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Clever Leaves Holdings Inc. (Nasdaq: CLVR) stock price plummeted by over 60% in pre-market trading after the firm announced Friday that it will voluntarily delist from the Nasdaq exchange and deregister its securities.

The company, based in Tocancipá, Colombia, plans to file a Form 25 with the Securities and Exchange Commission by May 6 to trigger the delisting and deregistration. The last day of trading for Clever Leaves’ securities on Nasdaq is expected to be around May 16.

Following the delisting, the firm intends to file a Form 15 with the SEC to suspend its reporting obligations. That would nix its obligation to file certain reports and forms, such as a 10-Ks or 8-Ks.

The board’s decision comes after an evaluation of internal and external options, considering factors such as the its likely future non-compliance with Nasdaq’s continued listing terms. That also includes the high costs associated with maintaining compliance with public exchange disclosure and reporting requirements, “which have resulted and would continue to result in significant operating expense,” the company said in a news release.

Clever Leaves’ decision to voluntarily delist and deregister its securities is not uncommon among smaller public companies looking to reduce costs and simplify their operations. However, it remains to be seen how the move will impact its ability to attract investors and maintain its market position in the long term.

In a way, the firm can be more flexible in terms of strategic decision-making, with less pressure to meet short-term expectations from investors. But existing shareholders may also find it more difficult to sell their shares since there will no longer be a public market for the company’s stock.

Earlier this month, Clever Leaves reported mixed financial results for the fourth quarter and full year 2023. The company saw modest revenue growth, with a 5% rise in the fourth quarter and a 6% increase for the full year, primarily driven by its cannabinoid segment. However, non-cannabinoid revenues declined slightly.

The firm significantly reduced its net loss in both the fourth quarter and the full year versus 2022. The company said it was focused on optimizing operations, having recently sold its non-cannabinoid segment, Herbal Brands, Inc., for $8.02 million in March, to focus solely on its core cannabinoid business.

Several cannabis companies have delisted from stock exchanges in recent years, mainly due to the industry’s inability to access regular banking services in addition to wider headwinds and rightsizing. Clever Leaves went public on Dec. 18, 2020, through a special purpose acquisition company merger with Schultze Special Purpose Acquisition Corp.

The post Clever Leaves plunges 60%, plans Nasdaq exit appeared first on Green Market Report.

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Adam Jackson, KahliBuds, 420GrowLife