Canadian firm TGOD reports loss, receives offer for Polish hemp subsidiary

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Canadian cannabis producer The Green Organic Dutchman lost $6.8 million Canadian dollars ($5.2 million) on record quarterly sales in the second quarter of 2022.

The company said in a Tuesday news release that net revenue of CA$11.63 million for the three months ended June 30 was 43% higher than the same period one year earlier. It’s also a 10% increase from the previous quarter.

However, the company – also known by its ticker symbol on the Canadian Securities Exchange, TGOD – said in a financial filing that its total cash position of CA$4.67 million was “insufficient … to fund its planned operations.”

“The company will need to obtain further funding in the form of asset sales, debt, equity or a combination thereof to continue operations for the next twelve months,” according to the filing.

TGOD also said there was “a material uncertainty that casts significant doubt about the company’s ability to continue as a going concern,” citing targets related to its revolving credit facility.

The Mississauga, Ontario-based company said it received a nonbinding offer for its once-prized European subsidiary, HemPoland, and expects a sale to be concluded by the end of September.

The offer is significantly less than what the company paid for the Polish hemp producer amid the cannabis stock hysteria of 2018.

TGOD said the offer includes a nonrefundable deposit of CA$150,000, plus a further CA$1.5 million in cash on closing.

Additionally, a TGOD loan payable to HemPoland worth CA$5.6 million would be forgiven.

In 2018, TGOD agreed to buy the promising Elblag, Poland-based business for CA$20.4 million in cash and stock.

At the time, the Canadian company said it planned to invest another CA$13.5 million in the business to fund product development and European expansion.

TGOD also agreed to pay performance incentives worth CA$15.8 million if HemPoland met certain profitability requirements in 2021.

HemPoland is not believed to have met those conditions.

TGOD said its accumulated losses to date total almost CA$500 million.