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

Quarterly report pursuant to Section 13 or 15(d)

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

6 Months Ended

Jun. 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 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 three and six months ended June 30, 2023, and the three and six months ended June 30, 2022:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue, net	$	215	$	556	$	552	740



Cost of sales	$	—	(1,734)		$	—	(2,472)
Gross profit (loss)	$	215	(1,178)		552		(1,733)
Expenses
General and administrative	$	564	1,589		$	846	2,852
Restructuring expenses	$	—	(135)		$	—	30
Depreciation and amortization	$	—	220		$	—	410
Total expenses	$	564	1,673		846		3,291

Loss from operations	$	(350)	(2,851)		(294)		(5,024)

Interest (income) expense and amortization of debt issuance cost	$	9	8		$	20	17
Loss on investments	$	(47)	—		$	(47)
Foreign exchange (gain) loss	$	—	43		$	(4)	177
Other expense, net	$	21	—		$	1	—

Net loss	$	(333)	$	(2,902)	$	(264)	$	(5,218)