Clever Leaves Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

As part of the restructuring activities, the Company conducted a comprehensive review of its production capacity for cannabis extracts. This evaluation led to the decision to scale back on certain extraction capacity and related assets, resulting in asset write-off charges. The Company also approved the shutdown of its cultivation activities in Portugal to preserve cash and improve operating margins. The Company has completed the cessation of its Portuguese flower cultivation, post-harvest processes, and manufacturing activities. Subsequently, the post harvest facility has been sold and preparations are currently underway for the sale of the farm land with the objective of concluding the sale by March 31, 2024.

The company determined that shutdown of Portugal operations met the criteria to be classified as a discontinued operation, and, as a result, its historical financial results are reflected in the Company's financial statements as a discontinued operation and, assets and liabilities were classified as assets and liabilities held for sale.

To provide transparency and facilitate comparison, the table below presents the major line items constituting the pretax profit or loss of the discontinued operations for the three and nine months ended September 30, 2023, and the three and nine months ended September 30, 2022:


		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Revenue, net		$	—	$	438	$	551	$	1,178



Cost of sales		—		(1,456)		—		(3,929)
Gross profit (loss)		—		(1,018)		551		(2,751)
Expenses
General and administrative		584		645		1,430		3,496
Restructuring expenses		—				—		30
Depreciation and amortization		—		203		—		613
Total expenses		584		848		1,430		4,139

Loss from operations		(584)		(1,866)		(879)		(6,890)

Interest (income) expense		14		7		33		24
Gain on sale of assets	—	(2,778)		—		(2,825)
Foreign exchange loss		48		99		44		275
Other income, net		(1)		—		—		—

Net gain (loss)		$	2,133	$	(1,972)	$	1,869	$	(7,189)