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

Annual report pursuant to Section 13 and 15(d)

SIGNIFICANT ACCOUNTING POLICIES (Tables)

SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2020

Accounting Changes and Error Corrections [Abstract]

Schedule of Property, Plant and Equipment

Depreciation begins when the asset becomes available for use and is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:


			Estimated Useful Life (In Years)

Land			N/A – indefinite
Buildings & warehouse			2 – 40 years
Leasehold improvements			Shorter of lease term or useful life
Furniture and appliances			5 years
Agricultural equipment			2 – 10 years
Computer equipment & telecommunications networks			3 years
Transport equipment			5 years
Laboratory equipment			3 – 20 years

The Company has property, plant, and equipment related to land, buildings and warehouses, leasehold improvements, laboratory, and construction in progress. The additions, disposals, depreciation, and net book values are as follows:


Cost	Land		Buildings & warehouse		Laboratory equipment		Agricultural equipment		Computer equipment		Furniture & appliances		Construction- in-progress		Other				Total






Balance at December 31, 2018	$	1,439	$	2,498	$	1,573	$	41	$	324	$	104	$	624	$	84			$	6,688
Additions from business acquisitions	—		—		—		—		—		—		—		9				9
Additions	3,259		2,815		1,763		1,863		875		588		6,826		687				18,675
Balance at December 31, 2019	$	4,698	$	5,313	$	3,336	$	1,904	$	1,199	$	692	$	7,450	$	780			$	25,372
Additions, net	367		3,151		2,606		—		336		127		(3,162)		240				3,665
Balance at December 31, 2020	$	5,065	$	8,464	$	5,942	$	1,904	$	1,535	$	819	$	4,288	$	1,020			$	29,037

Accumulated Depreciation	Land		Buildings & warehouse		Laboratory equipment		Agricultural equipment		Computer equipment		Furniture & appliances		Construction- in-progress		Other				Total


Balance at December 31, 2018	$	—	$	16	$	10	$	2	$	52	$	2	$	—	$	17			$	99
Depreciation (b)	—		111		301		170		180		100		—		37				898
Balance at December 31, 2019	$	—	$	127	$	311	$	172	$	232	$	102	$	—	$	54			$	997
Depreciation (a)	—		560		526		438		518		209		—		108				2,359
Balance at December 31, 2020	$	—	$	687	$	837	$	610	$	750	$	311	$	—	$	162			$	3,356

Net Book Value	Land		Buildings & warehouse		Laboratory equipment		Agricultural equipment		Computer equipment		Furniture & appliances		Construction- in-progress		Other				Total
Balance at December 31, 2018	1,439		2,482		1,563		39		272		102		624		67				6,588
Balance at December 31, 2019	4,698		5,186		3,025		1,732		967		590		7,450		726				24,374
Balance at December 31, 2020	$	5,065	$	7,777	$	5,105	$	1,294	$	785	$	508	$	4,288	$	858	$	—	$	25,680

(a) Includes approximately $1,050 and $685 of depreciation included in inventory and cost of goods sold, respectively.

(b) Includes approximately $100 and nil of depreciation included in inventory and cost of goods sold, respectively.

Construction in progress primarily relate to on-going construction of the Company's Colombian facilities.

Certain amounts may not add due to rounding.

Schedule of Error Corrections and Prior Period Adjustments

The table below sets forth the consolidated statement of financial position, including the balances originally reported as at December 31, 2020:


	As at December 31, 2020
	Reported		Restated
Warrant liabilities	$	—	$	19,061
Current liabilities	10,164		29,225
Total liabilities	51,567		70,628
Additional paid-in capital	194,105		164,264
Accumulated deficit	(79,794)		(69,014)
Total shareholders' equity	114,311		95,250

The table below sets forth the consolidated statements of operations, including the amounts originally reported and the restated amounts for the year ended December 31, 2020:


	Year Ended December 31, 2020
	Reported		Restated
Revenue	$	12,117	$	12,117
Loss from operations	(28,528)		(28,528)
Gain on remeasurement of warrant liabilities	—		10,780
Net loss	(36,675)		(25,895)
Net loss attributable to common shareholder - basic and diluted	(46,894)		(36,114)
Basic and diluted earnings per share	(4.34)		(3.34)

The table below sets forth the consolidated statement of cash flows, including the amounts originally reported and the restated amounts for the year ended December 31, 2020:


	Year Ended December 31, 2020
	Reported		Restated
Net loss	$	(36,675)	$	(25,895)
Gain on remeasurement of warrant liabilities	—		10,780
Net cash used in operating activities	(21,961)		(21,961)

The table below sets forth the consolidated statement of stockholders equity, including the amounts originally reported and the restated amounts for the year ended December 31, 2020:


	Year Ended December 31, 2020
	Reported		Restated
Business combination and PIPE financing	$	77,635	$	47,794
Total shareholders equity	114,311		95,250

Fair Value Measurement Inputs and Valuation Techniques

The Company determined the fair value of its private warrants using the Monte Carlo simulation model. The following assumptions were used to determine the fair value of the Private Warrants at December 18, 2020 and December 31, 2020:


	As at
	December 18, 2020			December 31, 2020
Risk-free interest rate	0.45%			0.43%
Expected volatility	50		%	60		%
Share price	$	13.00		$	8.90
Exercise price	$	11.50		$	11.50
Expiration date	December 18, 2025			December 18, 2025

•The risk-free interest rate assumptions are was based on U.S. dollar zero curve derived from swap rates at the valuation date, with a term to maturity matching the remaining term of warrants.

•The expected volatility assumptions are based on average of historical volatility based on comparable industry volatilities and implied volatility of public warrants.

Business Acquisition [Line Items]

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The intangible assets acquired based on the estimate of the fair values of the identifiable intangible assets were as follows:


	Amounts recognized at April 30, 2019		Weighted-Average Remaining Useful Life at April 30, 2019 (in years)
Finite-lived intangible assets:
Customer contracts	$	925	8.7
Customer relationships	1,000		5.6
Customer list	650		5.0
Brand	4,500		10.0
Product formulations	16		5.0
Total finite-lived intangible	$	7,091

Herbal Brands, Inc.

Business Acquisition [Line Items]

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The finite lived intangible assets acquired in the Herbal Brands acquisition and the related estimated useful lives at time of acquisition were as follows:


			Remaining Useful Life at the Acquisition Date (In Years)
Finite-lived intangible assets:
Customer contracts			8.7
Customer relationships			4 - 7
Customer list			5
Brand			10