Despite a steep fall in revenue, Canadian producer The Green Organic Dutchman Holdings Ltd. (CSE: TGOD) (US-OTC: TGODF) says better fortunes are on the way thanks to its recent Galaxie Brands acquisition, future product releases and its marketing partnership with Acosta Canada.
On Thursday, the company released its financial results for the third quarter ended Sept. 30. It reported $7.3 million in net revenue, falling 23 per cent from $9.5 million last quarter. The firm didn’t provide an explanation for the drop in earnings.
Gross profit totalled $2.5 million, down 22 per cent from $3.2 million.
Comprehensive loss was $14 million, a 57-per-cent decrease from $32.5 million.
“TGOD continued at its prior quarter pace as stores worked through inventory loaded in Q2 and new retail distribution points continue to be established,” CEO Sean Bovingdon said in a statement.
Total cash and cash equivalents were $3.9 million, 53-per-cent lower than $8.3 million at the end of the last quarter.
The company said it didn’t have enough cash to fund its planned operations, and needs to generate more money from its operating activities and other funding to continue operations.
“Along with the continued support of our lender, selling HemPoland is expected to provide the short-term liquidity to bridge the company to positive operating cash flow in early 2022,” Bovington said.
TGOD says it expects to sell its hemp subsidiary HemPoland in the coming months to generate around $8.3 million in funds.
The company also says extra revenue will be coming in from new product launches related to its acquisition of Galaxie Brands
Read more: TGOD set to buy Galaxie Brands for $22M
Read more: TGOD voluntarily delists from TSX to enter US market
“Integrating Galaxie and TGOD will allow for significant efficiencies in the supply chain along with additional sales licence penetration in markets that are complementary to TGOD,” Bovingdon explained.
In August, TGOD completed its first international shipment of cannabis in South Africa, which was said to be the first distributed in the country at a commercial scale.
In September, the firm moved its shares from the Toronto Stock Exchange to the Canadian Securities Exchange, in order to invest in the U.S. market once a regulatory framework exists.
In November, TGOD made a deal to acquire Galaxie Brands for an initial $21 million in stock, while also assuming $1.3 million in Galaxie shareholder loans.
Company stock dropped by over 12 per cent Thursday to $0.14 on the Canadian Securities Exchange.
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