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

Quarterly report pursuant to Section 13 or 15(d)

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

3 Months Ended

Mar. 31, 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 wind-down of the entire Portuguese operations, including flower cultivation, post-harvest processes, and manufacturing activities, is expected to be completed by the end of the second quarter of 2023. Additionally, the Company has initiated the sale process of these assets with the goal of concluding the sale during the fiscal year ending December 31, 2023.

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 current period ended March 31, 2023, and the prior period ended March 31, 2022:


	Three Months Ended March 31,
	2023		2022
Revenue, net	$	337	$	183



Cost of sales	—		(738)
Gross profit	337		(555)
Expenses
General and administrative	282		1,263


Restructuring expenses	—		165


Depreciation and amortization	—		190
Total expenses	282		1,618

Income (loss) from operations	55		(2,173)








Other (income) expense, net	(15)		142

Net income (loss)	$	70	$	(2,315)