Q2 2022 Wholesale Revenue Increased 117% Compared
to Q2 2021
Q2 2022 General and Administrative Expense
Decreased 57% Compared to Q2 2021
CEO Parimal Rana Provides Update on VERY GOOD's
Refocused Strategy
VANCOUVER, BC , Aug. 15,
2022 /PRNewswire/ - The Very Good Food Company Inc.
(NASDAQ: VGFC) (TSXV: VERY) (FSE: OSI) ("VERY GOOD" or the
"Company"), a leading plant-based food technology
company, today reported its financial results for the second
quarter ended June 30, 2022.
Financial Highlights
- Revenue decreased $1,279,215 or 46% to $1,501,446 in Q2 2022, compared to $2,780,681 in the same period in 2021. The
decrease in revenue was driven by a decrease of $1,825,436 in eCommerce sales, offset by an
increase of $523,223 in wholesale
revenue.
- Wholesale revenue increased 117% to
$987,278 in Q2 2022 as compared
to the same quarter last year due to an increase in the number of
stores and distribution points as well as increased unit velocities
on core and new items.
- eCommerce revenue decreased 83% to $380,967 in Q2 2022 as compared to the same
period last year due to the Company's strategic decision to limit
its eCommerce sales due to high digital marketing costs to acquire
new customers, lowered production and headcount at some locations
to manage inventory levels. VERY GOOD is focusing on its wholesale
and foodservice channels and is evaluating potential exit plans for
its eCommerce business.
- General and administrative expense ("G&A
expense") decreased $3,899,256 or 57% to $2,935,624 in Q2 2022 compared to $6,834,880 in Q2 2021. Excluding share-based
compensation and depreciation expense, adjusted general and
administrative expense decreased $1,563,585 or 28% to $4,038,034 in Q2 2022 compared to $5,601,619 in Q1 2022. The decrease in adjusted
general and administrative expense was primarily driven by a
decrease in salaries and wages.
- Adjusted general and administrative expense ("Adjusted
G&A Expense")1 increased $1,829,479 or 183% to $4,038,034 in Q2 2022, compared to $2,208,555 in Q2 2021. The increase in adjusted
general and administrative expense was primarily driven by
increased legal and professional fees of $1,036,165, increased insurance fees of
$659,708 due to increases in director
and officer insurance as a result of the Company's Nasdaq listing,
increased wages and benefits of $616,539 due to higher head count and offset by a
decrease in recruitment fees of $139,543.
- Net loss decreased 46% to $(6,699,130) in Q2
2022 compared to $(12,500,733) in Q2
2021.
- Adjusted EBITDA2 was a loss of
$(7,028,270) in Q2 2022 compared to
$(5,673,109) in Q2 2021, and
$(9,991,892) in Q1 2022.
__________________________________
1 Adjusted
general and administrative expense is a Non-IFRS measure calculated
as total general and administrative expense less share-based
compensation and depreciation.
|
2 Management
defines adjusted EBITDA as net loss before finance expense, tax,
depreciation and amortization, share-based compensation, and other
non-cash items, including impairment of goodwill, loss on disposal
of equipment, loss on termination of leases, and shares, units and
warrants issued for services.
|
Cash and Liquidity Update
As of June 30, 2022, the Company
had cash and cash equivalents of $6,156,414, a reduction of $15,819,239 from $21,975,653 as of December
31, 2021. This decrease is primarily related to the
Company's greater than expected cash burn during the quarter. As of
the date of this MD&A, the Company's cash balance is
approximately $3.2 million to settle
current accounts payable and accrued liabilities of approximately
$4.3 million. The Company will need
to seek additional financing by the end of September to fulfil its
outstanding obligations and fund ongoing operations and will be
required to obtain subsequent financings in future periods. To
address its lack of necessary liquidity, the Company has reduced
its cash outflow related to paying trade payables while it
evaluates its financing options. The Company is also continually
evaluating other alternatives of generating cash in the short term
such as disposing of non-core equipment and certain raw material
inventory to extend the current cash runway. There can be no
assurance that disposing of non-core equipment and certain raw
material inventory will be successful. While there is no assurance
on the availability of the Company's future financings, on
acceptable terms, or at all, the Company currently believes that it
will be able to raise capital through financing in the near term to
fund operations as it continues to implement its new refocused
strategy.
Q2 2022 Operational and Corporate Strategy Update
As of August 15, 2022, the Company
has ceased regular operations at the Victoria Facility, Fairview
Facility, and Patterson Facility and consolidated operations into
the Rupert Facility. The Company closed the Victoria Flagship Store
in June 2022 and has terminated the
lease for the planned location of the Mount Pleasant Flagship
Store. The Company made these decisions in an effort to improve
production efficiencies and reduce overhead.
During the six-month period ended June
30, 2022, VERY GOOD made the strategic shift to focus on
sustainable growth and a path to profitability as opposed to solely
focusing on top line growth. As part of this shift, VERY GOOD
decided to limit its eCommerce sales due to high digital marketing
costs to acquire new customers, lowered production, and headcount
at some locations to manage inventory levels, implemented
initiatives such as pausing non-critical capital expenditures and
lowering general and administrative expenses.
VERY GOOD has reduced its work force to core management teams
with plant staff and overall head count has decreased to
approximately 100 from 260 during first half of 2022 as a result of
both terminations and employee resignations. The Company has
granted stock options as a retention tool to help reduce employee
turnover. The Company will continue to review its departments to
find efficiencies and will manage inventory levels to only purchase
essential raw materials.
VERY GOOD intends to continue to focus on the wholesale and food
service channels, particularly in the
United States, which it views as critical to realizing its
vision to scale the Company.
On June 2, 2022, VERY GOOD closed
a private placement offering with an institutional investor for
gross proceeds of $8,184,762
(US$6,500,000) consisting of
13,100,000 common shares, 19,400,000 common share equivalents, and
32,500,000 share purchase warrants. In connection with the
offering, the Company incurred share issuance costs of $936,659.
On June 23, 2022, VERY GOOD
increased U.S. retail expansion via a new agreement with superstore
chain Meijer Inc. (Meijer). With 262 supercenters and grocery
stores throughout Michigan,
Illinois, Indiana, Ohio, and Wisconsin, Meijer's robust Midwest presence
represents significant progress towards VERY GOOD's objective to
extend its brand and offer products in every major city across
the United States.
On July 7, 2022, VERY GOOD
increased U.S. retail expansion via a new agreement with The Giant
Company ("Giant"). With Giant's presence throughout Pennsylvania, Maryland, Virginia, and West
Virginia as well as online shopping and delivery to
New Jersey, this retail
distribution significantly expands VERY GOOD'S product availability
on the U.S. Eastern Seaboard.
On July 27, 2022, VERY GOOD
announced further expansion into the Eastern U.S. retail
environment with Weis Markets, Inc. ("Weis"). Weis owns and
operates 196 supermarkets throughout Pennsylvania, Delaware, Maryland, New
York, New Jersey,
Virginia, and West Virginia and also offers online shopping
and delivery to Pennsylvania. This
additional retail distribution further extends VERY GOOD's product
availability in the United
States.
On August 15, 2022, VERY GOOD
announced that the Company was awarded the Food Network Supermarket
Award for our A Cut Above Pork in the "Most Noteworthy Vegan
Newcomers" category.
Management Changes
On July 4, 2022, VERY GOOD
announced that as part of its succession plan, Matthew Hall has stepped down as interim
Co-Chief Executive Officer and as a director of the Company but
will continue to support VERY GOOD in an advisory capacity.
Parimal Rana, a seasoned food
industry professional who had been serving as VERY GOOD's Vice
President of Operations, assumed the role of Chief Executive
Officer ("CEO") and joined VERY GOOD's board of directors
("Board").
On July 12, 2022, VERY GOOD
announced the appointment of a new Chief Financial Officer
("CFO"), Pratik Patel, CPA,
CGA. Pratik commenced employment as CFO of VERY GOOD on
July 25, 2022. He has over
fifteen years of experience as a senior accounting and finance
professional, with expertise in integration and external
report.
Effective August 19, 2022,
Kevin Callaghan, Vice President of
Sales – North America of VERY GOOD
will be resigning from his position. With its existing sales
team including Michael Hoeksema,
Director of Foodservice Sales, VERY GOOD believes it is still well
positioned to continue its planned market advancements in the
immediate term – with potential augmentations or additions to the
sales team as needed. VERY GOOD wishes Kevin the best in his future
endeavors.
Nasdaq Listing Notification
On January 11, 2022, VERY GOOD
received notification from the Listing Qualifications Department of
Nasdaq that, for the previous 30 consecutive business days, the bid
price of the Common Shares had closed below the minimum
US$1.00 per share requirement for
continued inclusion on the Nasdaq pursuant to Nasdaq Listing Rule
5550(a)(2) (the "Bid Price Rule"). On July
11, 2022, VERY GOOD was granted an additional 180-day period
from Nasdaq's Listing Qualification Department or until
January 9, 2023, to regain compliance
with the minimum US$1 bid price
requirement for continued listing on The Nasdaq Capital Market. The
Nasdaq notification has no immediate effect on the listing of the
Common Shares. VERY GOOD is also listed on the TSXV and the
notification does not affect the Company's compliance status with
such listing. Nasdaq informed VERY GOOD in the July 11 notification, that if compliance cannot
be demonstrated by January 9, 2023,
Nasdaq will provide written notification that VERY GOOD's
securities will be delisted – at which time, the Company may appeal
Staff's determination to a Hearings Panel (the "Panel").
Nasdaq's determination of VERY GOOD'S eligibility for an
additional 180 calendar day period during which the Company can
regain compliance, was based on VERY GOOD meeting the continued
listing requirement for market value of publicly held shares and
all other applicable requirements for initial listing on the
Capital Market with the exception of the bid price requirement, and
the Company's written notice of its intention to cure the
deficiency during the second compliance period by effecting a
reverse stock split, if necessary.
Refocused Strategy
The Company continues to implement its three-prong approach to
(1) Stabilize, (2) Right-Size, and (3) Optimize, first announced in
May 2022. The Board and its strategic
advisors are focused on the stabilization prong and the management
team, led by the CEO Parimal Rana,
are executing to Right-Size and Optimize. The Right-Sizing efforts
have mostly been completed with the closure of the restaurant
operations and consolidation of production facilities into the
Rupert Facility. With the re-focusing of sales away from eCommerce
and toward wholesale and food service the Company is also reviewing
strategic private label and co-manufacturing opportunities to fill
excess production capacity and increase revenue.
The Company's long-term strategy is anticipated to continue to
center around establishing and maintaining strong relationships
with its customers through differentiated products, categories and
channels that build our commitment to long-term profitable
growth
CEO Parimal Rana commented on
VERY GOOD's second quarter results and the current state of the
organization. "In Q2 2022 We made notable progress toward our
initiative to stabilize, right-size and optimize the business. We
recognize that the hard work is not over, and we are still
completely focused on forging a path toward profitability and
growth by leveraging our track record of innovation and our
clean, plant-based products that are well received by vegan as well
as flexitarian consumers. It's never easy to report a
sequentially down quarter, but the growth we are seeing in
wholesale revenue, as well as some of our more recent wins are
encouraging validation of our new strategic initiative to focus on
the wholesale and foodservice channels. We are positioning
ourselves to be on the leading edge of the plant-based-foods market
recovery and future growth opportunity."
The management's discussion and analysis for the period and the
accompanying financial statements and notes will be available under
the Company's profile on SEDAR at www.sedar.com and will be
furnished on a Report on Form 6-K on EDGAR at www.sec.gov.
Q2 2022 Conference Call Details
VERY GOOD will host a conference call on Tuesday, August 16, 2022, at 5:00 pm Eastern Time/ 2:00
pm Pacific Time to discuss its financial results and
business outlook.
Participant Dial-In Numbers:
Toll-Free: 1-877-425-9470
Toll / International: 1-201-389-0878
* Participants should request The Very Good Food Company Second
Quarter Earnings Call.
The call will be available via webcast on VERY GOOD's investor
page of the Company website at https://investor.theverygoodfood.co/
until September 16, 2022.
Financial Highlights
|
Three months
ended
June
30,
|
Three months
ended
March
31,
|
Three months
ended
June
30,
|
Six
months
ended
June
30,
|
Six
months
ended
June
30,
|
|
2022
|
2022
|
2021
|
2022
|
2021
|
Revenue by
channel
|
|
|
|
|
|
eCommerce
|
$
380,967
|
$
1,081,360
|
$
2,206,403
|
$
1,462,327
|
$
4,391,497
|
Wholesale
|
987,278
|
772,919
|
455,055
|
1,760,197
|
800,960
|
Butcher Shop,
Restaurant and Other
|
133,201
|
164,065
|
119,223
|
297,266
|
231,307
|
|
$
1,501,446
|
$
2,018,344
|
$
2,780,681
|
$
3,519,790
|
$
5,423,764
|
Net loss
|
$(6,699,130)
|
$(9,573,309)
|
$(12,500,733)
|
$(16,272,439)
|
$(27,529,309)
|
Adjusted EBITDA net
loss1
|
$(6,828,270)
|
$(9,991,892)
|
$(5,673,109)
|
$(16,820,162)
|
$(11,065,045)
|
Loss per share – basic
and diluted
|
$
(0.05)
|
$
(0.08)
|
$
(0.13)
|
$ (0.14)
|
$
(0.28)
|
Weighted average number
of shares outstanding –
basic and diluted
|
122,542,033
|
118,503,242
|
97,603,729
|
120,533,795
|
97,381,583
|
1See
"Non-IFRS Financial Measures" starting on page 15 for more
information on non-IFRS financial measures and reconciliations
thereof to the nearest comparable measures under IFRS.
|
Condensed Interim Consolidated Statements of Financial
Position
(Expressed in Canadian dollars,
unaudited)
As at
|
Notes
|
June 30,
2022
|
December 31,
2021
|
Assets
|
Current
assets
|
Cash and cash
equivalents
|
|
$ 6,156,414
|
$ 21,975,653
|
Accounts
receivable
|
4
|
1,013,985
|
2,101,842
|
Inventory
|
5
|
10,507,040
|
8,474,255
|
Prepaids and
deposits
|
6
|
4,758,834
|
8,640,286
|
Loans to related
party
|
12
|
–
|
410,268
|
Total current
assets
|
|
22,436,273
|
41,602,304
|
Right-of-use
assets
|
7
|
14,563,190
|
16,659,502
|
Property and
equipment
|
8
|
17,236,365
|
15,450,608
|
Prepaids and
deposits
|
6
|
564,345
|
707,110
|
Deferred financing
costs
|
11
|
2,433,263
|
3,924,743
|
Total assets
|
|
$
57,233,436
|
$ 78,344,267
|
Liabilities and
shareholders' equity
|
|
Current
liabilities
|
|
|
|
Accounts payable and
accrued liabilities
|
9
|
$ 5,503,691
|
$ 8,109,161
|
Deferred
revenue
|
|
10,684
|
32,137
|
Current portion of
lease liabilities
|
10
|
1,688,186
|
849,935
|
Current portion of
loans payable and other liabilities
|
11
|
6,270,459
|
1,947,642
|
Contingent
consideration
|
20
|
450,000
|
1,048,000
|
Derivative
liabilities
|
13
|
13,946,578
|
3,942,002
|
Total current
liabilities
|
|
27,869,598
|
15,928,877
|
Lease
liabilities
|
10
|
13,136,775
|
16,764,458
|
Loans payable and
other liabilities
|
11
|
98,709
|
5,474,605
|
Total
liabilities
|
|
41,105,082
|
38,167,940
|
|
Share
capital
|
14
|
85,024,964
|
84,751,366
|
Equity
reserves
|
|
13,846,091
|
26,719,047
|
Subscriptions received
and receivable
|
|
4,884,687
|
(3,750)
|
Accumulated other
comprehensive loss
|
|
(77,329)
|
(12,716)
|
Deficit
|
|
(87,550,059)
|
(71,277,620)
|
Total shareholders'
equity
|
|
16,128,354
|
40,176,327
|
Total liabilities and
shareholders' equity
|
|
$
57,233,436
|
$
78,344,267
|
Nature of operations
and going concern uncertainty (Note 1)
|
Commitments (Notes 10
and 23)
|
Events after the
reporting period (Note 25)
|
Condensed Interim Consolidated Statements of Net Loss and
Comprehensive Loss
(Expressed in Canadian dollars,
unaudited)
|
|
Three months
ended
|
Six months
ended
|
|
Notes
|
June 30,
2022
|
June 30,
2021
|
June 30,
2022
|
June 30,
2021
|
|
|
|
|
|
|
Revenue
|
|
$
1,501,446
|
$
2,780,681
|
$
3,519,790
|
$
5,423,764
|
Procurement
expense
|
7,8,21
|
(3,007,420)
|
(2,102,822)
|
(5,669,103)
|
(4,155,068)
|
Fulfilment
expense
|
7,8,21
|
(1,256,785)
|
(2,045,714)
|
(3,174,601)
|
(4,028,609)
|
General and
administrative expense
|
7,8,21
|
(2,935,624)
|
(6,834,880)
|
(7,780,315)
|
(16,409,437)
|
Marketing and investor
relations expense
|
21
|
(560,537)
|
(2,579,656)
|
(2,138,931)
|
(4,726,001)
|
Research and
development expense
|
8,21
|
(344,804)
|
(515,965)
|
(909,322)
|
(881,985)
|
Pre-production
expense
|
7,8,21
|
(106,400)
|
(656,288)
|
(350,850)
|
(1,541,823)
|
Operating
loss
|
|
(6,710,124)
|
(11,954,644)
|
(16,503,332)
|
(26,319,159)
|
Finance
expense
|
17
|
(1,237,418)
|
(405,947)
|
(2,526,282)
|
(762,977)
|
Other
expenses
|
18
|
(276,568)
|
(140,142)
|
(296,798)
|
(447,173)
|
Gain on debt
modification
|
11
|
16,783
|
–
|
16,783
|
–
|
Change in fair value of
derivative liabilities
|
13
|
1,508,197
|
–
|
3,037,190
|
–
|
Net loss
|
|
(6,699,130)
|
(12,500,733)
|
(16,272,439)
|
(27,529,309)
|
Other comprehensive
income
|
|
|
|
|
|
Foreign currency
translation (loss) gain
|
|
(111,135)
|
4,461
|
(64,613)
|
8,935
|
Comprehensive
loss
|
|
$
(6,810,265)
|
$
(12,496,272)
|
$(16,337,052)
|
$(27,520,374)
|
Loss per share – basic
and diluted
|
|
$
(0.05)
|
$
(0.13)
|
$ (0.14)
|
$ (0.28)
|
Weighted average
number of shares
outstanding – basic and diluted
|
|
122,542,033
|
97,603,729
|
120,533,795
|
97,381,583
|
Condensed Interim Consolidated Statements of Cash
Flows
(Expressed in Canadian dollars, unaudited)
Six months
ended
|
June 30,
2022
|
June 30,
2021
|
Net loss for the
period
|
$
(16,272,439)
|
$
(27,529,309)
|
Adjustments for
non-cash items:
|
|
|
Finance
expense
|
2,526,282
|
764,182
|
Change in fair
value of derivative liabilities
|
(3,037,190)
|
–
|
Depreciation
|
1,601,139
|
841,652
|
Loss on
termination of lease
|
151,491
|
(1,600)
|
Gain on debt
modification
|
(16,783)
|
–
|
Impairment of
right-of-use assets
|
3,103
|
–
|
Impairment of
property and equipment
|
122,459
|
–
|
Loss on
disposal of equipment
|
1,490
|
22,561
|
Share-based
compensation (recovery)
|
(2,099,714)
|
14,609,998
|
Shares, units
and warrants issued for services
|
–
|
227,471
|
Changes in non-cash
working capital items:
|
|
|
Accounts
receivable
|
1,104,631
|
(924,659)
|
Inventory
|
(1,865,955)
|
(2,055,329)
|
Prepaids and
deposits
|
2,645,433
|
(1,144,701)
|
Accounts
payable and accrued liabilities
|
(2,686,481)
|
1,194,146
|
Deferred
revenue
|
(21,453)
|
(56,893)
|
Net cash and
cash equivalents used in operating activities
|
(17,843,987)
|
(14,052,481)
|
Cash paid for
acquisitions
|
–
|
(1,250,000)
|
Cash acquired
from acquisitions
|
–
|
9,306
|
Purchase of
property and equipment
|
(2,641,780)
|
(3,599,115)
|
Security
deposits paid for property and equipment
|
(412,608)
|
(3,412,197)
|
Security
deposits refunded for property and equipment
|
655,008
|
–
|
Acquisition of
right-of-use assets
|
(36,074)
|
(29,408)
|
Payment of
contingent consideration
|
(598,000)
|
–
|
Repayment
received from loans to related parties
|
410,268
|
–
|
Net cash and cash
equivalents used in investing activities
|
(2,623,186)
|
(8,281,414)
|
Proceeds from
the exercise of warrants
|
–
|
2,207,082
|
Proceeds from
the exercise of stock options
|
182,456
|
55,875
|
Proceeds from
subscriptions received
|
–
|
28,999
|
Proceeds from
the issuance of common shares and common share
equivalents
|
8,184,762
|
–
|
Share issuance
costs
|
(936,659)
|
–
|
Proceeds from
loans payable
|
32,288
|
1,891,092
|
Repayments of
loans payable
|
(994,302)
|
(240,000)
|
Deferred
financing costs paid
|
–
|
(238,164)
|
Payments of
lease liabilities
|
(1,364,642)
|
(532,097)
|
Interest
paid
|
(242,356)
|
–
|
Lease settlement
paid
|
(168,677)
|
–
|
Net cash and cash
equivalents provided by financing activities
|
4,692,870
|
3,172,787
|
Effect of foreign
exchange rate changes on cash and cash equivalents
|
(44,936)
|
3,092
|
Decrease in cash and
cash equivalents
|
(15,819,239)
|
(19,158,016)
|
Cash and cash
equivalents, beginning of period
|
21,975,653
|
25,084,083
|
Cash and cash
equivalents, end of period
|
$
6,156,414
|
$
5,926,067
|
Cash
|
$
6,056,414
|
$
4,861,067
|
Redeemable
guaranteed investment certificate ("GIC")
|
–
|
1,000,000
|
Restricted
redeemable GIC
|
100,000
|
65,000
|
Total cash and cash
equivalents
|
$
6,156,414
|
$
5,926,067
|
Supplemental cash flow
disclosures (Note 19)
|
The accompanying notes
are an integral part of these condensed interim consolidated
financial statements
|
NON-IFRS FINANCIAL MEASURES
Non-IFRS financial measures are metrics used by management that
do not have any standardized meaning prescribed by IFRS and may not
be comparable to similar measures presented by other companies.
Adjusted EBITDA
Management defines adjusted EBITDA as net loss before finance
expense, tax, depreciation and amortization, share-based
compensation and other non-cash items, including loss on disposal
of equipment, gain on termination of leases, and shares, units and
warrants issued for services. Management believes adjusted EBITDA
is a useful financial metric to assess its operating performance
because it adjusts for items that either do not relate to the
Company's underlying business performance or that are items that
are not reasonably likely to recur.
|
Three months
ended
June
30,
|
Three months
ended
March
31,
|
Three months
ended
June
30,
|
Six months
ended
June
30,
|
Six months
ended
June
30,
|
|
2022
|
2022
|
2021
|
2022
|
2021
|
Net loss as
reported
|
$(6,699,130)
|
$(9,573,309)
|
$(12,500,733)
|
$(16,272,439)
|
$(27,529,309)
|
Adjustments:
|
|
|
|
|
|
Change in fair value of
derivative liabilities
|
(1,508,197)
|
(1,528,993)
|
-
|
(3,037,190)
|
-
|
Depreciation
|
985,754
|
615,385
|
512,168
|
1,601,139
|
841,652
|
Finance
expense
|
1,237,418
|
1,288,864
|
402,432
|
2,526,282
|
764,182
|
Gain on debt
modification
|
(16,783)
|
-
|
-
|
(16,783)
|
-
|
Impairment of
right-of-use assets
|
3,103
|
-
|
-
|
3,103
|
-
|
Impairment of property
and equipment
|
122,459
|
-
|
-
|
122,459
|
-
|
Loss on termination of
lease1
|
152,478
|
(987)
|
(239)
|
151,491
|
(1,600)
|
Loss on disposal of
equipment
|
1,490
|
-
|
2,679
|
1,490
|
22,561
|
Share-based
compensation (recovery)
|
(1,306,862)
|
(792,852)
|
5,835,989
|
(2,099,714)
|
14,609,998
|
Shares, units and
warrants issued for services
|
-
|
-
|
74,595
|
-
|
227,471
|
Adjusted
EBITDA
|
$(7,028,270)
|
$(9,991,892)
|
$(5,673,109)
|
$(17,020,162)
|
$(11,065,045)
|
1During the
six months ended June 30, 2022, the Company terminated 2 lease
agreements and recognized a $151,491 loss on termination of
lease. During the six months ended June 30, 2021, the Company
terminated 1 lease agreement and recognized a $1,600 gain on
termination of lease.
|
Adjusted General and Administrative Expense
Management defines adjusted general and administrative expense
as general and administrative expense excluding non-cash items such
as share-based compensation and depreciation expense. Management
believes adjusted general and administrative expense provides
useful information as it represents the corporate costs to operate
the business excluding any non-cash items.
|
Three months
ended
June
30,
|
Three months
ended
March
31,
|
Three months
ended
June
30,
|
Six months
ended
June
30,
|
Six months
ended
June
30,
|
|
2022
|
2022
|
2021
|
2022
|
2021
|
General and
administrative expense
|
$(2,935,624)
|
$(4,844,691)
|
$(6,834,880)
|
$(7,780,315)
|
$(16,409,437)
|
Adjustments:
|
|
|
|
|
|
Share-based
compensation (recovery)
|
(1,218,638)
|
(846,012)
|
3,819,876
|
(2,064,650)
|
11,887,846
|
Depreciation
|
116,228
|
89,084
|
79,438
|
205,312
|
112,200
|
Adjusted general and
administrative expense
|
$(4,038,034)
|
$(5,601,619)
|
$(2,935,566)
|
$(9,639,653)
|
$
(4,409,391)
|
About The VERY GOOD Food Company
Inc.
The VERY GOOD Food Company Inc. is an emerging plant-based food
technology company that produces nutritious and delicious
plant-based meat and cheese products under VERY GOOD's core brands:
The VERY GOOD Butchers and The VERY GOOD Cheese Co.
www.verygoodfood.com.
OUR MISSION IS LOFTY BUT BEAUTIFULLY SIMPLE: GET MILLIONS TO
RETHINK THEIR FOOD CHOICES WHILE HELPING THEM DO THE WORLD A WORLD
OF GOOD. BY OFFERING PLANT-BASED FOOD OPTIONS SO DELICIOUS AND
NUTRITIOUS, WE'RE HELPING THIS KIND OF DIET BECOME THE NORM.
ON BEHALF OF THE VERY GOOD FOOD COMPANY INC.
Parimal Rana
Chief Executive Officer
Forward-Looking Statements
This news release contains "forward-looking information" within
the meaning of applicable securities laws in Canada and "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995, including Section 21E of the Securities
Exchange Act of 1934, as amended (collectively referred to as
"forward-looking information"), for the purpose of providing
information about management's current expectations and plans
relating to the future. Readers are cautioned that reliance on such
information may not be appropriate for other purposes.
Forward-looking information may be identified by words such as
"plans", "proposed", "expects", "anticipates", "intends",
"estimates", "may", "will", and similar expressions.
Forward-looking information contained or referred to in this news
release includes, but is not limited to: the Company's ability to
satisfy its existing and future cash obligations and to continue as
a going concern; the Company's plans and needs to seek a financing
to address near-term liquidity issues and continue operations, as
well as the Company's requirements for future financings; the
Company's belief that it will be able to raise capital through
financing in the near term to fund operations as it continues to
implement its new refocused strategy; the Company's plans to manage
inventory levels and its ongoing cost-reduction initiatives to
manage both short and long-term liquidity and re-establish a path
towards profitability; the Company's refocused strategy and its
three-prong approach to (1) Stabilize, (2) Right-Size, and (3)
Optimize and the Board of Directors' and management's work and
progress on successfully implementing such refocused strategy; the
focus of the Company's long-term strategy; the Company's ongoing
review of its eCommerce channel and the potential outcome of such
review; potential strategic private label and co-manufacturing
opportunities and the expected benefits that may be derived
therefrom; the Company's focus on the wholesale and food service
channels; the availability of alternatives of generating cash in
the short term such as disposing of non-core equipment and raw
materials to extend the Company's cash runway; the
continued North American retail geographic expansion for VERY
GOOD's products and the abilities of the Company's sales team: the
Company's ability to compete; trends and growth expectations in the
plant-based industry; and the impact of the COVID-19 pandemic on
VERY GOOD's business; the Company's ability to mitigate employee
turnover. Forward-looking information is based on a
number of factors and assumptions which have been used to develop
such information, but which may prove to be incorrect including,
but not limited to, material assumptions with respect to the
Company's ability to continue as a going concern; the Company's
ability to manage recent personnel changes; which is available at
www.sedar.com and www.sec.gov. The Company's ability to execute on
its strategy may also depend on the Company's ability to accurately
forecast customer demand for its products and manage its current
and future inventory levels, continued demand for VERY GOOD's
products, continued growth of the popularity of meat alternatives
and the plant-based food industry, no material deterioration in
general business and economic conditions, the successful placement
of VERY GOOD's products in retail stores and distribution in the
food service channel, the Company's ability to remain listed on the
Nasdaq, VERY GOOD's ability to successfully enter new markets, VERY
GOOD's ability to obtain necessary production equipment and human
resources as needed, VERY GOOD's relationship with its suppliers,
distributors and third-party logistics providers, and management's
ability to position VERY GOOD competitively. Although the Company
believes that the expectations reflected in such forward-looking
information are reasonable, undue reliance should not be placed on
forward-looking information because VERY GOOD can give no assurance
that such expectations will prove to be correct. Risks and
uncertainties that could cause actual results, performance or
achievements of VERY GOOD to differ materially from those expressed
or implied in such forward-looking information include, among
others, the impact of, uncertainties and risks associated with
negative cash flow and future financing requirements to sustain and
grow operations, limited history of operations and revenues and no
history of earnings or dividends, competition, risks relating to
the availability of raw materials, risks relating to regulation on
social media, expansion of facilities, risks related to credit
facilities, dependence on senior management and key personnel,
availability of labor, general business risk and liability,
regulation of the food industry, change in laws, regulations and
guidelines, compliance with laws, risks related to third party
logistics providers, unfavorable publicity or consumer perception,
increased costs as a result of being a United States public company, product
liability and product recalls, risks related to intellectual
property, risks relating to co-manufacturing, risks related to
expansion into the United States;
risks related to our acquisition strategy, taxation risks,
difficulties with forecasts, management of growth and litigation as
well as the risks associated with the ongoing COVID-19 pandemic.
For a more comprehensive discussion of the risks faced by VERY
GOOD, please refer to VERY GOOD's most recent Annual Information
Form filed with Canadian securities regulatory authorities at
www.sedar.com and as an exhibit to the Form 20-F filed with the SEC
on May 26, 2022 and available at
www.sec.gov. The forward-looking information in this news release
reflects the current expectations, assumptions and/or beliefs of
the Company based on information currently available. Any
forward-looking information speaks only as of the date of this news
release. VERY GOOD undertakes no obligation to publicly update or
revise any forward-looking information whether because of new
information, future events or otherwise, except as otherwise
required by law. The forward-looking information contained in this
news release is expressly qualified by this cautionary
statement.
None of the Nasdaq Stock Market LLC, TSX Venture Exchange, the
SEC or any other securities regulator has either approved or
disapproved the contents of this news release.
None of the Nasdaq, the TSX Venture Exchange or its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange), the SEC or any other securities regulator
accepts responsibility for the adequacy or accuracy of this news
release.
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SOURCE The Very Good Food Company Inc.