Green Organic Dutchman posts 12% increase in Q1 revenue

The net revenues of CA $10.58 million and $8.25 million were 96% higher than Q 1 2021, and a 12% rise from Q 4 2021, according to the financial results for the quarter ended March 31, 2022 by the Green Organic Dutchman Holdings Ltd.

The quarter-over-quarter increase in revenue is in line with the company's forecast and can be attributed to the launch of premium flowers Cherry Mints Maple Kush in pre-rolls and Highly Dutch Organic flower gaining traction in 2022. Net revenues are higher due to the sales mix of products moving towards premium flower, as well as an improved gross margin before changes in fair value to 35% from 32% in Q 4, 2021. The company believes gross margin and net revenue in Canada will continue to increase as it sells more premium flower, which should result in breakeven adjusted earnings before interest, taxes, depreciation, and amortization.

G&A's general and administrative expenses decreased to CA $3.92 million for the three months ended March 31, 2022, a 14% decline from CA $4.57 million for Q 4 2021, which was a 14% decrease in comparison to CA $4.57 million for the three months ended March 31, 2022.

The company's revenue and continuing cost cutting initiatives as well as a sales mix with premium flower accounting for 27% of overall sales compared to 19% in the previous quarter, resulted in a 57% increase in EBITDA loss for Q 1 of 2022, a 57% improvement over CA $2.93 million compared to Q 1st of 2021, which was a 57% increase in revenue and continued cost cutting initiatives.

As of March 31, 2022, the company had positive working capital of CA $19.01 million, including non-cash contingent consideration liability of CA $4.78 million. We continued our momentum from Q 4 2021 with strong Q 1 2022 results, including another record month in March. Sean Bovingdon, CEO of TGOD, stated that the results can be attributed to the launch of new products and our existing products.

The company had agreed with its Canadian lender to give the revolver loan to:

Increase the overall loan limit by CA $5 million to CA $30 million;

Allow certain eligible inventory to be included as collateral and allow certain eligible inventory to be included as collateral.

Relax certain non-financial covenants, subject to the satisfaction of various conditions set out therein. The company issued 500,000 common shares of the company to the lender in exchange for a price of $0.10 per share. The loan was the same as for all other terms under the revolver loan.

Since October 2021, the company has been engaged with advisors for the sale of company's entity in Poland, HemPoland S.p. The o. was deemed non-core to future operations and company strategy. Following Q 1st, the company received a non-binding competitive offer. The company anticipates that HemPoland will be sold within the next few months.

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