EX-4.5





 Exhibit 4.5 
  





 
 The Very Good Food Company | CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30,
2021 AND 2020 (Unaudited—Expressed in Canadian dollars) 













 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

 Condensed Interim Consolidated Statements of Financial Position 

(Expressed in Canadian dollars, unaudited) 
  

													
	 As at
	  	Notes	 	  	June 30, 2021	 	 	December 31, 2020	 
	 Assets
	  				  				 			
	 Current assets
	  				  				 			
	 Cash and cash equivalents
	  				  	$	 5,926,067	 	 	$	25,084,083	 
	 Accounts receivable
	  	 	4	 	  	 	1,408,396	 	 	 	449,583	 
	 Inventory
	  	 	5	 	  	 	3,338,690	 	 	 	1,195,535	 
	 Prepaids and deposits
	  	 	6	 	  	 	5,766,262	 	 	 	1,887,035	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total current assets
	  				  	 	16,439,415	 	 	 	28,616,236	 
	 Right-of-use assets
	  	 	7	 	  	 	17,420,754	 	 	 	5,046,597	 
	 Property and equipment
	  	 	8	 	  	 	5,787,866	 	 	 	740,728	 
	 Prepaids and deposits
	  	 	6	 	  	 	942,190	 	 	 	779,036	 
	 Goodwill
	  	 	9	 	  	 	3,479,535	 	 	 	—  	 
	 Deferred financing costs
	  	 	12	 	  	 	5,073,283	 	 	 	—  	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total assets
	  				  	$	 49,143,043	 	 	$	 35,182,597	 
		  				  	  
	  
	 	 	  
	  
	 
	 Liabilities and shareholders’ equity
	  

	 Current liabilities
	  				  				 			
	 Accounts payable and accrued liabilities
	  	 	10	 	  	$	 6,834,050	 	 	$	 1,871,728	 
	 Deferred revenue
	  				  	 	45,346	 	 	 	102,239	 
	 Current portion of lease liabilities
	  	 	11	 	  	 	793,433	 	 	 	146,935	 
	 Current portion of loans payable and other liabilities
	  	 	12	 	  	 	1,564,546	 	 	 	—  	 
	 Contingent consideration
	  	 	9	 	  	 	1,048,000	 	 	 	—  	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total current liabilities
	  				  	 	10,285,375	 	 	 	2,120,902	 
	 Lease liabilities
	  	 	11	 	  	 	17,285,051	 	 	 	5,389,352	 
	 Loans payable and other liabilities
	  	 	12	 	  	 	2,412,227	 	 	 	30,000	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total liabilities
	  				  	 	29,982,653	 	 	 	7,540,254	 
		  				  	  
	  
	 	 	  
	  
	 
	 Share capital
	  	 	14	 	  	 	44,848,614	 	 	 	39,335,150	 
	 Equity reserves
	  				  	 	18,520,188	 	 	 	5,009,980	 
	 Subscriptions received and receivable
	  				  	 	22,999	 	 	 	8,250	 
	 Accumulated other comprehensive income
	  				  	 	15,595	 	 	 	6,660	 
	 Deficit
	  				  	 	(44,247,006	) 	 	 	(16,717,697	) 
		  				  	  
	  
	 	 	  
	  
	 
	 Total shareholders’ equity
	  				  	 	19,160,390	 	 	 	27,642,343	 
		  				  	  
	  
	 	 	  
	  
	 
	 Total liabilities and shareholders’ equity
	  				  	$	 49,143,043	 	 	$	 35,182,597	 
		  				  	  
	  
	 	 	  
	  
	 

 Nature and continuance of operations (Note 1) 

Commitments (Notes 11 and 23) 
 Events after the
reporting period (Note 26) 
 Approved and authorized for issue by Board of Directors on August 18, 2021 

 

					
	 “Mitchell Scott”
	 	 “Dela Salem”
	 	
	Director	 	Director	 	


  
 The accompanying notes are an integral part of
these condensed interim consolidated financial statements 
  
 2 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

 Condensed Interim Consolidated Statements of Net Loss and Comprehensive Loss 

(Expressed in Canadian dollars, unaudited) 
  

																					
	 	  	 	 	  	Three months ended	 	 	Six months ended	 
	 	  	Notes	 	  	June 30, 2021	 	 	June 30, 2020	 	 	June 30, 2021	 	 	June 30, 2020	 
	 	  	 	 	  	 	 	 	(Restated –
Note 25)	 	 	 	 	 	(Restated –
Note 25)	 
	 Revenue
	  				  	$	 2,780,681	 	 	$	 1,087,790	 	 	$	 5,423,764	 	 	$	 1,426,342	 
	 Procurement expense
	  	 	7,8,21	 	  	 	(2,102,822	) 	 	 	(690,795	) 	 	 	(4,155,068	) 	 	 	(1,147,847	) 
	 Fulfilment expense
	  	 	7,8,21	 	  	 	(2,045,714	) 	 	 	(415,134	) 	 	 	(4,028,609	) 	 	 	(491,593	) 
	 General and administrative expense
	  	 	7,8,21	 	  	 	(6,834,880	) 	 	 	(723,599	) 	 	 	(16,409,437	) 	 	 	(1,335,815	) 
	 Marketing and investor relations expense
	  	 	21	 	  	 	(2,579,656	) 	 	 	(740,231	) 	 	 	(4,726,001	) 	 	 	(903,805	) 
	 Research and development expense
	  	 	8,21	 	  	 	(515,965	) 	 	 	(65,074	) 	 	 	(881,985	) 	 	 	(162,824	) 
	 Pre-production expense
	  	 	7,8,21	 	  	 	(656,288	) 	 	 	—  	 	 	 	(1,541,823	) 	 	 	—  	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Operating loss
	  				  	 	(11,954,644	) 	 	 	(1,547,043	) 	 	 	(26,319,159	) 	 	 	(2,615,542	) 
	 Finance expense
	  	 	17	 	  	 	(405,947	) 	 	 	(854,346	) 	 	 	(762,977	) 	 	 	(912,333	) 
	 Other expense
	  	 	18	 	  	 	(140,142	) 	 	 	(17,266	) 	 	 	(447,173	) 	 	 	(20,766	) 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net loss
	  				  	 	(12,500,733	) 	 	 	(2,418,655	) 	 	 	(27,529,309	) 	 	 	(3,548,641	) 
	 Other comprehensive income
	  				  				 				 				 			
	 Foreign currency translation gain
	  				  	 	4,461	 	 	 	—  	 	 	 	8,935	 	 	 	—  	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Comprehensive loss
	  				  	$	(12,496,272	) 	 	$	(2,418,655	) 	 	$	(27,520,374	) 	 	$	(3,548,641	) 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Loss per share – basic and diluted
	  				  	$	(0.13	) 	 	$	(0.05	) 	 	$	(0.28	) 	 	$	(0.07	) 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Weighted average number of shares outstanding – basic and diluted
	  				  	 	97,603,729	 	 	 	49,259,877	 	 	 	97,381,583	 	 	 	47,404,458	 
		  				  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 


  
 The accompanying notes are an integral part of
these condensed interim consolidated financial statements 
  
 3 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

 Condensed Interim Consolidated Statements of Changes in Equity (Deficiency) 

(Expressed in Canadian dollars except share amounts, unaudited) 
  

																													
	 	  	Number of
common shares	 	  	Share capital	 	 	Equity reserves	 	 	Share
subscriptions
received
(receivable)	 	 	Accumulated other
comprehensive
income	 	  	Deficit	 	 	Total
shareholders’
equity (deficiency)	 
	 Balance at January 1, 2020
	  	 	45,515,339	 	  	$	 2,245,422	 	 	$	 272,894	 	 	$	 —  	 	 	$	 —  	 	  	$	(2,858,897	) 	 	$	(340,581	) 
	 Issuance of units for cash
	  	 	16,100,000	 	  	 	4,025,000	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	4,025,000	 
	 Issuance of common shares for finders’ fees
	  	 	322,000	 	  	 	80,500	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	80,500	 
	 Share issuance costs
	  	 	—  	 	  	 	(646,108	) 	 	 	176,242	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	(469,866	) 
	 Issuance of common shares pursuant to the exercise of stock options
	  	 	262,500	 	  	 	100,470	 	 	 	(34,845	) 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	65,625	 
	 Issuance of common shares and units pursuant to the exercise of warrants
	  	 	2,588,536	 	  	 	773,101	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	773,101	 
	 Issuance of common shares pursuant to the conversion of convertible debentures
	  	 	7,494,716	 	  	 	1,873,222	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	1,873,222	 
	 Issuance of warrants for services
	  	 	—  	 	  	 	—  	 	 	 	80,324	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	80,324	 
	 Issuance of units for services
	  	 	166,670	 	  	 	21,240	 	 	 	3,760	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	25,000	 
	 Share-based compensation
	  	 	—  	 	  	 	—  	 	 	 	450,011	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	450,011	 
	 Net loss for the period
	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	(3,548,641	) 	 	 	(3,548,641	) 
		  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 
	 Balance at June 30, 2020 (Restated – Note 25)
	  	 	72,449,761	 	  	$	 8,472,847	 	 	$	 948,386	 	 	$	 —  	 	 	$	 —  	 	  	$	(6,407,538	) 	 	$	 3,013,695	 
		  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 
	 Balance at January 1, 2021
	  	 	96,640,432	 	  	$	39,335,150	 	 	$	 5,009,980	 	 	$	 8,250	 	 	$	 6,660	 	  	$	(16,717,697	) 	 	$	 27,642,343	 
	 Issuance of common shares pursuant to the exercise of stock options
	  	 	99,167	 	  	 	209,118	 	 	 	(159,493	) 	 	 	6,250	 	 	 	—  	 	  	 	—  	 	 	 	55,875	 
	 Issuance of common shares and units pursuant to the exercise of warrants
	  	 	639,350	 	  	 	3,920,438	 	 	 	(1,692,856	) 	 	 	(20,500	) 	 	 	—  	 	  	 	—  	 	 	 	2,207,082	 
	 Issuance of common shares for services
	  	 	42,694	 	  	 	227,471	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	227,471	 
	 Issuance of common shares for acquisitions
	  	 	202,005	 	  	 	1,156,437	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	1,156,437	 
	 Issuance of warrants for loan
	  	 	—  	 	  	 	—  	 	 	 	752,559	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	752,559	 
	 Share-based compensation
	  	 	—  	 	  	 	—  	 	 	 	14,609,998	 	 	 	—  	 	 	 	—  	 	  	 	—  	 	 	 	14,609,998	 
	 Subscription received
	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	28,999	 	 	 	—  	 	  	 	—  	 	 	 	28,999	 
	 Foreign currency translation gain
	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	8,935	 	  	 	—  	 	 	 	8,935	 
	 Net loss for the period
	  	 	—  	 	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	  	 	(27,529,309	) 	 	 	(27,529,309	) 
		  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 
	 Balance at June 30, 2021
	  	 	97,623,648	 	  	$	44,848,614	 	 	$	18,520,188	 	 	$	 22,999	 	 	$	15,595	 	  	$	(44,247,006	) 	 	$	 19,160,390	 
		  	  
	  
	 	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	  	  
	  
	 	 	  
	  
	 


  
 The accompanying notes are an integral part of
these condensed interim consolidated financial statements 
  
 4 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

 Condensed Interim Consolidated Statements of Cash Flows 

(Expressed in Canadian dollars, unaudited) 
  

									
	 Six months ended
	  	June 30, 2021	 	 	June 30, 2020
(Restated –
Note 25)	 
	 Net loss for the period
	  	$	(27,529,309	) 	 	$	(3,548,641	) 
	 Adjustments for non-cash items:
	  				 			
	 Finance expense
	  	 	764,182	 	 	 	147,333	 
	 Depreciation
	  	 	841,652	 	 	 	154,717	 
	 Gain on termination of lease
	  	 	(1,600	) 	 	 	—  	 
	 Loss on disposal of equipment
	  	 	22,561	 	 	 	—  	 
	 Loss on settlement of debt
	  	 	—  	 	 	 	765,000	 
	 Share-based compensation
	  	 	14,609,998	 	 	 	450,011	 
	 Shares and units issued for services
	  	 	227,471	 	 	 	25,000	 
	 Warrants issued for services
	  	 	—  	 	 	 	80,324	 
	 Changes in non-cash working capital items:
	  				 			
	 Accounts receivable
	  	 	(924,659	) 	 	 	(121,981	) 
	 Inventory
	  	 	(2,055,329	) 	 	 	(7,656	) 
	 Prepaids and deposits
	  	 	(1,144,701	) 	 	 	(8,858	) 
	 Accounts payable and accrued liabilities
	  	 	1,194,146	 	 	 	627,076	 
	 Deferred revenue
	  	 	(56,893	) 	 	 	188,849	 
	 Due from related parties
	  	 	—  	 	 	 	24,280	 
		  	  
	  
	 	 	  
	  
	 
	 Net cash and cash equivalents used in operating activities
	  	 	(14,052,481	) 	 	 	(1,224,546	) 
		  	  
	  
	 	 	  
	  
	 
	 Cash paid for acquisitions
	  	 	(1,250,000	) 	 	 	—  	 
	 Cash acquired from acquisitions
	  	 	9,306	 	 	 	—  	 
	 Purchase of property and equipment
	  	 	(3,599,115	) 	 	 	(112,507	) 
	 Security deposits paid for property and equipment
	  	 	(3,412,197	) 	 	 	—  	 
	 Acquisition of right-of-use
assets
	  	 	(29,408	) 	 	 	—  	 
		  	  
	  
	 	 	  
	  
	 
	 Net cash and cash equivalents used in investing activities
	  	 	(8,281,414	) 	 	 	(112,507	) 
		  	  
	  
	 	 	  
	  
	 
	 Proceeds from the issuance of units for cash
	  	 	—  	 	 	 	3,635,634	 
	 Proceeds from the exercise of warrants
	  	 	2,207,082	 	 	 	773,101	 
	 Proceeds from the exercise of stock options
	  	 	55,875	 	 	 	65,625	 
	 Proceeds from subscriptions received
	  	 	28,999	 	 	 	—  	 
	 Proceeds from loans payable
	  	 	1,891,092	 	 	 	499,129	 
	 Repayments of loans payable
	  	 	(240,000	) 	 	 	(236,128	) 
	 Deferred financing costs paid
	  	 	(238,164	) 	 	 	—  	 
	 Proceeds from loan payable to related parties
	  	 	—  	 	 	 	400,000	 
	 Repayment of loan payable and accrued interest to related parties
	  	 	—  	 	 	 	(411,728	) 
	 Payments of lease liabilities
	  	 	(532,097	) 	 	 	(82,629	) 
	 Payment of non-current lease deposits
	  	 	—  	 	 	 	(202,735	) 
		  	  
	  
	 	 	  
	  
	 
	 Net cash and cash equivalents provided by financing activities
	  	 	3,172,787	 	 	 	4,440,269	 
		  	  
	  
	 	 	  
	  
	 
	 Effect of foreign exchange rate changes on cash and cash equivalents
	  	 	3,092	 	 	 	—  	 
		  	  
	  
	 	 	  
	  
	 
	 (Decrease) increase in cash and cash equivalents
	  	 	(19,158,016	) 	 	 	3,103,216	 
	 Cash and cash equivalents, beginning of period
	  	 	25,084,083	 	 	 	405,610	 
		  	  
	  
	 	 	  
	  
	 
	 Cash and cash equivalents, end of period
	  	$	 5,926,067	 	 	$	3,508,826	 
		  	  
	  
	 	 	  
	  
	 
	 Cash
	  	$	 4,861,067	 	 	$	3,508,826	 
	 Redeemable guaranteed investment certificate (“GIC”)
	  	 	1,000,000	 	 	 	—  	 
	 Restricted redeemable GIC
	  	 	65,000	 	 	 	—  	 
		  	  
	  
	 	 	  
	  
	 
	 Total cash and cash equivalents
	  	$	 5,926,067	 	 	$	3,508,826	 
		  	  
	  
	 	 	  
	  
	 

 Supplemental cash flow disclosures (Note 19) 

  
 The accompanying notes are an integral part of
these condensed interim consolidated financial statements 
  
 5 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	1.	 Nature and continuance of operations 



The Very Good Food Company Inc. (the “Company”) was incorporated on December 27, 2016, under the laws of the
province of British Columbia, Canada. The Company is an emerging plant-based food technology company that designs, develops, produces, distributes, and sells a variety of plant-based meats and other food alternatives. To date, the Company has
developed a core product line under The Very Good Butchers brand. The Company changed its name from The Very Good Butchers Inc. to The Very Good Food Company Inc. on October 1, 2019. 

Effective June 18, 2020, the Company’s common shares commenced trading on the Canadian Securities Exchange (the
“CSE”) under the symbol “VERY”. Effective July 27, 2020, the Company’s shares commenced trading on the Frankfurt Stock Exchange (the “FSE”) under the symbol “0SI”. Effective
October 14, 2020, the Company’s shares commenced trading on the OTC QB Market (the “OTCQB”) under the symbol “VRYYF”. Effective March 17, 2021, the Company’s shares commenced trading on the TSX Venture
Exchange (“TSXV”). The Company ceased trading on the CSE on March 16, 2021. 
 The Company’s registered and
records office are located at 800 – 885 West Georgia Street, Vancouver, British Columbia, BC V6C 3H1. 
 These condensed interim
consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which assumes that the Company will be able to realize its assets and satisfy its liabilities in the normal course of business for
the foreseeable future. 
 For the six-month period ended June 30, 2021, the Company
generated a net loss of $27,529,309 (2020 – $3,548,641) and negative cash flows from operations of $14,052,481 (2020 – $1,224,546). The Company expects to incur further losses in the development of its business and has significant capital
projects planned. The continued operations of the Company are dependent on management’s ability to manage costs, raise additional equity or debt, and on future profitable operations. Whether and when the Company can generate sufficient
operating cash flows to pay for its expenditures and settle its obligations as they fall due is uncertain. As a result of these conditions, management has concluded, in making its going concern assessment, that there are material uncertainties
related to events and conditions that may cast significant doubt upon the Company’s ability to continue as a going concern. 

These condensed consolidated interim financial statements do not reflect the adjustments to the carrying values of assets and liabilities
and the reported expenses and statement of financial position classifications that would be necessary were the going concern assumption inappropriate. These adjustments could be material. 

Covid-19 Estimation Uncertainty 

On March 11, 2020, the World Health Organization declared the outbreak of the novel coronavirus (“COVID-19”) a global pandemic. This has resulted in governments worldwide, including the Canadian government, to enact emergency measures to combat the spread of the virus. These measures, which include
social distancing, the implementation of travel bans, and closures of non-essential businesses, have caused material disruption to businesses globally, resulting in an economic slowdown. As at June 30,
2021, the Company has not observed any material impairments of our assets or a significant change in the fair value of assets due to the COVID-19 pandemic. 

The situation is dynamic and the ultimate duration and magnitude of the impact of COVID-19 on the
economy and the financial effect on our business, financial position and operating results remain unknown at this time. These impacts could include the ability of the Company to raise capital, the impairment in the value of our long-lived assets, or
potential future decreases in revenue or the profitability of our ongoing and future operations. The Company is closely monitoring the impact of the pandemic on all aspects of its business. 

  
  

6 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	2.	 Basis of presentation and measurement 



Statement of compliance 
 These
condensed interim consolidated financial statements have been prepared in conformity with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, using the same accounting policies as detailed in the
Company’s annual audited consolidated financial statements for the year ended December 31, 2020. These condensed financial statements do not include all the information required for full annual financial statements in accordance with
International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee
(“IFRIC”). These condensed interim consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements. 

These condensed interim consolidated financial statements of the Company were authorized for issue by the Board of Directors on
August 18, 2021. 
 Basis of presentation 

These condensed interim consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: The Very
Good Butchers Inc., 1218169 B.C. Ltd., 1218158 B.C. Ltd., The Cultured Nut Inc., and Lloyd-James Marketing Group Inc., companies incorporated in the province of British Columbia, Canada, and VGFC Holdings LLC, a company incorporated in the state of
Delaware, U.S.A. 
 Control exists when the Company has the power to govern the financial and operating policies of an entity so as to
obtain benefits from its activities. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences. All inter-company balances and transactions have been eliminated on
consolidation. 
 These condensed interim consolidated financial statements have been prepared on an accrual basis and are based on
historical costs. The presentation and functional currency of the Company is the Canadian dollar. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation have been included. 

The Company structures its condensed interim consolidated statements of net loss and comprehensive loss on a functional basis. For that
purpose, the Company defines cost of sales as procurement expense and gross profit as revenues less procurement expense. 
 Critical accounting
estimates and judgements 
 The preparation of these condensed interim financial statements in accordance with IFRS requires the
Company to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities and contingent assets and liabilities at the date of the financial statements, and revenues and
expenses during the period. The Company’s management reviews these estimates and underlying assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under
the circumstances. Revisions to estimates are adjusted for prospectively in the period in which the estimates are revised. Actual results may differ from these judgements, estimates and assumptions. 

  
 7 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	2.	 Basis of presentation and measurement (continued) 



 

 Information on significant areas of uncertainty and critical estimates in applying
accounting policies that have the most significant effect on the amounts recognized in the financial statements relate to the following: 

Share-based compensation 
 The
Company utilizes the Black-Scholes Option Pricing Model (“Black-Scholes”) to estimate the fair value of stock options and warrants granted to directors, officers, employees and service providers. The use of Black-Scholes requires
management to make various estimates and assumptions that impact the value assigned to the stock options including the forecast future volatility of the stock price, the risk-free interest rate, dividend yield and the expected life of the stock
options. Any changes in these assumptions could have a material impact on the share-based compensation calculation value. See also note 16. 

Carrying value of inventory 

The Company records valuation adjustments for inventory by comparing the inventory cost to its net realizable value. The process requires
the use of estimates and assumptions related to future market demand, costs and prices. Such assumptions are reviewed and may have a significant impact on the valuation adjustments for inventory. 

Business combinations 

Judgment is used in determining whether an acquisition is a business combination or an asset acquisition and assessing whether the
amounts paid on achievement of milestones represents contingent consideration or compensation for post-acquisition services. Contingent consideration that is classified as a liability is remeasured at fair value at each reporting date and subsequent
changes in the fair value of the contingent consideration are recognised in profit or loss. Accounting for acquisitions requires estimates with respect to the fair value of the assets acquired and liabilities assumed. 

Impairment 
 The Company
assesses impairment of non-financial assets such as goodwill, right-of-use assets, and property and equipment. In assessing
impairment, management estimates the recoverable amount of each asset or cash generating unit (“CGU”) based on expected future cash flows. When measuring expected future cash flows, management makes assumptions about future growth of
profits which relate to future events and circumstances. Actual results could vary from these estimated future cash flows. Estimation uncertainty relates to assumptions about future operating results and the application of an appropriate discount
rate. 
 Goodwill is subject to impairment testing on an annual basis. However, if indicators of impairment are present, the Company
will review goodwill for impairment when such indicators arise. In addition, at each reporting period, the Company reviews whether there are indicators that the recoverable amount of long-lived assets may be less than their carrying amount. 

Goodwill and long-lived assets are reviewed for impairment by determining the recoverable amount of each CGU or groups of CGUs to which
the goodwill or long-lived assets relate. Management estimates the recoverable amount of the CGUs based on the higher of value-in-use (“VIU”) and fair value
less costs of disposal (“FVLCD”). The VIU calculations are based on expected future cash flows. When measuring expected future cash flows, management makes key assumptions about future growth of profits which relate to future events and
circumstances. Estimation uncertainty relates to assumptions about future operating results and the application of an appropriate discount rate. Actual results could vary from these estimates which may cause significant adjustments to the
Company’s goodwill or long-lived assets in subsequent reporting periods. 

  
 8 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	2.	 Basis of presentation and measurement (continued) 



 

 Leases 

The lease liability and right-of-use asset valuation is
based on the present value of the lease payments over the lease term. The lease term is determined as the non-cancellable term of the lease, which may include options to extend or terminate the lease when it
is reasonably certain that the Company will exercise that option. The Company applies judgment in evaluating whether it is reasonably certain whether or not to exercise the option to extend or terminate the lease, and any modifications to the lease
term will result in the revaluation of the lease. The present value of the lease payments is dependent on the Company’s estimate of its incremental borrowing rates. 
  

	3.	 New Accounting Pronouncements 



The following IFRS standards have been recently issued by the IASB. Pronouncements that are irrelevant or not expected to have a
significant impact have been excluded. 
 Amendments to IAS 1: Classification of Liabilities as Current or
Non-Current 
 The amendment clarifies the requirements relating to determining if a
liability should be presented as current or non-current in the statement of financial position. Under the new requirement, the assessment of whether a liability is presented as current or non-current is based on the contractual arrangements in place as at the reporting date and does not impact the amount tor timing of recognition. The amendment applies retrospectively for annual reporting periods
beginning on or after January 1, 2023. The Company is currently evaluating the potential impact of this amendment on the Company’s consolidated financial statements. 

Amendments to IAS 37: Onerous Contracts and the Cost of Fulfilling a Contract 

The amendment specifies that the “cost of fulfilling” a contract comprises the “costs that relate directly to the
contract”. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract or an allocation of other costs that relate directly to fulfilling contracts. The amendment is effective for annual periods
beginning on or after January 1, 2022, with early application permitted. The Company is currently evaluating the potential impact of this amendment on the Company’s consolidated financial statements. 

 

	4.	 Accounts receivable 



 

									
	 	  	As at June 30,
2021	 	  	As at December 31,
2020	 
	 GST receivable
	  	$	1,288,628	 	  	$	366,561	 
	 Trade accounts receivable
	  	 	118,958	 	  	 	82,740	 
	 Accrued interest receivable
	  	 	810	 	  	 	282	 
		  	  
	  
	 	  	  
	  
	 
		  	$	1,408,396	 	  	$	449,583	 
		  	  
	  
	 	  	  
	  
	 

 Trade accounts receivable is recorded net of an allowance for doubtful accounts of $28,757 (December 31,
2020 - $39,917). 

  
 9 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	5.	 Inventory 



Inventory consisted primarily of raw materials, packaging and restaurant supplies and finished goods which were either at the retail
location, warehouses, storage space or held with third party distributors. 
  

									
	 	  	As at June 30,
2021	 	  	As at December 31,
2020	 
	 Raw materials
	  	$	1,550,622	 	  	$	320,346	 
	 Packaging and restaurant supplies
	  	 	966,796	 	  	 	333,728	 
	 Finished goods
	  	 	821,272	 	  	 	541,461	 
		  	  
	  
	 	  	  
	  
	 
		  	$	3,338,690	 	  	$	1,195,535	 
		  	  
	  
	 	  	  
	  
	 

 Included in finished goods inventory at June 30, 2021, was $44,677 (December 31, 2020 - $12,053) of
depreciation expense related to property and equipment and $27,561 (December 31, 2020 - $7,502) related to right-of-use assets used in production. 

 

	6.	 Prepaids and deposits 



 

									
	 	  	As at June 30,
2021	 	  	As at December 31,
2020	 
	 Prepaid expenses
	  	$	 1,146,907	 	  	$	 432,039	 
	 Security deposits
	  	 	4,654,802	 	  	 	1,293,272	 
	 Lease deposits (Notes 11 and 23)
	  	 	906,743	 	  	 	940,760	 
		  	  
	  
	 	  	  
	  
	 
		  	 	6,708,452	 	  	 	2,666,071	 
	 Less: current portion of prepaids and deposits
	  	 	(5,766,262	) 	  	 	(1,887,035	) 
		  	  
	  
	 	  	  
	  
	 
		  	$	 942,190	 	  	$	 779,036	 
		  	  
	  
	 	  	  
	  
	 

  

	7.	 Right-of-use assets



  

																	
	 	  	Right-of-use
building	 	  	Right-of-use
equipment	 	  	Right-of-use
vehicle	 	  	Total	 
	 Cost
	  				  				  				  			
	 Balance, December 31, 2020
	  	$	 5,280,607	 	  	$	 151,117	 	  	$	 23,767	 	  	$	 5,455,491	 
	 Additions
	  	 	11,364,604	 	  	 	1,683,250	 	  	 	33,157	 	  	 	13,081,011	 
	 Early termination of lease
	  	 	(7,493	) 	  	 	—  	 	  	 	(23,767	) 	  	 	(31,260	) 
	 Foreign exchange translation adjustment
	  	 	(76,483	) 	  	 	—  	 	  	 	—  	 	  	 	(76,483	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance, June 30, 2021
	  	$	16,561,235	 	  	$	1,834,367	 	  	$	 33,157	 	  	$	18,428,759	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Accumulated Depreciation
	  				  				  				  			
	 Balance, December 31, 2020
	  	$	(342,342	) 	  	$	(61,067	) 	  	$	(5,485	) 	  	$	(408,894	) 
	 Depreciation
	  	 	(551,627	) 	  	 	(52,438	) 	  	 	(5,469	) 	  	 	(609,534	) 
	 Early termination of leases
	  	 	2,366	 	  	 	—  	 	  	 	5,942	 	  	 	8,308	 
	 Foreign exchange translation adjustment
	  	 	2,115	 	  	 	—  	 	  	 	—  	 	  	 	2,115	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance, June 30, 2021
	  	$	(889,488	) 	  	$	(113,505	) 	  	$	(5,012	) 	  	$	(1,008,005	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Carrying amounts
	  				  				  				  			
	 Balance, December 31, 2020
	  	$	4,938,265	 	  	$	 90,050	 	  	$	 18,282	 	  	$	 5,046,597	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Balance, June 30, 2021
	  	$	15,671,747	 	  	$	1,720,862	 	  	$	 28,145	 	  	$	17,420,754	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 


  
 10 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	7.	 Right-of-use assets
(continued) 


  

 The additions in
right-of-use assets (building and equipment) during the six months ended June 30, 2021, are primarily related to the Rupert Facility. 

Depreciation of right-of-use assets included in the
condensed interim consolidated financial statements is split as follows: 
  

									
	 	  	As at June 30,
2021	 	  	As at June 30,
2020	 
	 Consolidated statements of financial position
	  				  			
	 Included in inventory
	  	$	19,704	 	  	$	—  	 

  

																	
	 	  	Three months ended
June 30,	 	  	Six months ended
June 30,	 
	 	  	2021	 	  	2020	 	  	2021	 	  	2020	 
	 Consolidated statements of net loss and comprehensive loss
	  
	  				  				  			
	 Included in procurement expense
	  	$	 99,412	 	  	$	28,399	 	  	$	127,240	 	  	$	56,660	 
	 Included in fulfilment expense
	  	 	92,861	 	  	 	3,248	 	  	 	107,461	 	  	 	3,248	 
	 Included in general and administrative expense
	  	 	40,360	 	  	 	48,730	 	  	 	42,943	 	  	 	49,873	 
	 Included in pre-production expense
	  	 	132,304	 	  	 	—  	 	  	 	312,186	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	$	364,937	 	  	$	80,377	 	  	$	589,830	 	  	$	109,781	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	8.	 Property and equipment 



 

																									
	 	  	Restaurant,
production,
and R&D
equipment	 	 	Furniture
and
fixtures	 	 	Computer
equipment
and
software	 	 	Leasehold
improvements	 	 	Vehicle	 	 	Total	 
	 Cost
	  

	 At December 31, 2020
	  	$	 364,723	 	 	$	125,142	 	 	$	 107,870	 	 	$	 253,149	 	 	$	 69,781	 	 	$	 920,665	 
	 Additions
	  	 	2,680,296	 	 	 	204,186	 	 	 	289,848	 	 	 	2,122,000	 	 	 	67,294	 	 	 	5,363,624	 
	 Disposals
	  	 	(2,679	) 	 	 	(9,364	) 	 	 	—  	 	 	 	—  	 	 	 	(8,559	) 	 	 	(20,602	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 At June 30, 2021
	  	$	3,042,340	 	 	$	319,964	 	 	$	 397,718	 	 	$	2,375,149	 	 	$	128,516	 	 	$	6,263,687	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Accumulated depreciation
	  

	 At December 31, 2020
	  	 	(63,934	) 	 	 	(10,466	) 	 	 	(34,207	) 	 	 	(52,323	) 	 	 	(19,007	) 	 	 	(179,937	) 
	 Depreciation
	  	 	(58,498	) 	 	 	(20,435	) 	 	 	(125,079	) 	 	 	(83,412	) 	 	 	(9,102	) 	 	 	(296,526	) 
	 Disposals
	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	642	 	 	 	642	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 At June 30, 2021
	  	$	(122,432	) 	 	$	(30,901	) 	 	$	(159,286	) 	 	$	(135,735	) 	 	$	(27,467	) 	 	$	(475,821	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net book value
	  

	 At December 31, 2020
	  	$	 300,789	 	 	$	114,676	 	 	$	 73,663	 	 	$	 200,826	 	 	$	 50,774	 	 	$	 740,728	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 At June 30, 2021
	  	$	2,919,908	 	 	$	289,063	 	 	$	238,432	 	 	$	2,239,414	 	 	$	101,049	 	 	$	5,787,866	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 As at June 30, 2021, a total of $10,057 (December 31, 2020 - $81,000) of furniture and fixtures,
$1,784,785 (December 31, 2020 - $nil) of production equipment, and $nil (December 31, 2020 - $63,557) of leasehold improvements related to property and equipment under construction, and no depreciation has been recognized. The Company will begin
recognizing depreciation once the underlying assets are ready for their intended use. 

  
 11 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	8.	 Property and equipment (continued) 



 

 Depreciation of property and equipment included in the condensed interim consolidated
financial statements is split as follows: 
  

									
	 	  	As at June 30,
2021	 	  	As at June 30,
2020	 
	 Consolidated statements of financial position
	  				  			
		  	  
	  
	 	  	  
	  
	 
	 Included in inventory
	  	$	44,704	 	  	$	—  	 
		  	  
	  
	 	  	  
	  
	 

  

																	
	 	  	Three months ended June 30,	 	  	Six months ended June 30,	 
	 	  	2021	 	  	2020	 	  	2021	 	  	2020	 
	 Consolidated statements of net loss and comprehensive loss
	  
	  				  			
	 Included in procurement expense
	  	$	101,996	 	  	$	17,692	 	  	$	146,308	 	  	$	32,818	 
	 Included in fulfilment expense
	  	 	1,355	 	  	 	49	 	  	 	2,300	 	  	 	49	 
	 Included in general and administrative expense
	  	 	39,078	 	  	 	5,088	 	  	 	69,257	 	  	 	10,304	 
	 Included in research and development expense
	  	 	1,018	 	  	 	883	 	  	 	2,038	 	  	 	1,765	 
	 Included in pre-production expense
	  	 	3,784	 	  	 	—  	 	  	 	31,919	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	$	147,231	 	  	$	23,712	 	  	$	251,822	 	  	$	44,936	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	9.	 Acquisitions 



The Cultured Nut Inc. 
 On
February 23, 2021, the Company closed a share purchase agreement with the shareholders of The Cultured Nut Inc. (“TCN”) to purchase 100% of the issued and outstanding Class V Voting Shares, Class A Non-Voting Common Shares, Class D Non-Voting Common Shares and Class C Non-Voting Common Shares (collectively, the
“Shares”). TCN, an artisan vegan cheese producer on the West Coast of Canada, with several innovative products including block style cheeses. In consideration for the acquisition of TCN, the Company agreed to pay the following: 

 

	 	•	 	 $925,000 due on closing (paid); 



 

	 	•	 	 139,676 common shares due on closing (issued); 



 

	 	•	 	 $75,000 on August 30, 2021; and 



 

	 	•	 	 Up to $1,000,000 contingent on the successful achievement of certain milestones related to the integration of TCN’s
business over a 12-month period. 


 The Company also agreed to pay an amount
equal to the closing working capital of TCN, equal to the difference between the current assets and current liabilities on the date of acquisition. The Company incurred acquisition-related costs of $118,751, which have been included in other expense
in the consolidated statement of net loss and comprehensive loss. 
 The preliminary purchase price allocation for the acquisition of
TCN is summarized as follows: 
  

					
	 Acquisition consideration
	  			
	 Cash
	  	$	1,000,000	 
	 Fair value of common shares
	  	 	790,566	 
	 Contingent consideration
	  	 	698,000	 
	 Working capital consideration
	  	 	36,219	 
		  	  
	  
	 
	 Total acquisition consideration
	  	$	2,524,785	 
		  	  
	  
	 


  
 12 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	9.	 Acquisitions (continued) 



 


					
	 Fair value of TCN’s net assets acquired
	  			
	 Cash and cash equivalents
	  	$	3,895	 
	 Accounts receivable
	  	 	14,218	 
	 Inventory
	  	 	23,418	 
	 Prepaids and deposits
	  	 	7,788	 
	 Right-of-use assets
	  	 	127,043	 
	 Property and equipment
	  	 	65,851	 
	 Goodwill
	  	 	2,422,916	 
	 Accounts payable and accrued liabilities
	  	 	(12,801	) 
	 Lease liabilities
	  	 	(127,543	) 
		  	  
	  
	 
	 Total fair value of TCN’s net assets acquired
	  	$	2,524,785	 
		  	  
	  
	 

 In accordance with the acquisition method of accounting, the acquisition cost has been allocated on a
preliminary basis to the identifiable underlying assets acquired and liabilities assumed, based upon their estimated fair values at the date of acquisition. The Company has retained an independent appraiser to determine the fair value of assets
acquired and liabilities assumed and the work of such appraiser is ongoing. As such the purchase price allocation at June 30, 2021 is preliminary and the determination of the final working capital adjustment and contingent consideration, the
identification of any intangible assets and the finalization of the value of goodwill remains provisional. If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition
identifies adjustments to the above amounts, or any additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised. 

The goodwill is attributable mainly to the expected synergies and future income and growth expected to be achieved from integrating TCN
into the Company’s existing business. 
 Lloyd-James Marketing Group Inc. 

On March 11, 2021, the Company closed a share purchase agreement with the sole shareholder of Lloyd-James Marketing Group Inc.
(“Lloyd-James”) to purchase 100% of the issued and outstanding common shares (the “Shares”). Lloyd-James is a wholesale and food service broker who specializes in the plant-based food industry has a history of placement in
large natural, speciality and conventional grocery retailers. In consideration for the acquisition of Lloyd-James, the Company agreed to pay the following: 
  

	 	•	 	 $325,000 due on closing (paid); 



 

	 	•	 	 62,329 common shares due on closing (issued); and 



 

	 	•	 	 Up to $350,000 contingent on the successful achievement of certain milestones related to the integration of Lloyd-James
business over a 12 month period. 


 The Company also agreed to pay an amount equal to the closing working capital of
Lloyd-James, equal to the difference between the current assets and current liabilities on the date of acquisition. The Company incurred acquisition-related costs of $57,440, which have been included in other expense in the consolidated statement of
net loss and comprehensive loss. 

  
 13 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	9.	 Acquisitions (continued) 



 

 The preliminary purchase price allocation for the acquisition of Lloyd-James is
summarized as follows: 
  

					
	 Acquisition consideration
	  			
	 Cash
	  	$	325,000	 
	 Fair value of common shares
	  	 	365,871	 
	 Contingent consideration
	  	 	350,000	 
	 Working capital consideration
	  	 	25,648	 
		  	  
	  
	 
	 Total acquisition consideration
	  	$	1,066,519	 
		  	  
	  
	 

  

					
	 Fair value of Lloyd-James’s net assets acquired
	  			
	 Cash and cash equivalents
	  	$	5,411	 
	 Accounts receivable
	  	 	19,936	 
	 Goodwill
	  	 	1,056,619	 
	 Accounts payable and accrued liabilities
	  	 	(15,447	) 
		  	  
	  
	 
	 Total fair value of Lloyd-James’s net assets acquired
	  	$	1,066,519	 
		  	  
	  
	 

 In accordance with the acquisition method of accounting, the acquisition cost has been allocated on a
preliminary basis to the identifiable underlying assets acquired and liabilities assumed, based upon their estimated fair values at the date of acquisition. The Company has retained an independent appraiser to determine the fair value of assets
acquired and liabilities assumed and the work of such appraiser is ongoing. As such the purchase price allocation at June 30, 2021 is preliminary and the determination of the final working capital adjustment and contingent consideration, the
identification of any intangible assets and the finalization of the value of goodwill remains provisional. If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition
identifies adjustments to the above amounts, or any additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised. 

The goodwill is attributable mainly to the skills and technical talent of Lloyd-James work force and the synergies expected to be
achieved from integrating Lloyd-James into the Company’s existing business. 
  

	10.	 Accounts payables and accrued liabilities 



 

									
	 	  	As at June 30,
2021	 	  	As at December 31,
2020	 
	 Accounts payable
	  	$	3,573,088	 	  	$	1,173,048	 
	 Accrued liabilities
	  	 	3,260,962	 	  	 	698,680	 
		  	  
	  
	 	  	  
	  
	 
		  	$	6,834,050	 	  	$	1,871,728	 
		  	  
	  
	 	  	  
	  
	 


  
 14 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	11.	 Lease liabilities 



Lease liabilities consist of leases for retail, production and distribution facilities, equipment and a vehicle. The leases have been
discounted using weighted average interest rates ranging between 3.0% and 12.5% as estimated incremental borrowing rates of the Company for similar assets. 
  

					
	 	  	Six-months ended
June 30, 2021	 
	 Balance, beginning of period
	  	$	5,536,287	 
	 Additions
	  	 	12,532,758	 
	 Lease payments
	  	 	(532,097	) 
	 Early termination of leases
	  	 	(24,552	) 
	 Lease concessions
	  	 	—  	 
	 Interest expense
	  	 	646,299	 
	 Foreign exchange translation adjustment
	  	 	(80,211	) 
		  	  
	  
	 
	 Balance, end of period
	  	$	18,078,484	 
	 Less: current portion of lease liabilities
	  	 	(793,433	) 
		  	  
	  
	 
	 Lease liabilities
	  	$	17,285,051	 
		  	  
	  
	 

 The Company’s future minimum lease payments for the leases for retail, warehouse, production
facilities, equipment and vehicle are as follows: 
  

																	
	 Fiscal year ending:
	  	Retail,
warehouse and
production
facilities	 	  	Equipment	 	  	Vehicle	 	  	Total	 
	 December 31, 2021
	  	$	 899,172	 	  	$	 149,991	 	  	$	 6,087	 	  	$	 1,055,250	 
	 December 31, 2022
	  	 	1,830,964	 	  	 	287,619	 	  	 	12,175	 	  	 	2,130,758	 
	 December 31, 2023
	  	 	1,851,299	 	  	 	285,519	 	  	 	12,175	 	  	 	2,148,993	 
	 December 31, 2024
	  	 	1,868,919	 	  	 	238,717	 	  	 	468	 	  	 	2,108,104	 
	 December 31, 2025
	  	 	1,885,744	 	  	 	225,396	 	  	 	—  	 	  	 	2,111,140	 
	 December 31, 2026 and thereafter
	  	 	20,838,830	 	  	 	55,164	 	  	 	—  	 	  	 	20,893,994	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total lease payments
	  	 	29,174,928	 	  	 	1,242,406	 	  	 	30,905	 	  	 	30,448,239	 
	 Amounts representing interest over the term of the leases
	  	 	(12,221,497	) 	  	 	(145,818	) 	  	 	(2,440	) 	  	 	(12,369,755	) 
	 Present value of net lease payments
	  	 	16,953,431	 	  	 	1,096,588	 	  	 	28,465	 	  	 	18,078,484	 
	 Less: Current portion
	  	 	(546,811	) 	  	 	(235,963	) 	  	 	(10,659	) 	  	 	(793,433	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Long-term portion
	  	$	16,406,620	 	  	$	 860,625	 	  	$	17,806	 	  	$	17,285,051	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Further information about our leases facilities is provided in Note 23 Commitments. 

  
 15 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	12.	 Loans payable and other liabilities 



 

																					
	 	  	CEBA loan	 	 	Revolving line
of credit	 	  	Senior secured
term loan	 	  	Credit facility
fee liability	 	 	Total	 
	 Balance, December 31, 2020
	  	$	 30,000	 	 	$	 —  	 	  	$	 —  	 	  	$	 —  	 	 	$	 30,000	 
	 Additions
	  	 	—  	 	 	 	566,910	 	  	 	1,324,182	 	  	 	2,520,000	 	 	 	4,411,092	 
	 Discount
	  	 	—  	 	 	 	—  	 	  	 	—  	 	  	 	(231,035	) 	 	 	(231,035	) 
	 Accretion expense
	  	 	—  	 	 	 	—  	 	  	 	—  	 	  	 	6,716	 	 	 	6,716	 
	 Repayments
	  	 	(30,000	) 	 	 	—  	 	  	 	—  	 	  	 	(210,000	) 	 	 	(240,000	) 
		  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 
	 Balance, June 30, 2021
	  	 	—  	 	 	 	566,910	 	  	 	1,324,182	 	  	 	2,085,681	 	 	 	3,976,773	 
	 Less: Current portion
	  	 	—  	 	 	 	—  	 	  	 	—  	 	  	 	(1,564,546	) 	 	 	(1,564,546	) 
		  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 
	 Long-term portion
	  	$	 —  	 	 	$	566,910	 	  	$	1,324,182	 	  	$	 521,135	 	 	$	2,412,227	 
		  	  
	  
	 	 	  
	  
	 	  	  
	  
	 	  	  
	  
	 	 	  
	  
	 

 During the year ended December 31, 2020, the Company received a loan totalling $40,000 from its bank
under the Canada Emergency Business Account program (“CEBA”) funded by the Government of Canada. The loan is interest free and may be repaid any time before December 31, 2022, at which time if unpaid, the remaining balance will
convert to a 3-year term loan at an interest rate of 5% per annum. If the Company repays the loan prior to December 31, 2022, there will be loan forgiveness of 25% of the loan, up to $10,000. During the
year ended December 31, 2020, the Company recognized $10,000 as forgiveness of loan as it was reasonably certain that the Company would repay the loan before December 31, 2022. During the six months ended June 30, 2021, the Company
repaid the loan of $30,000. 
 On June 7, 2021, the Company entered into a loan agreement (the “Loan Agreement”) for a
senior secured credit facility (the “Credit Facility”) with Waygar Capital Inc. (the “Agent”), as agent for Ninepoint Canadian Senior Debt Master Fund L.P. (the “Lender”). The Credit Facility consists of a $20,000,000
revolving line of credit and a $50,000,000 senior secured asset term loan. All amounts drawn under the Credit Facility will incur interest at a rate of 9.95% per annum on the unpaid principal amount of outstanding advances, will be repaid in full
upon maturity, and are secured by a first-priority security interest on substantially all of the Company’s assets. The revolving line of credit is also subject to an unused line fee of 1% per annum. The Credit Facility will become due on
June 7, 2023, subject to the Company’s option to extend the maturity date for an additional 12 months on terms and conditions to be mutually agreed to between the Company and the Lender. In connection with the Loan Agreement, the Company
issued 225,000 common share purchase warrants to the Agent with a fair value of $752,559 to the Agent, which are exercisable for one common share of the Company at a price of C$5.62 for a period of 60 months from the date of issuance. The warrants
are subject to a hold period of four months and one day from issuance. In addition, the Company agreed to pay a credit facility fee of $2,520,000 to the Agent, which is payable as follows: $210,000 payable within 5 days of closing (paid); $105,000
payable on or before July 7, 2021 (paid subsequently); $105,000 payable on or before August 8, 2021 (paid subsequently); $105,000 on or before September 5, 2021; $105,000 on or before October 5, 2021; $630,000 on or before
June 6, 2022; $630,000 on or before June 8, 2022; and $630,000 on or before June 7, 2023. The Company also incurred other financing costs of $2,142,926 in connection with the financing, of which $1,904,762 is included in accounts
payable and accrued liabilities at June 30, 2021. 
 During the six months ended June 30, 2021, the Company received a total
of $1,891,092 pursuant to the Credit Facility and recognized the net present value of the credit facility fee payable of $2,288,965, with a corresponding discount of $231,035. During the six months ended June 30, 2021, the Company recognized
interest and accretion expense of $16,945. As at June 30, 2021, a total of $3,976,773 is outstanding, net of an unamortized discount of $224,319, and $10,229 is outstanding for interest, which is included in accounts payable and accrued
liabilities. The Company incurred debt financing costs totalling $5,184,450, which will be amortized over the term of the Credit Facility at the effective interest rate. During the six months ended June 30, 2021, the Company recognized
accretion expense of the deferred financing costs of $111,167. As at June 30, 2021, the remaining carrying value of the deferred financing costs was $5,073,283. 

  
 16 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	13.	 Related party balances and transactions 



Related party transactions 

The Company’s key management personnel have the authority and responsibility for planning, directing, and controlling the activities
of the Company and consists of the Company’s executive management team and directors. Compensation was as follows: 
  

																	
	 	  	Three months ended June 30,	 	  	Six months ended June 30,	 
	 	  	2021	 	  	2020	 	  	2021	 	  	2020	 
	 Salaries incurred to key management personnel
	  	$	 246,923	 	  	$	 69,131	 	  	$	 540,308	 	  	$	 99,121	 
	 Professional fees incurred to the former CFO
	  	 	—  	 	  	 	55,000	 	  	 	—  	 	  	 	100,406	 
	 Directors fees
	  	 	—  	 	  	 	—  	 	  	 	6,000	 	  	 	—  	 
	 Share-based compensation
	  	 	2,778,908	 	  	 	84,459	 	  	 	8,086,241	 	  	 	292,285	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	$	3,025,831	 	  	$	208,590	 	  	$	8,632,549	 	  	$	491,812	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	14.	 Share capital 



Authorized share capital 

Unlimited number of common shares without par value. 

Issued share capital during the six months ended June 30, 2021 
  

	 	a)	 On February 23, 2021, the Company issued 139,676 common shares with a fair value of $790,566 pursuant to a share
purchase agreement to acquire TCN (Note 9). 


  

	 	b)	 On March 11, 2021, the Company issued 62,329 common shares with a fair value of $365,871 pursuant to a share
purchase agreement to acquire Lloyd-James (Note 9). 


  

	 	c)	 During the six months ended June 30, 2021, the Company issued a total of 82,500 common shares pursuant to the
exercise of stock options at $0.25 per share and 16,667 common shares pursuant to the exercise of stock options at $1.74 per share for aggregate gross proceeds of $49,625. During the six months ended June 30, 2021, the Company received $6,250
related to a stock option exercise which occurred during the year ended December 31, 2020. 


  

	 	d)	 During the six months ended June 30, 2021, the Company issued a total of 365,483 common shares and 273,867 units
pursuant to the exercise of warrants with exercise prices ranging between $1.30 per share and $4.50 per share for gross proceeds of $2,227,583, of which $6,000 was receivable at June 30, 2021, and $19,500 was received as at December 31,
2020. Each unit consisted of one common share and one-half of one warrant with exercise prices ranging between $2.00 and $4.50 with terms ranging between February 7, 2022, and June 4, 2022. During
the six months ended June 30, 2021, the Company received $5,000 related to a warrant exercise which occurred during the year ended December 31, 2020. 



 

	 	e)	 During the six months ended June 30, 2021, the Company issued a total of 42,694 common shares for marketing
services with a fair value of $227,471. 


  

	 	f)	 During the six months ended June 30, 2021, the Company received subscriptions of $28,999 pursuant to a subsequent
exercise of stock options (Note 26). 


  

	15.	 Warrants 



The following table summarizes information about the warrants at June 30, 2021, and the changes for the period then ended: 

 

									
	 	  	Number of warrants	 	  	Weighted average
exercise price	 
	 Warrants outstanding, December 31, 2020
	  	 	2,889,367	 	  	$	3.70	 
	 Issued
	  	 	361,934	 	  	 	5.08	 
	 Exercised
	  	 	(639,350	) 	  	 	3.39	 
		  	  
	  
	 	  	  
	  
	 
	 Warrants outstanding, June 30, 2021
	  	 	2,611,951	 	  	$	3.94	 
		  	  
	  
	 	  	  
	  
	 


  
 17 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	15.	 Warrants (continued) 



 

 The Company’s warrants are exercisable only for common shares, unless otherwise
noted. The following table summarizes information about warrants outstanding and exercisable at June 30, 2021: 
  

													
	 Exercise price
	  	Expiry date	 	  	Warrants
outstanding	 	 	Weighted average
remaining contracted life
(years)	 
	 $ 1.60
	  	 	August 13, 2021	 	  	 	45,000	 	 	 	0.12	 
	 $ 1.51
	  	 	October 6, 2021	 	  	 	60,000	 	 	 	0.27	 
	 $ 7.60
	  	 	December 21, 2021	 	  	 	60,000	 	 	 	0.48	 
	 $ 1.30
	  	 	February 7, 2022	 	  	 	12,862	* 	 	 	0.61	 
	 $ 2.00
	  	 	February 7, 2022	 	  	 	554,783	 	 	 	0.61	 
	 $ 2.00
	  	 	February 13, 2022	 	  	 	44,232	 	 	 	0.62	 
	 $ 3.50
	  	 	June 4, 2022	 	  	 	57,441	** 	 	 	0.93	 
	 $ 4.50
	  	 	June 4, 2022	 	  	 	1,552,633	 	 	 	0.93	 
	 $ 5.62
	  	 	June 7, 2026	 	  	 	225,000	 	 	 	4.94	 
		  				  	  
	  
	 	 			
		  				  	 	2,611,951	 	 			
		  				  	  
	  
	 	 			

  

	*	 Exercisable to acquire one unit at $1.30 per unit until February 7, 2022. Each unit consists of one common share
and one-half of one warrant, with each whole warrant exercisable at $2.00 until February 7, 2022. 



	**	 Exercisable to acquire one unit at $3.50 per unit until June 4, 2022. Each unit consists of one common share and one-half of one warrant, with each whole warrant exercisable at $4.50 until June 4, 2022. 


  

	16.	 Stock options 



Pursuant to the Company’s stock incentive plan, the Board of Directors is authorized to grant options to directors, officers,
consultants or employees to acquire up to 10% of the issued and outstanding common shares of the Company. The exercise price will not be less than $0.10 per share and the market price of the common shares on the trading day immediately preceding the
date of the grant, less applicable discounts permitted by the TSX-V. The options that may be granted under this plan must be exercisable for over a period of not exceeding 5 years. 

The following table summarizes the continuity of the Company’s stock options at June 30, 2021, and the changes for the period
then ended: 
  

									
	 	  	Number of options	 	  	Weighted average
exercise price	 
	 Outstanding, December 31, 2020
	  	 	3,852,639	 	  	$	1.39	 
	 Granted
	  	 	4,580,000	 	  	 	6.81	 
	 Exercised
	  	 	(99,167	) 	  	 	0.50	 
	 Cancelled or forfeited
	  	 	(260,000	) 	  	 	2.81	 
		  	  
	  
	 	  	  
	  
	 
	 Outstanding, June 30, 2021
	  	 	8,073,472	 	  	$	4.43	 
		  	  
	  
	 	  	  
	  
	 
	 Exercisable, June 30, 2021
	  	 	4,075,436	 	  	$	2.15	 
		  	  
	  
	 	  	  
	  
	 

 The options granted during the six months ended June 30, 2021, generally vest in 3 to 4 equal
instalments over vesting periods ranging between 12 months and 18 months. 
 The weighted average share price at the date of exercise
for share options exercised during the six months ended June 30, 2021, was $6.60. 

  
 18 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	16.	 Stock options (continued) 



 

 Additional information regarding stock options outstanding as at June 30, 2021, is
as follows: 
  

													
	 Exercise price
	  	Stock options
outstanding*	 	  	Stock options exercisable	 	  	Expiry date	 
	 $ 9.07
	  	 	5,000	 	  	 	2,500	 	  	 	December 7, 2023	 
	 $ 6.21
	  	 	390,000	 	  	 	—  	 	  	 	January 4, 2024	 
	 $ 7.10
	  	 	60,000	 	  	 	—  	 	  	 	January 26, 2024	 
	 $ 7.03
	  	 	870,000	 	  	 	25,000	 	  	 	January 29, 2024	 
	 $ 6.73
	  	 	75,000	 	  	 	—  	 	  	 	February 16, 2024	 
	 $ 5.72
	  	 	35,000	 	  	 	6,250	 	  	 	March 8, 2024	 
	 $ 0.25
	  	 	1,006,500	 	  	 	1,006,500	 	  	 	December 31, 2024	 
	 $ 0.25
	  	 	1,262,500	 	  	 	1,262,500	 	  	 	January 1, 2025	 
	 $ 0.25
	  	 	85,000	 	  	 	85,000	 	  	 	June 17, 2025	 
	 $ 1.31
	  	 	110,000	 	  	 	110,000	 	  	 	June 24, 2025	 
	 $ 1.56
	  	 	50,000	 	  	 	50,000	 	  	 	August 7, 2025	 
	 $ 1.65
	  	 	30,000	 	  	 	30,000	 	  	 	September 4, 2025	 
	 $ 1.70
	  	 	5,506	 	  	 	2,753	 	  	 	September 17, 2025	 
	 $ 1.68
	  	 	250,000	 	  	 	166,667	 	  	 	September 21, 2025	 
	 $ 1.60
	  	 	100,000	 	  	 	100,000	 	  	 	October 7, 2025	 
	 $ 1.74
	  	 	16,666	 	  	 	16,666	 	  	 	October 13, 2025	 
	 $ 4.65
	  	 	522,300	 	  	 	361,600	 	  	 	November 24, 2025	 
	 $ 8.86
	  	 	150,000	 	  	 	75,000	 	  	 	December 5, 2025	 
	 $ 7.03
	  	 	2,300,000	 	  	 	25,000	 	  	 	January 29, 2026	 
	 $ 6.21
	  	 	750,000	 	  	 	750,000	 	  	 	March 4, 2026	 
		  	  
	  
	 	  	  
	  
	 	  			
		  	 	8,073,472	 	  	 	4,075,436	 	  			
		  	  
	  
	 	  	  
	  
	 	  			

  

	*	 The weighted average remaining life of options outstanding is 3.80 years. 



Share-based compensation expense is determined using the Black-Scholes option pricing model. During the six months ended June 30,
2021, the Company recognized share-based compensation expense of $14,609,998 (2020 – $450,011) in equity reserves, of which $8,086,241 (2020 – $292,285) pertains to directors and officers of the Company. The weighted average fair value of
options granted during the six months ended June 30, 2021, was $4.93 (2020 – $0.19) per share. Weighted average assumptions used in calculating the fair value of share-based compensation expense are as follows: 

 

									
	 	  	Six months ended June 30,	 
	 	  	2021	 	 	2020	 
	 Risk-free interest rate
	  	 	0.38	% 	 	 	1.49	% 
	 Dividend yield
	  	 	0	% 	 	 	0	% 
	 Expected volatility
	  	 	118	% 	 	 	150	% 
	 Expected life (years)
	  	 	4.3	 	 	 	5.0	 
	 Forfeiture rate
	  	 	0	% 	 	 	0	% 

 Expected annualized volatility was determined through the comparison of historical share price
volatilities used by similar publicly listed companies in similar industries. 
 At June 30, 2021, there was $10,091,292 (December
31, 2020 – $2,519,228) of unrecognized share-based compensation related to unvested stock options. 

  
 19 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	17.	 Finance expense 



Finance expense is comprised of the following: 
  

																	
	 	  	Three months ended June 30,	 	  	Six months ended
June 30,	 
	 	  	2021	 	  	2020	 	  	2021	 	  	2020	 
	 Interest on finance lease obligations (Note 11)
	  	$	284,549	 	  	$	10,959	 	  	$	646,299	 	  	$	21,902	 
	 Interest and accretion on loans and other liabilities
	  	 	128,112	 	  	 	13,430	 	  	 	128,112	 	  	 	26,667	 
	 Interest and accretion on convertible debentures
	  	 	—  	 	  	 	57,632	 	  	 	—  	 	  	 	86,957	 
	 Interest and accretion on related party loan
	  	 	—  	 	  	 	7,325	 	  	 	—  	 	  	 	11,728	 
	 Finance cost on settlement of convertible debt
	  	 	—  	 	  	 	765,000	 	  	 	—  	 	  	 	765,000	 
	 Other interest
	  	 	16	 	  	 	—  	 	  	 	536	 	  	 	79	 
	 Interest and other income
	  	 	(6,730	) 	  	 	—  	 	  	 	(11,970	) 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	$	405,947	 	  	$	854,346	 	  	$	762,977	 	  	$	912,333	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	18.	 Other expense 



Other expense is comprised of the following: 
  

																	
	 	  	Three months ended June 30,	 	  	Six months ended June 30,	 
	 	  	2021	 	  	2020	 	  	2021	 	  	2020	 
	 Pre-construction costs*
	  	$	36,325	 	  	$	17,266	 	  	$	147,283	 	  	$	20,766	 
	 Loss on disposal of equipment
	  	 	2,679	 	  	 	—  	 	  	 	22,561	 	  	 	—  	 
	 Acquisition-related costs
	  	 	101,138	 	  	 	—  	 	  	 	277,329	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	$	140,142	 	  	$	17,266	 	  	$	447,173	 	  	$	20,766	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	*	 Pre-construction costs consist of conceptual design and preliminary
engineering expenditures incurred on building-out its Mount Pleasant facility (Note 23(e)) and Rupert facility (Note 23(j)). These costs did not meet the capitalization criteria as set out in IAS 16,
Property, Plant and Equipment. 


  

	19.	 Supplemental cash flow disclosures 



 

									
	 	  	For the six months ended June 30,	 
	 	  	2021	 	  	2020	 
	 Fair value of Agent’s Warrants and corporate finance fee warrants
	  	$	 —  	 	  	$	 176,242	 
	 Fair value of warrants issued in connection with Loan Agreement
	  	 	752,559	 	  	 	—  	 
	 Finance fee included in accounts payable and accrued liabilities
	  	 	1,904,762	 	  	 	—  	 
	 Issuance of common shares for acquisitions
	  	 	1,156,437	 	  	 	—  	 
	 Issuance of common shares pursuant to the conversion of convertible debentures
	  	 	—  	 	  	 	1,873,222	 
	 Lease liabilities assumed from acquisition
	  	 	(127,543	) 	  	 	—  	 
	 ROU assets acquired through leases
	  	 	12,434,623	 	  	 	2,034,887	 
	 ROU assets acquired through acquisition
	  	 	127,043	 	  	 	—  	 
	 Property and equipment purchases included in accounts payable and accrued liabilities
	  	 	1,723,575	 	  	 	—  	 


  
 20 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	20.	 Financial instruments and financial risk management 



Fair value measurements 
 At
June 30, 2021, the carrying value of the Company’s cash and cash equivalents, accounts receivable, deposits, accounts payable and accrued liabilities, and loans payable and other liabilities, all of which are carried at amortized cost,
approximate their fair value given their short-term nature or discount rate applied. 
 The Company does not have any financial
instruments measured at fair value in the condensed interim consolidated statement of financial position, except for its contingent consideration, which was estimated at fair value as part of the preliminary purchase price allocations in note 9 and
for which there has been no change in fair value to June 30, 2021. 
 Financial risk management 

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and
monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows: 

The following is an analysis of the contractual maturities of the Company’s non-derivative
financial liabilities as at June 30, 2021 and December 31, 2020: 
  

													
	 June 30, 2021
	  	Within 1 year	 	  	Between 1-5
years	 	  	More than 5
years	 
	 Accounts payable and accrued liabilities
	  	$	6,834,050	 	  	$	 —  	 	  	$	—  	 
	 Loans payable and other liabilities
	  	 	1,564,546	 	  	 	2,412,227	 	  	 	—  	 
	 Contingent consideration on acquisitions
	  	 	1,048,000	 	  	 	—  	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	$	9,446,596	 	  	$	2,412,227	 	  	$	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

													
	 December 31, 2020
	  	Within 1 year	 	  	Between 1-5
years	 	  	More than 5
years	 
	 Accounts payable and accrued liabilities
	  	$	1,871,728	 	  	$	 —  	 	  	$	—  	 
	 Loans payable
	  	 	—  	 	  	 	30,000	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	$	1,871,728	 	  	$	30,000	 	  	$	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Interest risk

The Company’s exposure to interest risk relates to its investment of surplus cash and cash equivalents, including restricted and
unrestricted short-term investments. The Company may invest surplus cash in highly liquid investments with short terms to maturity and would accumulate interest at prevailing rates for such investments. At June 30, 2021, the Company had cash
and cash equivalents of $5,926,067 (December 31, 2020 - $25,084,083) and a 1% change in interest rates would increase or decrease interest income by approximately $60,000 (December 31, 2020 - $250,000).

Credit risk 
 Credit risk is
the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist
primarily of cash and cash equivalents, security deposits and receivables. The carrying amount of cash and cash equivalents, security deposits, and trade and other receivables represent the maximum exposure to credit risk, and as at June 30,
2021, this amounted to $11,989,265 (December 31, 2020 - $26,826,938). 

  
 21 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	20.	 Financial instruments and financial risk management (continued) 



 

 The Company’s cash and cash equivalents are held through large Canadian financial
institutions and no losses have been incurred in relation to these items. The Company’s receivables are comprised of trade accounts receivable and GST receivable. At June 30, 2021, the Company has $53,974 (December 31, 2020 – $43,153)
in trade accounts receivable outstanding over 60 days, of which the Company has recognized an allowance for doubtful accounts of $28,757 (December 31, 2020 – $39,917). 

Concentration of credit risk

Concentration of credit risk is the risk of reliance upon a select number of customers which significantly impact the financial
performance of the Company. The Company recorded sales from 3 wholesale distributors of the Company representing 12% (2020 – 22%) of total revenue during the six months ended June 30, 2021. Of the Company’s trade receivables
outstanding at June 30, 2021 and December 31, 2020, 72% and 81% are held with 4 customers and 3 customers of the Company, respectively. 

Liquidity risk 
 Liquidity
risk is the risk that the Company will not be able to pay financial instrument liabilities as they come due. The Company manages its liquidity risk by reviewing on an ongoing basis its capital requirements. As at June 30, 2021, the Company has
$5,926,067 (December 31, 2020 – $25,084,083) of cash and cash equivalents. The Company is obligated to pay accounts payable and accrued liabilities, the current portion of the lease liabilities, and the current portion of loans payable and
other liabilities with a carrying amount of $9,192,029 (December 31, 2020 – $2,018,663) and contingent consideration of $1,048,000 within the next year (see also note 1).

Foreign Currency Risk
 The
Company is exposed to foreign currency risk on fluctuations related to cash, accounts payable and accrued liabilities, and deferred revenue that are denominated in US dollars. As at June 30, 2021, a 10% appreciation of the Canadian dollar
relative to the US dollar would have increased net financial assets by approximately $177,000 (December 31, 2020 – $102,312). A 10% depreciation of the Canadian dollar relative to the US dollar would have had the equal but opposite effect.

Price Risk
 The Company is
exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices
of raw materials to determine the appropriate course of action to be taken by the Company. 

  
 22 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	21.	 Employee benefit expense 



The breakdown of the wages and salaries costs within the condensed interim consolidated statements of net loss and comprehensive loss for
the six months ending June 30, 2021, and 2020, are as follows: 
  

																	
	 	  	Three months ended June 30,	 	  	Six months ended June 30,	 
	 	  	2021	 	  	2020	 	  	2021	 	  	2020	 
	 Included in procurement expense
	  				  				  				  			
	 Wages and salaries
	  	$	 667,604	 	  	$	170,270	 	  	$	 1,309,290	 	  	$	282,956	 
	 Share-based compensation
	  	 	284,147	 	  	 	—  	 	  	 	542,696	 	  	 	14,246	 
	 Included in fulfilment expense
	  				  				  				  			
	 Wages and salaries
	  	 	247,579	 	  	 	11,489	 	  	 	454,766	 	  	 	24,893	 
	 Share-based compensation
	  	 	356,871	 	  	 	—  	 	  	 	752,703	 	  	 	—  	 
	 Included in general and administrative expense
	  				  				  				  			
	 Wages and salaries
	  	 	902,857	 	  	 	131,706	 	  	 	1,883,334	 	  	 	253,773	 
	 Share-based compensation
	  	 	4,546,887	 	  	 	172,083	 	  	 	11,887,846	 	  	 	412,405	 
	 Included in marketing and investor relations expense
	  				  				  				  			
	 Wages and salaries
	  	 	157,796	 	  	 	—  	 	  	 	283,996	 	  	 	—  	 
	 Share-based compensation
	  	 	272,907	 	  	 	—  	 	  	 	561,106	 	  	 	3,982	 
	 Included in research and development expense
	  				  				  				  			
	 Wages and salaries
	  	 	182,869	 	  	 	45,786	 	  	 	334,402	 	  	 	103,897	 
	 Share-based compensation
	  	 	237,072	 	  	 	—  	 	  	 	427,864	 	  	 	19,378	 
	 Included in pre-production expense
	  				  				  				  			
	 Wages and salaries
	  	 	203,635	 	  	 	—  	 	  	 	449,429	 	  	 	—  	 
	 Share-based compensation
	  	 	138,106	 	  	 	—  	 	  	 	437,783	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total employee benefit expense
	  	$	8,198,330	 	  	$	531,334	 	  	$	19,325,215	 	  	$	1,115,530	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	22.	 Capital management 



The Company’s primary objectives when managing capital is to maintain a capital structure that allows financing options to the
Company in order to benefit from potential opportunities as they arise. The Company manages its capital structure and adjusts it based on the funds available to the Company in order to maintain existing operations and fund expansion opportunities.
The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. 

The Company is continually evaluating expansion opportunities both domestically and within certain international markets. Depending on
the timing and scope of expansion opportunities identified by the Company, there will be a requirement for the investment of additional capital for the Company to continue to successfully execute on its growth strategy. Based on the ongoing analysis
of potential growth opportunities, the Company is not able to currently quantify any specific non-committed future capital requirements. The Company has historically relied on debt and more recently the equity
markets to fund its activities. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable to ensure optimal capital structure to reduce cost of
capital. 

  
 23 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	23.	 Commitments 



Finance leases 
  

	 	a)	 On December 22, 2017, the Company entered into a lease agreement for retail and storage space located at 6-1701 Douglas Street, Victoria, BC. The lease is for a 5-year term, commencing on August 1, 2017 and expiring on July 31, 2022. The base rent due under the lease
agreement is $1,252 per month during the first year and increases each subsequent year. For years 2-5, the monthly rent payable is equal to the current monthly minimum rent multiplied by the annual increase of
the Consumer Price Index (“CPI”) for the current lease year just ended over the previous lease year. CPI is defined as the consumer price index for the Greater Victoria Area issued by any bureau of statistics for the Government of
Canada. The Company will also pay additional rent equivalent to 4% of the Company’s gross retail sales, excluding sales from wholesale orders, in excess of $2,000,000 per annum. 



 

	 	b)	 On January 1, 2019, the Company entered into a sub-lease agreement for
kitchen and retail space located at 2527 Government Street, Victoria, BC. The lease is for a 4.5-year term, expiring on June 30, 2023. The remaining base rent due under the
sub-lease agreement is $3,950 per month for the period from January 1 to June 30, 2019, $4,350 per month for the period from July 1, 2019 to June 30, 2020, $4,600 per month for the period
from July 1, 2020 to June 30, 2021, $4,800 per month for the period from July 1, 2021 to June 30, 2022, and $5,050 per month for the period from July 1, 2022 to June 30, 2023. 



Also, in relation to the January 1, 2019 sub-lease agreement, the Company entered into a
rental agreement for the use of fixtures and equipment located at 2527 Government Street, Victoria, BC. The lease is for a 4.5-year term, expiring on June 30, 2023. The remaining rent due under the rental
agreement is $250 per month for the period from January 1, 2019 to June 30, 2020, $300 per month for the period from July 1, 2020 to June 30, 2021, and $350 per month for the period from July 1, 2021 to June 30, 2023.

  

	 	c)	 On January 9, 2019, the Company entered into a lease agreement for restaurant production equipment. The lease is
for a 3-year term, expiring on January 9, 2022. The Company is required to make 36 monthly payments of $1,858. At the expiration of the lease, the Company shall have the option to purchase the equipment
for $10. 


  

	 	d)	 On January 9, 2019, the Company entered into a lease agreement for restaurant production equipment. The lease is
for a 3-year term, expiring on January 9, 2022. The Company is required to make 36 monthly payments of $2,232. 


  

	 	e)	 On January 22, 2020, the Company entered into a lease agreement for a facility located in the Mount Pleasant area
of Vancouver, BC, which commenced September 1, 2020 for a 10-year term. The facility will house the Company’s second restaurant, along with space for research and development, and offices. Pursuant
to the lease agreement, the annual base rent is $332,832 per annum for years 1-3, $348,434 per annum for years 4-6, and $369,236 per annum for years 7-10. The Company paid a security deposit of $246,237, which will be applied towards the rent due for each of the 3rd, 13th, and 25th months of the term, with the balance being held as a security deposit. As at
June 30, 2021, a balance of $232,242 (December 31, 2020 – $232,242) is included in prepaids and deposits. Of this amount, $43,502 is presented as a current asset and the remaining balance as a
non-current asset. The lease agreement includes an option to renew for two consecutive five-year periods. 


  

	 	f)	 On April 8, 2020, the Company entered into a lease agreement for storage space located in Victoria, BC. The lease
is for 2 years and 16 days, commencing on April 15, 2020 and expiring on April 30, 2022. The base rent due under the lease agreement is $1,445 per month during the first year and $1,576 per month during the second year.




  
 24 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	23.	 Commitments (continued) 



 


	 	g)	 On June 4, 2020, the Company entered into agreements for the purchase of production equipment. Pursuant to the
purchase agreements, the Company was required to pay 30% deposit of the purchase price totaling $454,848, and the balance is due in 60 equal payments totaling $19,974 per month at an annual interest rate of 5%, starting from the date of the
delivery. As at December 31, 2020, the equipment had not been delivered and the deposits of $454,848 were included in prepaids and deposits. During the six months ended June 30, 2021, the equipment was delivered and the deposits were
applied against the acquisition of the right-of-use assets. 


  

	 	h)	 On August 31, 2020, the Company entered into a lease agreement for a production and distribution facility located
in Patterson, California, which commenced on September 1, 2020. The term of this lease is for 5 years and 7 months, expiring on February 28, 2026, with 2 options to extend the term of the lease, each for an additional term of 5 years.
Pursuant to the lease agreement, the annual base rent is US$24,743 per month starting April 1, 2021 and no rent is required for the period from September 1, 2020 to June 30, 2021. The base rent is to be adjusted by 3% on the 1st of
April of each year commencing from April 1, 2021. The Company paid a security deposit of US$321,659. As at June 30, 2021, a balance of $368,384 (US$296,916) (December 31, 2020 – $410,189 (US$321,659)) is included in prepaids and
deposits as a non-current asset. 


  

	 	i)	 On September 22, 2020, the Company entered into a lease agreement for a facility located in Victoria, BC, which
commenced January 1, 2021 for a 10-year term. The facility will house the Company’s third restaurant. Pursuant to the lease agreement, the annual base rent is $44,975 per annum for years 1-2, $47,545 per annum for years 3-4, $50,115 per annum for years 5-6, $51,400 per annum for years
7-8, and $52,685 per annum for year 9-10. The lease agreement includes an option to renew for two consecutive five-year periods. The Company paid a security deposit of
$12,256. As at June 30, 2021, a balance of $12,256 (December 31, 2020 – $12,256) is included in prepaids and deposits. Of this amount, $11,356 is presented as a current asset and the remaining balance as a
non-current asset. 


  

	 	j)	 On November 11, 2020, the Company entered into a lease agreement for the Rupert facility located in Vancouver,
BC, for an initial 10-year term with renewal options for two additional 5-year terms. The facility comprises several units of approximately 45,000 square feet of
production, refrigeration, warehousing, R&D and office space. Pursuant to the agreement, the lease commences June 1, 2021 with early possession permitted between January 11, 2021 and March 1, 2021. The annual base rent is $870,061
per annum for years 1 to 2, $948,546 per annum for years 3 to 4, $993,875 per annum in years 5 to 7, $1,039,204 per annum in years 8 to 9, and $1,084,533 per annum in year 10. The Company paid a security deposit of $222,249. As at June 30,
2021, a balance of $222,249 (December 31, 2020 – $222,249) is included in prepaids and deposits. Of this amount, $110,713 is presented as a current asset and the remaining balance as a non-current asset.



  

	 	k)	 On January 19, 2021, the Company entered into agreement for the purchase of production equipment. Pursuant to the
purchase agreement, the Company is required to pay 30% deposit of the purchase price totaling $48,913, and the balance is due in 60 equal payments totaling $2,148 per month at an annual interest rate of 5%, starting from the date of the delivery. As
of June 30, 2021, the equipment has not been delivered and the deposit of $48,913 is included in prepaids and deposits. 


  

	 	l)	 On January 20, 2021, the Company entered into an agreement for the lease of production equipment. Pursuant to the
agreement, the Company is required to pay 20% deposit of the purchase price totaling $196,514, and the balance is due in 36 equal payments totaling $22,845 per month at an annual interest rate of 3%, starting from the date of the delivery. As of
June 30, 2021, the equipment has not been delivered and the deposit of $196,514 is included in prepaids and deposits. 



  
 25 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	23.	 Commitments (continued) 



 


	 	m)	 On January 20, 2021, the Company entered into an agreement for the purchase of production equipment. Pursuant to
the agreement, the Company is required to pay a total of $800,565, of which $160,113 was paid as a deposit, and the balance of $640,452 is due when installation is complete. As of June 30, 2021, the equipment has not been delivered and the
deposit of $160,113 is included in prepaids and deposits. 


  

	 	n)	 On February 1, 2021, the Company entered into a lease agreement for a warehouse facility located in Victoria, BC.
The lease is for a 5-year term commencing February 1, 2021 and expiring on January 31, 2026. The facility comprises approximately 6,288 square feet of warehousing space. Pursuant to the lease
agreement, the annual base rent is $94,320 per annum for years 1-2, and $100,608 per annum for years 3-5. The Company paid a security deposit of $63,823, which is
included in prepaids and deposits as a non-current asset. 


  

	 	o)	 On March 16, 2021, the Company entered into agreement for the purchase of production equipment. Pursuant to the
purchase agreement, the Company is required to pay 40% deposit of the purchase price totalling $710,000, 50% of the purchase price totalling $887,500 prior to shipment and 10% of the purchase price totalling $177,500 upon installation. As of
June 30, 2021, the equipment has not been delivered and the deposit of $1,597,500 is included in prepaids and deposits. 


  

	 	p)	 On May 18, 2021, the Company entered into agreement for the purchase of production equipment. Pursuant to the
purchase agreement, the Company is required to pay 40% deposit of the purchase price totalling $85,440, 40% of the purchase price totalling $85,440 upon completion of design, 10% of the purchase price totalling $21,360 prior to shipment and 10% of
the purchase price totalling $21,360 upon completion acceptance. As of June 30, 2021, the equipment has not been delivered and the deposit of $85,440 is included in prepaids and deposits. 



 

	 	q)	 On June 1, 2021, the Company entered into agreement for the purchase of production equipment. Pursuant to the
purchase agreement, the Company is required to pay 40% deposit of the purchase price totalling $167,799, 50% of the purchase price totalling $209,737 prior to shipment and 10% of the purchase price totalling $41,947 upon installation. As of
June 30, 2021, the equipment has not been delivered and the deposit of $167,799 is included in prepaids and deposits. 



Operating leases 
 As at
June 30, 2021, the Company did not have any future payments required under non-cancellable operating leases contracted for but not capitalized in the financial statements. 

  
 26 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	24.	 Segmented Information 



The Company’s chief operating decision makers currently review the operating results of the Company as a single reportable operating
segment – being the manufacture and distribution of vegan meat and cheese alternatives. The Company operates in two geographic regions: Canada and the United States. The following is a summary of the Company’s activities by geographic
region as at June 30, 2021, and December 31, 2020: 
  

													
	 	  	Canada	 	  	United States	 	  	Total	 
	 Total non-current assets as at June 30, 2021
	  	$	29,707,282	 	  	$	2,996,346	 	  	$	32,703,628	 
	 Total non-current assets as at December 31, 2020
	  	$	 3,407,364	 	  	$	3,158,997	 	  	$	 6,566,361	 
	 Revenues for the three months ended June 30, 2021
	  	$	 1,559,674	 	  	$	1,221,007	 	  	$	 2,780,681	 
	 Revenues for the three months ended June 30, 2020
	  	$	 1,087,790	 	  	$	 —  	 	  	$	 1,087,790	 
	 Revenues for the six months ended June 30, 2021
	  	$	 2,917,033	 	  	$	2,506,731	 	  	$	 5,423,764	 
	 Revenues for the six months ended June 30, 2020
	  	$	 1,426,342	 	  	$	 —  	 	  	$	 1,426,342	 

  

	25.	 Change in Presentation of Expenditures and Restatement 



Effective for the year ended December 31, 2020, the Company elected to change the presentation of its consolidated statements of net
loss and comprehensive loss. The Company believes that the revised presentation provides more useful and relevant financial information to users of the consolidated financial statements. Management has applied the change in presentation
retrospectively. The consolidated statement of net loss and comprehensive loss for the three and six months ended June 30, 2020, has been reclassified to conform with the presentation used in the current period. 

In addition, for the period ended the June 30, 2020, the consolidated statements of net loss and comprehensive loss, changes in
equity and cash flows have been restated to reflect an adjustment made at December 31, 2020, to record a finance expense of $765,000 related to the conversion of the Company’s convertible debentures in June 2020. The impact of the
restatement on the consolidated statement of changes in equity during the six months ended June 30, 2020, was an increase in share capital and deficit of $765,000, and the impact on the consolidated statement of cash flows was an increase in
the adjustments for non-cash items related to finance expenses of $765,000. 

  
 27 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	25.	 Change in Presentation of Expenditures and Restatement (continued) 



 

 The following is a summary of the impacts to the consolidated statement net loss and
comprehensive loss for the three months ended June 30, 2020: 
  

																	
	 Consolidated Statement of Net Loss and Comprehensive
Loss
	  	June 30, 2020
(As previously
reported)	 	  	Functional
presentation
reclassifications	 	  	Finance
expense
restatement	 	  	June 30, 2020
(As restated)	 
	 Revenues
	  	$	1,100,816	 	  	$	(13,026	) 	  	$	 —  	 	  	$	1,087,790	 
	 Costs of sales
	  	 	(537,738	) 	  	 	537,738	 	  	 	—  	 	  	 	—  	 
	 Procurement expense
	  	 	—  	 	  	 	(690,795	) 	  	 	—  	 	  	 	(690,795	) 
	 Fulfilment expense
	  	 	—  	 	  	 	(415,134	) 	  	 	—  	 	  	 	(415,134	) 
	 Advertising and promotion
	  	 	(463,780	) 	  	 	463,780	 	  	 	—  	 	  	 	—  	 
	 Bank charges
	  	 	(691	) 	  	 	691	 	  	 	—  	 	  	 	—  	 
	 Bad debt expense
	  	 	(1,800	) 	  	 	1,800	 	  	 	—  	 	  	 	—  	 
	 Corporate communication
	  	 	(126,800	) 	  	 	126,800	 	  	 	—  	 	  	 	—  	 
	 Depreciation
	  	 	(104,089	) 	  	 	104,089	 	  	 	—  	 	  	 	—  	 
	 Insurance
	  	 	(5,614	) 	  	 	5,614	 	  	 	—  	 	  	 	—  	 
	 Investor relations
	  	 	(162,677	) 	  	 	162,677	 	  	 	—  	 	  	 	—  	 
	 Meals and entertainment
	  	 	(3,123	) 	  	 	3,123	 	  	 	—  	 	  	 	—  	 
	 Office and administration
	  	 	(96,569	) 	  	 	96,569	 	  	 	—  	 	  	 	—  	 
	 Professional fees
	  	 	(285,519	) 	  	 	285,519	 	  	 	—  	 	  	 	—  	 
	 Rent
	  	 	(12,091	) 	  	 	12,091	 	  	 	—  	 	  	 	—  	 
	 Repairs and maintenance
	  	 	(25,628	) 	  	 	25,628	 	  	 	—  	 	  	 	—  	 
	 Research and development
	  	 	(48,830	) 	  	 	48,830	 	  	 	—  	 	  	 	—  	 
	 Selling costs
	  	 	(296,168	) 	  	 	296,168	 	  	 	—  	 	  	 	—  	 
	 Share-based compensation
	  	 	(172,083	) 	  	 	172,083	 	  	 	—  	 	  	 	—  	 
	 Small tools and supplies
	  	 	(163,856	) 	  	 	163,856	 	  	 	—  	 	  	 	—  	 
	 Telephone and utilities
	  	 	(8,377	) 	  	 	8,377	 	  	 	—  	 	  	 	—  	 
	 Travel
	  	 	(13,249	) 	  	 	13,249	 	  	 	—  	 	  	 	—  	 
	 Wages and benefits
	  	 	(136,443	) 	  	 	136,443	 	  	 	—  	 	  	 	—  	 
	 General and administrative expense
	  	 	—  	 	  	 	(723,599	) 	  	 	—  	 	  	 	(723,599	) 
	 Marketing and investor relations expense
	  	 	—  	 	  	 	(740,231	) 	  	 	—  	 	  	 	(740,231	) 
	 Research and development expense
	  	 	—  	 	  	 	(65,074	) 	  	 	—  	 	  	 	(65,074	) 
	 Financing expense
	  	 	(89,346	) 	  	 	—  	 	  	 	(765,000	) 	  	 	(854,346	) 
	 Other expense
	  	 	—  	 	  	 	(17,266	) 	  	 	—  	 	  	 	(17,266	) 


  
 28 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  

	25.	 Change in Presentation of Expenditures and Restatement (continued) 



 

 The following is a summary of the impacts to the consolidated statement net loss and
comprehensive loss for the six months ended June 30, 2020: 
  

																	
	 Consolidated Statement of Net Loss and Comprehensive
Loss
	  	June 30, 2020
(As previously
reported)	 	  	Functional
presentation
reclassifications	 	  	Finance
expense
restatement	 	  	June 30, 2020
(As restated)	 
	 Revenues
	  	$	1,439,368	 	  	$	(13,026	) 	  	$	 —  	 	  	$	1,426,342	 
	 Costs of sales
	  	 	(834,641	) 	  	 	834,641	 	  	 	—  	 	  	 	—  	 
	 Procurement expense
	  	 	—  	 	  	 	(1,147,847	) 	  	 	—  	 	  	 	(1,147,847	) 
	 Fulfilment expense
	  	 	—  	 	  	 	(491,593	) 	  	 	—  	 	  	 	(491,593	) 
	 Advertising and promotion
	  	 	(619,872	) 	  	 	619,872	 	  	 	—  	 	  	 	—  	 
	 Bank charges
	  	 	(2,426	) 	  	 	2,426	 	  	 	—  	 	  	 	—  	 
	 Bad debt expense
	  	 	(5,294	) 	  	 	5,294	 	  	 	—  	 	  	 	—  	 
	 Corporate communication
	  	 	(126,800	) 	  	 	126,800	 	  	 	—  	 	  	 	—  	 
	 Depreciation
	  	 	(154,717	) 	  	 	154,717	 	  	 	—  	 	  	 	—  	 
	 Insurance
	  	 	(14,753	) 	  	 	14,753	 	  	 	—  	 	  	 	—  	 
	 Investor relations
	  	 	(162,677	) 	  	 	162,677	 	  	 	—  	 	  	 	—  	 
	 Meals and entertainment
	  	 	(6,929	) 	  	 	6,929	 	  	 	—  	 	  	 	—  	 
	 Office and administration
	  	 	(139,309	) 	  	 	139,309	 	  	 	—  	 	  	 	—  	 
	 Professional fees
	  	 	(504,349	) 	  	 	504,349	 	  	 	—  	 	  	 	—  	 
	 Rent
	  	 	(36,597	) 	  	 	36,597	 	  	 	—  	 	  	 	—  	 
	 Repairs and maintenance
	  	 	(37,370	) 	  	 	37,370	 	  	 	—  	 	  	 	—  	 
	 Research and development
	  	 	(110,956	) 	  	 	110,956	 	  	 	—  	 	  	 	—  	 
	 Selling costs
	  	 	(347,481	) 	  	 	347,481	 	  	 	—  	 	  	 	—  	 
	 Share-based compensation
	  	 	(450,011	) 	  	 	450,011	 	  	 	—  	 	  	 	—  	 
	 Small tools and supplies
	  	 	(197,803	) 	  	 	197,803	 	  	 	—  	 	  	 	—  	 
	 Telephone and utilities
	  	 	(16,281	) 	  	 	16,281	 	  	 	—  	 	  	 	—  	 
	 Travel
	  	 	(35,294	) 	  	 	35,294	 	  	 	—  	 	  	 	—  	 
	 Wages and benefits
	  	 	(272,116	) 	  	 	272,116	 	  	 	—  	 	  	 	—  	 
	 General and administrative expense
	  	 	—  	 	  	 	(1,335,815	) 	  	 	—  	 	  	 	(1,335,815	) 
	 Marketing and investor relations expense
	  	 	—  	 	  	 	(903,805	) 	  	 	—  	 	  	 	(903,805	) 
	 Research and development expense
	  	 	—  	 	  	 	(162,824	) 	  	 	—  	 	  	 	(162,824	) 
	 Financing expense
	  	 	(147,333	) 	  	 	—  	 	  	 	(765,000	) 	  	 	(912,333	) 
	 Other expense
	  	 	—  	 	  	 	(20,766	) 	  	 	—  	 	  	 	(20,766	) 


  
 29 














 The Very Good Food Company | Condensed interim consolidated financial statements 

For the Three and Six Months Ended June 30, 2021 and 2020 

(Unaudited) 
  


	26.	 Events after the reporting period 



 

	 	a)	 On July 2, 2021, the Company completed its bought deal prospectus offering (the “Offering”)
consisting of 5,594,750 units of the Company (the “Units”) at a price of $3.70 per Unit for total gross proceeds of $20,700,575. Each Unit consisted of one common share in the capital of the Company and
one-half of one common share purchase warrant (each whole warrant, a “Warrant”), with each Warrant entitling the holder to purchase one additional common share at a price of $4.60 per Warrant until
January 2, 2023. 


 The Company paid a commission of $1,449,040 and 391,633 compensation warrants of the Company
(the “Compensation Warrants”) being equal to 7% of the aggregate number of Units sold pursuant to the offering. Each Compensation Warrant entitles the holder to purchase one additional Unit of the Company (each a “Compensation
Unit”) at a price of $3.70 per Compensation Unit until January 2, 2023. In addition, the Company also paid a corporate finance fee comprised of 30,000 Units to the agent. 

 

	 	b)	 Subsequent to June 30, 2021, the Company issued a total of 109,400 common shares pursuant to the exercise of
warrants with exercise prices ranging between of $1.51 and $2.00 per share for gross proceeds of $171,400. 


  

	 	c)	 Subsequent to June 30, 2021, the Company issued a total of 86,166 common shares pursuant to the exercise of stock
options with exercise prices ranging between $0.25 and $1.74 per share for gross proceeds of $46,374, of which $28,999 was received as at June 30, 2021. 


  


	 	d)	 Subsequent to June 30, 2021, the Company granted a total of 685,625 stock options. The stock options granted have
an exercise price of $3.70 per share and expiry dates ranging between July 15, 2024, and July 15, 2026. 



  
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 The Very Good Food Company Inc. 2748 Rupert Street, Vancouver, BC, V5M 3T7 Canada 1.855.526.9254 hello@verygoodfood
213892-001 .com www.verygoodfood.com