Clever Leaves Holdings Inc.

With the EU GMP certification process for our post-harvest facility, and the facility will not be in full use until the licensing process is complete, we are incurring costs related to the heightened product testing and analysis process I mentioned earlier, as well as higher supplemental lighting costs relative to what we need in Colombia. While these factors across both of our production geographies have increased our costs in the short term, the preparation and optimization initiatives we're implementing today strengthen our position for current partnerships as well as for future market expansion opportunities. We expect that these harvest dynamics will pressure our unit economics in the short term, but that they will also allow us to optimize the revenues we can generate from our harvest in each of our production geographies over the longer term. We can leverage the existing efficiencies of our extraction operations in Colombia and the flower export learnings we've gleaned from Portugal to prepare for forthcoming opportunities, including Colombian flower exports, while closely monitoring respective partnerships and regulatory catalysts in our global target markets. In addition, we gained additional balance sheet flexibility after completing the full pay down of our debt obligations to Catalina LP and our remaining herbal brands debt. This improves our ability to support our growth initiatives and further optimize our operational foundation. Hank will share more about this shortly, but I'm proud of the necessary work we are doing to improve our organizational efficiency and effectiveness. As we enter the second half of 2022, I believe that the strategic steps and investments we are deploying today will benefit the business on our path towards becoming a supplier of choice within the global cannabis market. Now, I'd like to turn the call over to our CFO, Hank Haig, who will discuss our second quarter financial performance in greater detail.

Hank? Thank you, Andres. Our revenue in the second quarter of 2022 increased 27% to 4.7 million, compared to 3.7 million in the year-ago period. This increase was driven by higher sales in both our cannabinoid and non-cannabinoid segments, which grew 124% and 9% year-over-year, respectively. our cannabinoid revenue growth reflects continued strong performance across our target markets, particularly Australia, Brazil, Germany, and Israel. As our existing commercial agreements further activate and ramp, we will continue our momentum by seeking additional opportunities to deepen and expand our global partner base. Our all-in costs per gram of dry flour in the second quarter of 2022 was $2.26 per gram, compared to 22 cents per gram in the year-ago period. As Andres just mentioned, the increase on a per gram basis was driven by our significantly reduced harvest of approximately 90%. In Colombia, the harvest in the quarter was reduced to zero kilograms. while the harvest in Portugal increased 14% from the year-ago period. During the quarter, we were able to significantly reduce the cost to produce in Colombia due to the reduced harvest, but were offset by increased costs in Portugal as the agricultural operation ramps at the new post-harvest facility awaits its final GMP certification expected later this year. During the quarter, the Colombian operation continued its extraction operations to consume previously harvested dry flour in the manufacturing of GMP extracts and isolates. Over the coming quarters, we expect our total all-in cost per gram to remain elevated through a combination of these dynamics. I'd like to emphasize that these are all near-term unit economic considerations, as we right-size our harvest and pivot to harvesting flour in Columbia, compared to previously harvesting solely for extracts. In Columbia, we expect to keep our harvest output reduced as we go through the gradual process of right-sizing our inventory levels and optimizing our production operations for smokable dry flour export. We believe our costs will moderate to more advantageous levels as we ramp dry flower production to meet partner demand and further optimize the production process. From an extract perspective, we expect our costs to remain at similar or lower levels to what we achieved historically, but we expect flower products to comprise a greater share of our overall market portfolio over the long term. In Portugal, we expect our costs to remain higher as we drive towards greater capacity utilization, but expect unit costs to improve over time as we process additional harvest, finalize our cultivation ramp, and bring our post-harvest facility fully online once we complete the EU GMP licensing process, which we expect to do by the end of this year. Our gross profit was $1.3 million, which included a $1.3 million inventory provision, compared to $1.8 million, which included a $0.6 million inventory provision in the year-ago period. As a reminder, we are now reporting an adjusted gross profit figure to adjust for our inventory provision that was previously classified in SG&A and is now classified within cost of goods sold. That said, our adjusted gross profit, which excludes the inventory provision, in the second quarter of 2022 increased 8% to $2.6 million compared to $2.4 million in the year-ago period. This reflects an adjusted gross margin of 55.5% compared to 65.4% in the year-ago period. The year-over-year gross profit growth on an adjusted basis was driven by our top-line revenue growth during the quarter, partially offset by the higher inventory provision charge we recorded for the quarter. This inventory charge negatively impacted our gross margins for the quarter, and it was primarily driven by inventory obsolescence in Portugal through a combination of product expiration timing and our continued work to refine our flower strains to strict specifications required by our target markets. In our nutraceutical business, we are also still impacted by wage pressure, rising transportation costs, and the availability of both labor and materials. We continue to believe that these factors will serve as headwinds for our margin performance, and we are closely monitoring the impacts of these effects on our business, and on broader labor and supply chain conditions. Operating expenses in the second quarter of 2022 decreased to $9.5 million compared to $11.4 million in the year-ago period. The decrease was driven by a lower level of general and administrative expenses during the quarter, including lower share-based compensation expense. As Andres mentioned at the start of the call, we completed several restructuring initiatives to align our expense base more closely with our current revenue profile, including a global workforce reduction. While these measures like this are never desirable, we value each one of our dedicated team members. These actions are necessary to achieving the operational leverage we previously expected in our business. We expect the reduction to generate cash savings of 2 million this year and 4 million in the years to come. Net loss in the second quarter of 2022 improved significantly to 1 million compared to 9 million in the year-ago period. The decrease was primarily driven by a $6.9 million gain on investments following our sale of a portion of our minority stake in CanSativa, as well as a $2.2 million decrease in stock-based compensation. The gain on investments related to the CanSativa sale comprised a $2 million realized gain on the sale and a $4.9 million unrealized gain due to the remeasurement of the CanSativa shares retained interest. Adjusted EBITDA in the second quarter of 2022 was negative 6.3 million compared to negative 5.7 million in the year-ago period. The decrease was mainly due to increased cost of sales, including increased inventory provision and additional sales and marketing expenses. At June 30, 2022, our cash balance was 19.5 million, compared to $37.7 million at December 31, 2021. The decrease was primarily attributable to operating losses and paying down our two largest pieces of debt, offset by net proceeds raised from our at-the-market stock offering, which will significantly enhance our balance sheet for Q3 and beyond. In April, we repaid the remaining approximately $13.2 million balance of the aggregate amount outstanding under our secured convertible note with Catalina LP. This repayment satisfied all of our outstanding debt and obligations under the note purchase agreement and convertible note. In May, we also fully repaid our outstanding debt and obligations under our loan and security agreement between Herbal Brands and Rockcliffe's capital of approximately $5.6 million. These repayments represented our outstanding debt related to our 2019 acquisition of Herbal Brands. Through paying off our Catalina and Herbal Brands debt, we have significantly improved our leverage and balance sheet flexibility as we enter the second half of 2022. These actions represent significant progress in our efforts to optimize our balance sheet and drive greater cash efficiency. Throughout 2022, we will continue working to improve our liquidity position through reducing our expenses and investment in working capital. During the second quarter of 2022, there was no sales activity resulting from the at-the-market common stock offering program, and $26.6 million remained available at the end of the quarter. Lastly, turning to our financial outlook, we continue to reiterate our full-year 2022 financial guidance, in which we expect our 2022 revenue to range between $20 and $25 million, with an adjusted gross margin between 50 and 55 percent. As a reminder, our top-line expectations reflect an expected year-over-year increase in our cannabinoid revenues as we activate additional commercial opportunities in our core markets. We also anticipate our full-year adjusted EBITDA to be within the range of negative 23 million, negative 20 million, with maintenance-level capital expenditures of between approximately 2 million to 3 million. We have made progress advancing our strategic objectives throughout the first half of 2022, and we believe our focus on restructuring our costs and optimizing our cash efficiency has positioned us to continue to strengthen our foundation for long-term growth and profitability. This concludes my prepared remarks, and I'll now turn the call back over to Andres to review some of our more recent operational highlights and market opportunities in greater depth. Andres?

Thank you, Hank.