After the market closed the day before the Thanksgiving holiday, The Green Organic Dutchman (CSE: TGOD) (US-OTC: TGODF)delivered its unaudited interim financial results for the third quarter ending September 30, 2021, with revenue rising 160% to C$8.6 million from last year’s C$3.3 million. Revenue only increased by 1% sequentially from the second quarter. TGOD also reported a net loss of C$13.9 million for the quarter versus C$75 million for the same period during the prior year. This also represents an improvement of C$18 million of losses from continuing operations since the second quarter where the company recorded a loss from continuing operations of C$32 million.
“We continue to execute on our plan and this management team is working hard to bring the company to profitability with many strategic initiatives”, commented Sean Bovingdon, CEO and interim CFO of TGOD. “TGOD continued at its prior quarter pace as stores worked through inventory loaded in Q2 and new retail distribution points continue to be established. Most notably, the Company launched its Sativa products in Ontario in October 2021 to add one of its top-selling products to the country’s largest retail distribution network, and strategically partnering with Acosta’s direct sales force provides the Company with the opportunity to double our existing distribution footprint quicker than before. 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,” added Bovingdon.
TGOD said it expects to close the sale of HemPoland within the coming months, bringing in expected net proceeds of C$8.3 million (the expected gross proceeds are C$14.54 million, before repaying an approximate C$5.54 million loan between the parent company and the subsidiary and expected transaction costs). Once that happens, TGOD said it plans to repay $4 million of the term portion of the Revolver Loan. The company also said that the remaining proceeds of the sale would provide significant cash and working capital to fund the continued growth and operations of the Canadian business.
Following the close of the quarter, TGOD acquired Galaxie for approximately $21 million. The company said that Galaxie is focused on product innovation, branding, and manufacturing 2.0 products. Galaxie creates and produces a range of products including premium cannabis edibles, infused pre-rolls, flavored and full melt vapes, oils, and solventless products. It also provides manufacturing and product development services to partners across Canada.
“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. Looking to 2022, we expect that key product launches for both TGOD and Galaxie will be key catalysts to grow revenues. Each strategic initiative successfully achieved allows the Company to differentiate itself and we are eager to grow our market share,” said Angus Footman, Chairman of the TGOD Board of Directors.