2020 Q4 Results After 3 quarters of improving financial performance over the same quarter in 2019, Q4 2020 failed to keep up the trend. In spite of a significant increase in tonnes sold in the quarter (a 76% increase - 55,585 tonnes versus 32,221 tonnes in Q3 2019) , as well as in revenues realized (a 48% increase - $2,209,000 versus $1,491,000 in Q3 2019), the Company reported a net loss of $192,000 vesrsus a net loss of only $11,000 in 2019.
We understand that the Company has not yet been able to reduce the extreme volatility in the quarterly sales volumes, and that Q4 is the second lowest volume after Q1. However it is still over half the volume of Q3 and 5 times the volume in Q1. In addition, the 2020 Q4 generated a gross profit of $1,297,000, a significant starting point from which to cover "fixed" quarterly costs..
I am disappointed Management was unable to turn in a quarterly profit in Q4 2020 given these improved top line figures. By carefully controlling discretionary selling, delivery, general and administrative costs during the quarter, I believe this was easily within reach. Perhaps the recognition of part of Mr. Veloso's 2020 personal bonus of $551,000 (see page 60 of the 2020 Financial Statements) in the 4th Quarter (1/4 would be $137,750) contributed to the loss?
And do we know the basis of awarding Mr. Veloso a personal bonus of $551,000 (131.2% of his base salary of $420,000)? It certainly was not for producing a bottom line profit in Q4 2020. And what was behind the issuing of 750,000 ten year $1.22 stock options to Mr. Veloso in March 2021? Was this a reward for past performance, or was it an incentive to produce improved performance over the next ten years. I would normally put these questions to the Chairman of our Board of Directors, but as I found out today Verde Agritech has never had a Board Chair until Mr. Veloso personally assumed this critical position. So I am a bit hesitant about approaching the Board Chair to seek an explanationas to how the Board arrived at the compansation arrangements for the CEO when he and the CEO are one and the same.