar year 2029. Some of our leases include options to extend the term of such leases for a period from 12 months to 60 months, and/or have options to terminate the lease early. Some of our leases require us to pay certain operating expenses in addition to base rent, such as taxes, insurance and maintenance costs.

As the Company’s leases do not typically provide an implicit rate, the Company utilizes the appropriate incremental borrowing rate, determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment.

Practical Expedients

The modified retrospective approach included a package of optional practical expedients that we elected to apply. Among other things, these expedients permitted us not to reassess prior conclusions regarding lease identification, lease classification and initial direct costs under ASC 842. The Company does not separate lease and non-lease components in determining ROU assets or lease liabilities for real estate leases. Additionally, the Company does not recognize ROU assets or lease liabilities for leases with original terms or renewals of one year or less.


	Financial Statement Classification	Year Ended December 31, 2023		Year Ended December 31, 2022
Operating lease costs:
Operating lease costs-Fixed	General and administrative	624		1,321
Short Term Lease Expense	General and administrative	122		119
Sub-lease income	General and administrative	—		(212)
Operating lease costs	Inventory	—		154
Total lease costs		$	746	$	1,382

The table above includes amounts relating to the Company's lease costs, which includes net costs recognized in our operating expenses during the period, including amounts capitalized as part of the costs of Inventory, in accordance with ASC 330. Variable lease costs primarily include maintenance, utilities and operating expenses that are incremental to the fixed base rent payments and are excluded from the calculation of operating lease liabilities and ROU assets. For year ended December 31, 2023 and 2022, cash paid for amounts associated with our operating lease liabilities was approximately $829 and $1,611, respectively, which was classified as operating activities in the consolidated statement of cash flows.

The following table shows our undiscounted future fixed payment obligations under our recognized operating leases and a reconciliation to the operating lease liabilities as of December 31, 2023:


Leases and a reconciliation to the operating lease liabilities as of December 31, 2023
2024	$	396
2025	205
2026	168
2027	122
2028	78
Thereafter	9
Total future fixed operating lease payments	$	978

Less: Imputed interest	$	109
Total operating lease liabilities	$	869

Weighted-average remaining lease term - operating leases	3.15
Weighted-average discount rate - operating leases	8.59		%