Mississauga, Ontario-based marijuana company Green Organic Dutchman’s net loss ballooned to 145 million Canadian dollars ($105 million) for the final three months of 2019 on impairment charges of CA$127.7 million.
That is up substantially from the previous quarter’s CA$20 million loss.
Green Organic Dutchman (TGOD) reported sales in Canada of only CA$690,000 in the quarter ending Dec. 31, 2019, while hemp-derived sales in Europe reached CA$2.56 million.
TGOD’s “available funds are expected to fund operations until the end of April 2020, at which time the Company will require additional capital,” it said in a regulatory filing this week.
Working capital had fallen to CA$15 million as of Dec. 31, 2019. A year earlier, its cash and cash equivalents were CA$213 million.
A conference call with analysts turned testy Wednesday morning, with Chief Executive Officer Brian Athaide forced to defend his continued leadership of the company amid the mounting losses.
Athaide said the company aims to be operating cash flow positive “later this year.”
In lieu of substantial revenue, the company said it has financed operations to date through the issuance of common shares, warrants and loans.
“If adequate funds are not available, the company may be required to delay or reduce the scope of any or all of its projects,” TGOD warned in the filing this week.
“These conditions indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern.”
The same warning appeared in a filing last year.
In the call, Athaide said the company continues to work towards achieving European Union Good Manufacturing Process certification with the aim of exporting later this year.
However, the CEO said regulatory developments were occurring slower than the company expected.
Athaide said TGOD has taken steps to conserve cash, including:
- Cutting non-production employees by 20%.
- Delaying and scaling back international projects.
General and administrative expenses rose to CA$44.2 million in the quarter ending Dec. 31 from CA$30.7 million in the previous quarter.
In October, TGOD followed the lead of other cannabis companies by significantly reducing its buildout plan to save money.
Its cannabis production target was lowered by 85% for 2020.
In December, Green Organic Dutchman secured a credit facility of up to CA$42.7 million.
Green Organic Dutchman’s shares, traded as TGOD on the Toronto Stock Exchange, have fallen about 85% in the past year.
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Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at [email protected].