The Green Organic Dutchman Holdings Ltd.  (OTC: TGODF) reports its results after the market close on Tuesday for the fourth quarter and fiscal year ended December 31, 2020. In the fourth-quarter, TGOD said its revenues increased 236% to $10.92 million versus $3.25 million in Q4-2019. This was also a 91% increase over the third-quarter revenue of $5.71 million. The Green Organic Dutchman fourth-quarter net loss improved to $23.68 million versus $144.75 million for the same period in 2019. The company attributed it to a loss from operations and a write-down of $8.65 million in goodwill related to HemPoland.

Annual revenue for fiscal 2020 was $24.51 million versus $11.16 million for 2019. The net loss for the year was $183 million. The company said that the loss was due to a non-cash impairment charge of $120 million on the Canadian cash-generating unit. “The non-cash impairment charges recognized during the period are primarily attributable to the changes in the timing of accessing market demand, as a result of various factors including regulatory changes, production and supply chain impediments, COVID-19 impacts on retail store openings, and, sales price compression across the industry, resulting in a slower revenue ramp-up and growth than originally forecasted by management.”

Lowered Sales Forecast Outlined

In February, TGOD also lowered its estimates for revenues in 2021. The revised Canadian cash flow forecast, from November 1, 2020 to October 31, 2021, assumed that it would achieve $40 million in net sales over the 12-month period versus the $61.5 million previously forecast in the Base Shelf Prospectus. The reasons for the decline were listed below:

• The company’s forecast assumes between 5% and20% of price compression into 2021 across its various product lines.
• Pandemic restrictions reduced order levels for the first quarter of 2021. The company believes these measures will hamper the rate of revenue growth in Canada that was expected in the first half of 2021 and impact the timing of market penetration for its new sativa strains and some cannabis 2.0 products.
• the sales volume forecast consists primarily of product mix premium flower, mainstream Highly Dutch flower, and 2.0 products expected to be sold and includes hash sales, which mix has shifted towards proportionately more mainstream Highly Dutch products that have a lower margin.
• The company’s latest forecast further reflects the shift in its medical business from sales to patients directly to medical wholesaling, such as the company’s distribution agreement with Medical Cannabis by Shoppers Drug Mart. Medical wholesale generates narrower gross margins compared to direct patient sales.

Permanent CEO Named

The company appointed Sean Bovingdon as Chief Executive Officer (CEO), and member of the board, effective immediately. Mr. Bovingdon had previously been appointed as Interim CEO in November 2020 while continuing to serve as CFO. He will continue as interim CFO while the company undertakes a search for a permanent Chief Financial Officer.