Document:

EX-4.3

 Exhibit 4.3 
  

 
 The Very Good Food Company | 2020 Annual Report MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEARS ENDED DECEMBER 31, 2020
AND 2019 

 TABLE OF CONTENTS 
  

					
	 FORWARD-LOOKING INFORMATION
	  	 	2	 
		
	 2020 HIGHLIGHTS
	  	 	3	 
		
	 CORPORATE OVERVIEW
	  	 	5	 
		
	 OUR STRATEGIC PROGRESS
	  	 	8	 
		
	 OUTLOOK
	  	 	11	 
		
	 FINANCIAL PERFORMANCE REVIEW
	  	 	15	 
		
	 NON-GAAP FINANCIAL MEASURES
	  	 	16	 
		
	 QUARTERLY RESULTS
	  	 	23	 
		
	 CAPITAL MANAGEMENT
	  	 	24	 
		
	 RELATED PARTY TRANSACTIONS
	  	 	29	 
		
	 CRITICAL ACCOUNTING ESTIMATES
	  	 	30	 
		
	 RISKS AND UNCERTAINITIES
	  	 	31	 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 FORWARD-LOOKING INFORMATION 

The 2020 Annual Report of The Very Good Food Company Inc. (“VERY GOOD” or “the Company”), including this
management’s discussion and analysis (“MD&A”), contains “forward-looking information” within the meaning of applicable securities laws in Canada. Statements containing forward-looking information are not
historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. Any such forward-looking information may be identified by words such as “proposed”,
“expects”, “intends”, “may”, “will”, and similar expressions. 
 This forward-looking information includes,
but is not limited to, statements relating to: the impact of the COVID-19 pandemic (‘’COVID-19’’) and its impacts on VERY GOOD’s
business; the Company’s business strategy and growth plans; the Company’s capital expenditures and operations; anticipated production volume capacities of the production facilities; the Company’s ability to increase wholesale
distribution in Canada and in the United States (“US”); VERY GOOD’s acquisition strategy; plans for, and the timing of, the launch of The Very Good Cheese Co. brand in the second quarter of 2021 and the Company’s new
“Butcher’s Select” gluten-free line of products in the third quarter of 2021; expectations regarding the scaling of the Company’s retail network; the Company’s plans to obtain non-GMO
certification for its products and sustainability certifications and be both carbon and plastic neutral in the future, and the closing of the proposed credit facility financing. 

Forward-looking information is based on the Company’s opinions, estimates and assumptions in light of its experience and perception of historical
trends, current conditions and expected future developments, as well as other factors that the Company currently believes are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking
information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Certain assumptions in respect of the impact of COVID-19; no material deterioration in
general business and economic conditions; no material fluctuations of interest rates and foreign exchange rates; continued strong demand for VERY GOOD’s products; the construction, costs, schedules, approvals and anticipated benefits of planned
capital projects; the availability of sufficient financing on reasonable terms to fund capital requirements associated with existing operations and capital projects; the ability to obtain necessary equipment, production inputs and labour; the
ability to retain senior management and other key personnel; the competitive environment conditions; the execution of the Company’s business strategy and growth plans and the impact thereof; future performance including future financial
objectives are all material assumptions made in preparing forward-looking information and management’s expectations. 
 Forward-looking
information is based on a number of opinions, estimates and assumptions that we considered appropriate and reasonable as of the date such statements are made and is subject to known and unknown risks, uncertainties, assumptions and other factors
that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. These risks, uncertainties and other factors include, but are not
limited to, those set forth under the “Risks and Uncertainties” section of this MD&A. If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove
incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Accordingly, readers should not place undue reliance on forward-looking information. 

The forward-looking information contained in this MD&A represents the Company’s expectations as of April 26, 2021 and is subject to change
after such date. The Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities
laws in Canada. 

  
 2 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 BASIS OF PRESENTATION 

The following MD&A is intended to help the reader understand the financial condition and results of the operations of The Very Good Food Company Inc.
and constitutes management’s review of the factors that affected the Company’s financial and operating performance for the year ended December 31, 2020. This MD&A has been prepared in compliance with the requirements of National
Instrument 51-102 - Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited annual consolidated financial statements of the Company for the years ended
December 31, 2020 and 2019 together with the notes thereto, prepared in accordance with International Financial Reporting Standards (“IFRS”). The results for the year ended December 31, 2020 are not necessarily indicative
of the results that may be expected for any future period. 
 Some of the financial measures we provide in this MD&A are non-GAAP financial
measures that have no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. See “Non-GAAP Financial Measures”, starting on page 16, for more information on the Company’s
non-GAAP financial measures and reconciliations thereof. 
 All amounts in this MD&A are expressed in Canadian dollars, except where otherwise
indicated. All references to “we”, “us” or “our” refer to the Company, together with its subsidiaries, on a consolidated basis. The information contained in this MD&A, including forward-looking statements, is
current as of April 26, 2021 unless otherwise stated.
 Additional information regarding the Company is available on the SEDAR website for
Canadian regulatory filings at www.sedar.com, and on the Company’s website at www.verygoodfood.com. 
 2020 HIGHLIGHTS 

We use certain operational and financial metrics to measure our performance. These key metrics are highlighted below: 

Operational Metrics 
  

																	
	 	  	Three months ended December 31	 	  	Year ended December 31	 
	 	  	2020	 	  	2019	 	  	2020	 	  	2019	 
	 For the period ended:
	  				  				  				  			
	 Production volume sold by channel (units)
	  				  				  				  			
	 eCommerce
	  	 	105,874	 	  	 	9,499	 	  	 	319,682	 	  	 	21,444	 
	 Wholesale
	  	 	44,280	 	  	 	6,461	 	  	 	169,711	 	  	 	22,718	 
	 Number of eCommerce orders
	  	 	13,580	 	  	 	1,511	 	  	 	40,322	 	  	 	4,357	 
	 As at period end:
	  				  				  				  			
	 Production capacity (lbs)
	  				  				  	 	20,000	 	  	 	8,100	 
	 Number of product SKUs manufactured
	  				  				  	 	14	 	  	 	13	 
	 Number of wholesale distribution points(1)
	  				  				  	 	1,300	 	  	 	100	 

  

	(1) 	 Wholesale distribution points are defined as the number of retail stores multiplied by the number of SKUs.

  
 3 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Financial Highlights 
  

																	
	 	  	Three months ended December 31	 	 	Year ended December 31	 
	 	  	2020	 	 	2019	 	 	2020	 	 	2019	 
	 Revenue by channel
	  				 				 				 			
	 eCommerce
	  	$	 1,438,931	 	 	$	 118,721	 	 	$	 3,382,458	 	 	$	 225,121	 
	 Wholesale
	  	 	255,276	 	 	 	56,841	 	 	 	840,490	 	 	 	156,137	 
	 Butcher Shop, Restaurant and Other
	  	 	142,475	 	 	 	153,304	 	 	 	413,890	 	 	 	618,539	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
		  	$	1,836,682	 	 	$	328,866	 	 	$	4,636,838	 	 	$	 999,797	 
	 Gross Profit(1)
	  	$	 260,472	 	 	$	(48,463	) 	 	$	 827,106	 	 	$	 (169,786	) 
	 Gross Profit %
	  	 	14	% 	 	 	(15	%) 	 	 	18	% 	 	 	(17	%) 
	 Adjusted Gross Profit(1)
	  	$	 676,709	 	 	$	 53,662	 	 	$	 1,500,796	 	 	$	 156,020	 
	 Adjusted Gross Profit %(1)
	  	 	37	% 	 	 	16	% 	 	 	32	% 	 	 	16	% 
	 Net Loss
	  	$	(5,813,132	) 	 	$	(829,057	) 	 	$	(13,858,800	) 	 	$	(2,341,544	) 
	 Adjusted EBITDA net loss(1) 
	  	$	(3,279,266	) 	 	$	(579,836	) 	 	$	(8,344,117	)	 	$	(1,328,260	) 
	 Loss per share – basic and diluted
	  	$	 (0.06	) 	 	$	 (0.02	) 	 	$	 (0.21	) 	 	$	 (0.06	) 
	 Weighted average number of shares outstanding – basic and diluted
	  				 				 	 	66,388,474	 	 	 	36,330,356	 

  

	(1) 	 See “Non-GAAP Financial Measures” on page 16 for more information on
non-GAAP financial measures and reconciliations thereof. 

 OUR BUSINESS 

The Very Good Food Company Inc. is an emerging plant-based food technology company that produces plant-based meat and other food products that are
delicious while maintaining a wholesome nutritional profile. 
 The Company was incorporated on December 27, 2016, under the laws of the province
of British Columbia, Canada under its original name The Very Good Butchers Inc. The Company changed its name to The Very Good Food Company Inc. on October 1, 2019. Our head office is located at 2748 Rupert Street, Vancouver, British Columbia
(“BC”), V5M 3T7; registered and records office are located at Suite 409 – 221 West Esplanade, North Vancouver, BC, V7M 3J3.

The Company’s shares commenced trading on the Canadian Securities Exchange (the “CSE”) under the symbol “VERY” on
June 18, 2020. During the year, the Company’s shares began trading on the Frankfurt Stock Exchange (the “FSE”) under the symbol “0SI” and on the OTC QB Market (the “OTCQB”) under the symbol
“VRYYF” effective July 27, 2020 and October 14, 2020, respectively. 
 Effective March 17, 2021, the Company ceased trading
on the CSE and commenced trading on the TSX Venture Exchange (the “TSXV”) under the symbol “VERY.V”. 

  
 4 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 CORPORATE OVERVIEW 
  

 
 Our Business Model 
 As at
December 31, 2020, the Company’s product portfolio consisted of 14 products developed under The Very Good Butchers brand. As at December 31, 2020, all of our products were produced in our Victoria Facility located in BC, Canada.
As part of our strategy, we continue to focus on expanding our product portfolio and the number of production facilities – see “Our Strategic Progress” section for further details. 

We distribute and sell our products in 10 provinces and three territories in Canada and 50 states in the US through three main revenue channels:
(1) eCommerce, (2) Wholesale and (3) the Butcher Shop & Restaurant Flagship store (collectively, the “Distribution Network”) as described below.

 

	(1)	 eCommerce – Our eCommerce Store, accessible through the Company’s website, sells VERY GOOD’s
products both individually and in boxed sets, along with a small variety of third-party products that complement our core offerings. In addition, we offer a monthly subscription service which allows customers to receive monthly boxed sets at a
discount over a select period of time. As at December 31, 2020, the Company had over 800 active subscribers across Canada and in the US with new subscribers joining every day, the Company currently has over 2,000 active subscribers.

 eCommerce sales allow us to capitalize on demand by shipping products directly to consumers and transforming
demand into a recurring income stream via reorders and a subscription model. For the year ended December 31, 2020, the Company shipped 40,322 eCommerce orders. The Company monitors weekly orders versus inventory on hand and manages marketing
efforts in lock step with production capacity. 
  

									
	 	  	2020	 	  	2019	 
	eCommerce	  	$	3,382,458	 	  	$	225,121	 

  
 5 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

	(2)	 Wholesale – As at December 31, 2020, the Company had approximately 1,300 retail distribution points
in Canada in 275 stores (the “Wholesale Accounts”). These Wholesale Accounts include national grocery store chains operating in BC including, but not limited to, Whole Foods Markets, Thrifty Foods (Sobeys), Fresh St. Market, Choices
Markets, and IGA; as well as smaller independent grocers. VERY GOOD has experienced strong demand for its products in the wholesale channel and continues to market its products to a number of large retailers in both Canada and the US.

  

									
	 	  	2020	 	  	2019	 
	 Wholesale
	  	$	840,490		  	$	156,137	 

  

	(3)	 Butcher Shop & Restaurant Flagship Store – The Butcher Shop & Restaurant
is the brick and mortar of our distribution network. Designed as a flagship store to showcase our products, serve as a test kitchen and be utilized as a key marketing and branding tool. The Butcher Shop & Restaurant also retails a small
offering of plant-based dairy and cheese alternatives made by local artisan companies. Our second flagship store, based in Vancouver, BC (“Mount Pleasant”), is scheduled to open later in the fourth quarter of 2021. See “Our
Strategic Progress” section for further details. 

  
 6 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Our Strategy 

Our strategy is grounded in our mission and purpose, our pride in establishing and maintaining strong relationships with our customers through
differentiated products, and our commitment to long-term profitable growth. 
 Our key strategic choices position us to
create competitive advantages by offering the right mix of products, creating strong customer awareness and engagement, implementing reliable production at scale, while optimizing our geographic reach and fulfilment: 

 

							
	 Scale production and
distribution
	  	 Strengthen brand
awareness

and consumer
engagement
	  	 Launch new products

and gain market share
	  	 Global expansion

	 •  Build operational scalability and expand production competencies to meet consumer
demand
  
 •  Increase distribution
capabilities to drive greater market share capture across Canada and the US
  

•  Expand into US retail increasing the number of distribution points
	  	 •  Deepen brand awareness by encouraging people to consciously make lifestyle choices that
affect and contribute to their wellbeing and that of the planet
  

•  Own consumer relationships by providing the right mix of products at the right price, in the right channels,
supported by a brand purpose that consumers can embrace
	  	 •  Capitalize on strong R&D capabilities and specialized knowledge of plant-based protein
ingredients to expand our range of innovative and delicious product portfolio with a wholesome nutritional profile
  

•  Invest in technology to support growth and continued development of new innovative products

 
 •  Maximize SKUs and sales velocity of
leading products in the market
	  	 •  Continue to expand in the Canadian and US markets with future plans to launch products in
the UK and Europe via eCommerce and retail
  

•  Execute on accretive acquisitions to further expand product categories and geographic regions

  
 7 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 OUR STRATEGIC PROGRESS 

Expanding Production Capacity 
 Increased production capacity
enables us to start to meet the pent-up demand for our products, fulfill a larger number of eCommerce orders, expand our points of distribution within our wholesale network and take advantage of potential food
service opportunities. Our ability to reliably produce enough product to consistently fulfill orders is an important factor in the recruitment of larger grocery chains. 

Consistent with our growth strategy, we entered into two new food production facility leases during the fiscal year 2020, with the goal of ramping up
our production capacity to meet growing demand and increasing the availability of our products to consumers not only in Canada and in the US, but also in Europe. 
  

			
	 Rupert Facility
	  	 •  Location: Vancouver, BC, Canada

 
 •  Size:
45,000 square feet
  

•  Potential annual production capacity: 37 million lbs

 
 •  Number of
production lines: 2
  

•  Estimated capital expenditure (including tenant improvements): $20-25 million
  

•  Start date of food production: April 2021

		
	 Patterson Facility
	  	 •  Location: Patterson, California, United States

 
 •  Size:
25,000 square feet (with first right of refusal on an additional 25,000 square feet)
  

•  Potential annual production capacity: 98.5 million lbs

 
 •  Number of
production lines: 3-4
  

•  Expected capital expenditure:
$30-50 million
  

•  Expected start date of food production: latter part of 2021

 Rupert Facility 
 During the
third quarter of 2020, a unique opportunity to address near-term demand was presented for an already built-out food production facility in Vancouver, BC (the “Rupert Facility”). The facility
comprises approximately 45,000 square feet of production, refrigeration, warehousing, R&D and office space, and is expected to be capable of producing up to 37,000,000 lbs of annualized product to be phased in over the next year. The Company
took possession of the lease in January 2021. 
 The Rupert Facility will have two production lines. The first line, Line 1, has been commissioned,
tested and is currently producing product effective April 2021. Line 1 is expected to initially produce 7+ SKUs which are already being sold in the market. The second line is planned to start food production in Q4 2021 and is expected to produce at
least another 6+ SKUs that are yet to be launched into the market. 
 Patterson Facility 

To support the expansion of our US operations and the introduction of new products into the market, VERY GOOD signed a lease on August 31, 2020, for
a 25,000 square foot production facility, with the option to lease an additional 25,000 square feet, located in Patterson, California (the “Patterson Facility”). 

The Patterson Facility is strategically located on the same property as one of the Company’s third-party logistics providers such that product can
be delivered for distribution by way of a short-haul forklift at minimal cost and time in transit. The Patterson Facility is also located on key shipping routes for ground transportation to wholesale clients and is in close proximity to key
suppliers. 

  
 8 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 The Patterson Facility can accommodate up to three to four production lines allowing for potential
capacity of up to 98,500,000 lbs of product per year. The Company recently recruited a capital projects manager and a plant manager, who have extensive experience in the food manufacturing industry in California, to oversee the Patterson
Facility’s commissioning and operations. We plan to start food production in the latter part of 2021. 
 Victoria Facility 

With continued growth in product demand, increasing production at the Victoria Facility was a high priority in 2020. Various initiatives to optimize and
increase production were put in place such as effective production scheduling, labour retention and supply chain planning. The Company implemented an updated inventory management system in September 2020 which has streamlined inventory tracking and
procurement. In addition, pending possession of additional warehouse space in Victoria at the beginning of 2021, the Company implemented a just-in-time inventory
management system, which is expected to further increase capacity and improve eCommerce order wait times. The initiatives implemented to date resulted in an increase in weekly production volume to approximately 20,000 lbs per week as at
December 31, 2020. 
 Expansion of Wholesale Distribution 

We continued to expand our Canadian wholesale distribution points during the fiscal year 2020 as part of our strategic focus to meet demand and increase
customer awareness resulting in revenue growth. As a result, we entered into several retail partnerships and have expanded our points of distribution in Canada 13 times in the past year. 

Since the beginning of fiscal 2021, we have entered into an agreement with Quality Foods to distribute The Very Good Butchers brand, increasing VERY
GOOD’s retail network by 14 locations. Quality Foods is a premier Vancouver Island, BC grocer that has operated as a community staple since 1986. In 2017, The Jim Pattison Group acquired the wholly-owned grocery chain and added it to their
existing portfolio of brands which include boutique banners such as Urban Fare and larger Western banners like Save-on-Foods. In February 2021, Sobeys agreed to expand product placements into its top ten Safeway locations. Sobeys is Canada’s
second-largest retailer; with over 1,500 stores operating under various banners of which 183 are Safeway locations. 
 To increase our wholesale
retail distribution in the US, which is a key component of our 2021 growth strategy, the Company announced on April 14, 2021 that it has entered into a new partnership with Boulder, Colorado-based natural food and beverage brokerage, Green
Spoon Sales (“Green Spoon”), to accelerate the Company’s reach into grocery and retail across the US. The partnership with Green Spoon is poised to significantly boost VERY GOOD’s wholesale retail distribution in the US.

 Strategic Warehousing and Logistics Partnerships 

Establishing hubs across North America is a critical step in building a scalable eCommerce business, reducing shipping costs, and enhancing customer
relationships through faster delivery times. 
 In August 2020, the Company signed agreements with three strategically located third party logistics
providers (“3PL”) in North America to increase speed of delivery to customers and reduce associated shipping costs for its eCommerce orders. The 3PL facilities’ centralized locations provide VERY GOOD with the capabilities of
reaching anywhere in North America in 2-3 days via ground transportation. All three providers provide, pick, pack and ship for our eCommerce orders, increasing our online order fulfilment rate from 900 per
week to 1,800 during the fourth quarter of 2020; and wholesale palletization for our retail orders. 
 We are currently exploring 3PL partnerships in
Europe with plans to launch an eCommerce sales platform in the United Kingdom in the third quarter of 2021; and an online platform in the European Union late in the fourth quarter of 2021. 

  
 9 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Mount Pleasant Flagship Store and R&D Innovation Centre 

In January 2020, the Company signed a lease for an approximately 14,000 square feet space in Vancouver’s Mount Pleasant district (“Mount
Pleasant”) and took possession on September 1, 2020. Mount Pleasant will be our second flagship store with a retail front featuring our Butcher Shop and Restaurant concept including a test kitchen and R&D innovation centre. The
R&D innovation centre will include a smaller production line which will be used to test new products and produce product for sale. This investment in product innovation and development will allow for the rapid introduction of new creative
products into the market in line with our growth strategy. 
 The design and layout for Mount Pleasant have been finalized. The Company is working
with the City of Vancouver on the construction permits required. We anticipate welcoming our first customers to the Mount Pleasant flagship store in Q4 2021. 

Victoria Flagship Store 
 In January 2021, we announced the
launch of a new flagship Butcher Shop and Restaurant located in downtown Victoria, BC. The new flagship restaurant will have an outdoor patio and a larger footprint than our current butcher shop located in the Victoria Public Market and will
accommodate a higher volume of customers while maintaining COVID-19 pandemic social distancing protocols. This Butcher Shop and Restaurant will be a template for the opening of additional flagship stores
across strategic cities in North America. Improvements are underway and the new butcher shop is scheduled for an official opening in June 2021. 
 Strategic
Acquisitions 
 Our acquisition strategy centers on assessing selective complementary assets with new superior product offerings creating the right
mix of products for our customers, generating strong brand awareness, manufacturing or distribution capabilities, with North American or European footholds and the opportunity for large upside potential. 

On February 24, 2021, in line with our acquisition strategy, the Company completed the acquisition of The Cultured Nut Inc. (the “Cultured
Nut”), a highly popular artisan vegan cheese producer on the West Coast of Canada with current sales distribution in several online and grocery retailers including select Whole Foods Market stores. We plan to rebrand Cultured Nut’s
product line under a new brand called The Very Good Cheese Co. which is expected to launch in the second quarter of 2021 through VERY GOOD’s eCommerce and wholesale distribution networks. 

The acquisition was completed pursuant to a share purchase agreement with the shareholders of Cultured Nut for an aggregate purchase price of
$3,000,000; comprised of an equity payment of $1,000,000 consisting of 139,676 VERY GOOD common shares at a deemed price of approximately C$7.16 per share and a cash portion of $2,000,000 of which $1,000,000 is contingent on the successful
achievement of certain milestones related to the integration of the Cultured Nut’s business over a 12-month period. 

On March 15, 2021, VERY GOOD completed the strategic acquisition of the Lloyd-James Marketing Group Inc. (“Lloyd-James”), a
boutique wholesale and food service broker specializing in the plant-based food industry with a history of placement in large natural, speciality and conventional grocery retailers such as Sobeys, Metro, Loblaws and Walmart. Since 2019, Lloyd-James
has played an integral role in the development of VERY GOOD’s retail distribution network into retailers such as Whole Foods Market, Sobeys, The Pattison Group and several others.

  
 10 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 The acquisition was completed pursuant to a share purchase agreement with the sole shareholder
of Lloyd-James for an aggregate purchase price of $1,075,000; comprised of an equity payment of $400,000 consisting of 62,329 VERY GOOD common shares at a deemed price of approximately $6.42 per share and a cash portion of $675,000 of which
$350,000 is contingent on the successful achievement of certain milestones related to the achievement of specific sales targets during the fiscal period ended 2021. 

Developing Innovative Products 
 We have a team of scientists
and food technology experts in Vancouver working on developing innovative new plant-based products and continuously improving the taste and texture of our product line. 

During the third quarter of 2020, we launched the retail rollout of The Very Good Pepperoni, an upscale adzuki bean-based pepperoni product for the use
in pizzas, charcuterie, and many other creations; as well as The Very Good Dog, our plant-based version of the classic hot dog. 
 VERY GOOD is
currently developing its new gluten-free Butcher’s Select product line which is expected to be introduced in the third quarter of 2021. The Butcher’s Select product range comprises extra meaty artisanal meats made with simple plant-based
ingredients. These sausages, burgers and meatballs are gluten-free, soy-free and will be Non-GMO verified. 

From the acquisition of The Cultured Nut, VERY GOOD will be launching The Very Good Cheese Co. brand in the second quarter of 2021 in the eCommerce
channel with retail to follow. Of Cultured Nut’s seven products already in retail, VERY GOOD has selected four to relaunch in the summer with the remaining products to be reintroduced in 2022. Cultured Nut has an extensive R&D pipeline of
over eight products new to the retail market which VERY GOOD will be performing readiness assessments on in the latter part of the year. 
 OUTLOOK 

We are excited to see what we can achieve in 2021 with the launch of the Rupert Facility effectively adding 45,000 square feet of production space and
enabling over 27 times current production capacity by the end of the year, allowing us to meet the growing demand for our products. On April 7, 2021, we announced the commissioning of our first production line - by butchering the very first
bean - at the Rupert production facility. Food production is expected to commence at our Patterson Facility in California in the latter half of 2021 with the commissioning of its first large scale production line in the first quarter of 2022. 

We are actively building and strengthening our leadership team with our recent acquisition of the Lloyd-James Marketing Group and recent appointments to
the sales and marketing teams. We expect to scale our retail network from 275 retail stores and 1,300 points of distribution at the end of 2020 to a target of greater than 3,000 retail stores and 15,000 points of distribution by the end of 2021 in
Canada and the US. 
 At the same time, we are also positioned to take advantage of the increase in online grocery shopping with our established
eCommerce platforms in Canada and the US. With enhanced production capacity to meet customer demand, the launch of our US eCommerce website in the third quarter of 2020 and agreements with strategically located third party logistics providers that
will reduce both order and shipment fulfilment times, we will have the capability to complete over 5,000 orders per week in 2021. 
 Our R&D team
of food scientists and technology experts continue to focus on formalizing the next generation of plant-based products that are non-GMO certified. R&D will remain a core focus area for us in 2021 and
beyond as we continue to create plant-based products with high-quality ingredients that deliver a healthier nutritional profile and taste great. In the third quarter of 2021, we expect to launch our new Butcher’s Select, gluten-free line of
products including burgers, meatballs and sausages which will be distributed through both eCommerce and Wholesale channels in Canada and the US. 

  
 11 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 We will continue to drive towards sustainability, including regular evaluations of our sourcing and
manufacturing and clean packaging that is both environmentally friendly and guarantees shelf life. We are also committed to continuous research, development, and improvement, working to achieve sustainability certifications and aiming to eventually
be both carbon and plastic neutral. We are working on non-GMO certification of our products, which we are targeting to achieve starting in Q3 2021. 

COVID-19 
 In
March 2020, the World Health Organization declared the outbreak of COVID-19 a worldwide pandemic.
COVID-19 has continued to spread globally and has had a significant impact on general economic conditions on a global scale.

We experienced a surge in demand in our eCommerce store early on in the COVID-19 pandemic
due to consumer trends shifting toward eating at home as a result of social distancing restrictions. At the same time, we experienced a decline in our Victoria Butcher Shop business, as a result of government mandated closures for in-restaurant dining. Since March 2020, we have operated our Victoria Facility with stringent safety measures in place including the extensive use of personal protective equipment by our team members.

While some of these restrictions have been lifted or eased in many jurisdictions as the rates
of COVID-19 infections have decreased or stabilized, as at the date of this Management’s Discussion and Analysis, BC continues to experience a resurgence
of COVID-19 which has led to renewed restrictions including a provincial order to suspend dine-in restaurant services which is currently in effect until
May 26, 2021 and which may be extended further. As a result of this ‘’third wave’’, we may experience short-term or extended disruptions to our operations and could be required to temporarily suspend production as a
result of an outbreak of COVID-19. Similarly, the ongoing production ramp-up and planned construction of line 2 at the Rupert Facility, construction at
Mount Pleasant Facility and the opening of the new location of our Victoria Butcher Shop may be moderately or severely delayed as a result of COVID-19 related impacts. We could also be
negatively affected if our suppliers, distributors or logistics providers experience disruptions within their operations. 

  
 12 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 KEY LEADERSHIP CHANGES AND APPOINTMENTS 

Board of Directors 
  

			
	

	  	 In December 2020, Bill Tolany, a past Whole Foods Market and Amazon executive, was appointed to VERY GOOD’s Board of Directors.
Bill brings a wealth of experience in marketing and eCommerce strategies. Bill served as the Senior Director of Marketing at Whole Foods Market, where he was responsible for launching the company’s integrated marketing team and growing
alternative commerce sales by hundreds of millions of dollars. Bill was then recruited by Amazon to join the company as Regional General Manager, where he helped lead the launch and expansion of Amazon Prime Now, Amazon’s transformative entry
into local retail and ultra-fast delivery.
  
 In connection with
this appointment, Drew Bonnell stepped down from the Company as Director and Corporate Secretary effective December 4, 2020. Drew led VERY GOOD’s Initial Public Offering (“IPO”) and was instrumental in the growth of the
Company to where it is today.

		
	 “The Bean Suite” (C-Suite)
	  	
		
	

	  	 As of January 2021, Ana Silva commenced her role with the Company as President. Ana was born and raised in Portugal, a culture where
bringing people together over good food is foundational. Ana is a people-focused leader, excited to unlock the potential at VERY GOOD. Accelerating team and growth is her passion. She spent the past five years with Daiya Foods as CFO, when Daiya was
ranked as the fastest growing plant-based company in North America and successfully sold for C$405 million.

		
	

	  	 Kamini Hitkari joined VERY GOOD as CFO on September 22, 2020. Kamini has held progressive roles in corporate finance since her
PwC days, serving in top executive positions contributing to strategic M&A transactions of up to C$2.6 billion, scaling businesses and launching product lines for companies like Aurora Cannabis and HSBC Bank Canada.

  
 13 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 “The Beantastics” (Leadership Team) 

Kyle Marancos joined the team as Director of Marketing effective January 2021. Kyle has an extensive pedigree in the food and beverage industry where he
spent the last six years as the Director of Marketing with Earth’s Own Food Company Inc., well known for their Happy Planet Products. Prior experience also includes twelve years working with Unilever, where he was the Senior Global Brand
Development Manager for their Bertolli Brand. 
 In February 2021, the Company announced the appointment of Kevin Callaghan, a veteran sales executive
in the plant-based food space, as its Director of Sales for US markets. Kevin has extensive experience in the plant-based food industry where he held senior roles with early rapid growth companies including Daiya. 

Jordan James Rogers joined The VERY GOOD team as Director of Sales for Canada in March 2021. In his previous role as the founder of Lloyd-James
Marketing Group Inc, Canada’s first natural and plant-based food brokerage, which was acquired by VERY GOOD on March 15, 2021. 

  
 14 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 FINANCIAL PERFORMANCE REVIEW 

Effective for the year ended December 31, 2020, the Company elected to change its accounting policy for the presentation of expenses on its
consolidated statements of net loss and comprehensive loss from the “nature of expense” method to the “function of expense” basis. The Company believes that the revised presentation provides more relevant financial information to
users of the consolidated financial statements. 
 Management has applied the change in presentation retrospectively and the consolidated statement of
net loss and comprehensive loss for the year ended December 31, 2019 was reclassified. Refer to Note 3 of the consolidated financial statements for further details. 

Selected Financial Information 
  

																					
	 	  	Three months
ended
December 31	 	 	Three months
ended
September 30	 	 	Three months
ended
December 31	 	 	Year ended
December 31	 	 	Year ended
December 31	 
	 	  	2020	 	 	2020	 	 	2019	 	 	2020	 	 	2019	 
	 Revenue
	  	$	 1,836,682	 	 	$	 1,373,814	 	 	$	 328,866	 	 	$	 4,636,838	 	 	$	 999,797	 
	 Procurement expense
	  	 	(1,576,210	) 	 	 	(1,085,675	) 	 	 	(377,329	) 	 	 	(3,809,732	) 	 	 	(1,169,583	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Gross profit(1)
	  	 	260,472	 	 	 	288,139	 	 	 	(48,463	) 	 	 	827,106	 	 	 	(169,786	) 
	 Gross profit %(1)
	  	 	14	% 	 	 	21	% 	 	 	(15	%) 	 	 	18	% 	 	 	(17	%) 
	 Fulfilment expense
	  	 	(778,123	) 	 	 	(637,905	) 	 	 	(72,754	) 	 	 	(1,907,621	) 	 	 	(170,617	) 
	 General and administrative expense
	  	 	(3,858,273	) 	 	 	(1,890,707	) 	 	 	(563,217	) 	 	 	(7,084,795	) 	 	 	(1,622,541	) 
	 Marketing and investor relations expense
	  	 	(973,853	) 	 	 	(1,365,552	) 	 	 	(45,595	) 	 	 	(3,243,210	) 	 	 	(64,445	) 
	 Research and development expense
	  	 	(210,018	) 	 	 	(104,908	) 	 	 	(101,337	) 	 	 	(477,750	) 	 	 	(125,680	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Operating loss
	  	 	(5,559,795	) 	 	 	(3,710,933	) 	 	 	(831,366	) 	 	 	(11,886,270	) 	 	 	(2,153,069	) 
	 Finance (expense) income
	  	 	(148,014	) 	 	 	(782,506	) 	 	 	17,516	 	 	 	(1,842,853	) 	 	 	(173,268	) 
	 Other expense
	  	 	(105,323	) 	 	 	(3,588	) 	 	 	I15,207	) 	 	 	(129,677	) 	 	 	(15,207	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net loss
	  	$	(5,813,132	) 	 	$	(4,497,027	) 	 	$	(829,057	) 	 	$	(13,858,800	) 	 	$	(2,341,544	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted gross profit(1)
	  	$	 676,709	 	 	$	 370,507	 	 	$	 53,662	 	 	$	 1,500,796	 	 	$	 156,020	 
	 Adjusted gross profit %(1)
	  	 	37	% 	 	 	27	% 	 	 	16	% 	 	 	32	% 	 	 	16	% 
	 Adjusted EBITDA loss(1)
	  	$	(3,279,266	) 	 	$	(3,138,595	) 	 	$	(579,836	) 	 	$	(8,344,117	) 	 	$	(1,328,260	) 

  

	(1) 	 See “Non-GAAP Financial Measures” on page 16 for more information on
non-GAAP financial measures and reconciliations thereof. 

  
 15 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA 
 Adjusted EBITDA is a non-GAAP financial measure used by management that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Management defines adjusted
EBITDA as net loss before finance expense, tax, depreciation and amortization, share-based compensation and other one-time and non-cash items. Management believes
adjusted EBITDA is a useful financial metric to assess its operating performance. 
  

																					
	 	  	Three months
ended
December 31	 	 	Three months
ended
September 30	 	 	Three months
ended
December 31	 	 	Year ended
December 31	 	 	Year ended
December 31	 
	 	  	2020	 	 	2020	 	 	2019	 	 	2020	 	 	2019	 
	 Net loss as reported
	  	$	(5,813,132	) 	 	$	(4,497,027	) 	 	$	(829,057	) 	 	$	(13,858,800	) 	 	$	(2,341,544	) 
	 Adjustments:
	  				 				 				 				 			
	 Depreciation
	  	 	153,295	 	 	 	117,265	 	 	 	50,803	 	 	 	425,276	 	 	 	161,583	 
	 Loss on termination of lease
	  	 	—  	 	 	 	7,533	 	 	 	—  	 	 	 	7,533	 	 	 	—  	 
	 Finance expense (income)
	  	 	148,014	 	 	 	782,506	 	 	 	(17,515	) 	 	 	1,842,853	 	 	 	173,268	 
	 Share-based compensation
	  	 	1,951,150	 	 	 	379,326	 	 	 	200,933	 	 	 	2,780,488	 	 	 	200,933	 
	 Shares, units and warrants issued for services
	  	 	281,407	 	 	 	71,802	 	 	 	15,000	 	 	 	458,533	 	 	 	477,500	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted EBITDA loss
	  	$	(3,279,266	) 	 	$	(3,138,595	) 	 	$	(579,836	) 	 	$	(8,344,117	) 	 	$	(1,328,260	) 

 Gross profit and adjusted gross profit 

Management utilizes adjusted gross profit to provide a representation of performance in the period by excluding the
non-cash impact of share-based expense recognized in procurement expense during the period as well as The Butcher Shop & Restaurant related procurement costs. Management believes adjusted gross profit
provides useful information as it represents gross profit for management purposes based on cost to procure and manufacture the Company’s finished goods excluding any non-cash items. 

 

																					
	 	  	Three months
ended
December 31	 	 	Three months
ended
September 30	 	 	Three months
ended
December 31	 	 	Year ended
December 31	 	 	Year ended
December 31	 
	 	  	2020	 	 	2020	 	 	2019	 	 	2020	 	 	2019	 
	 Revenue
	  	$	1,836,682	 	 	$	 1,373,814	 	 	$	328,866	 	 	$	4,636,838	 	 	$	 999,797	 
	 Procurement expense
	  	 	(1,576,210	) 	 	 	(1,085,675	) 	 	 	(377,329	) 	 	 	(3,809,732	) 	 	 	(1,169,583	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Gross profit
	  	 	260,472	 	 	 	288,139	 	 	 	(48,463	) 	 	 	827,106	 	 	 	(169,786	) 
	 Adjustments:
	  				 				 				 				 			
	 The Butcher Shop & Restaurant procurement expense
	  	 	140,028	 	 	 	76,439	 	 	 	90,376	 	 	 	377,306	 	 	 	314,057	 
	 Share-based compensation
	  	 	276,209	 	 	 	5,929	 	 	 	11,749	 	 	 	296,384	 	 	 	11,749	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted gross profit
	  	$	 676,709	 	 	$	 370,507	 	 	$	 53,662	 	 	$	 1,500,796	 	 	$	 156,020	 
	 Adjusted gross profit %
	  	 	37	% 	 	 	27	% 	 	 	16	% 	 	 	32	% 	 	 	16	% 

  
 16 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Revenue 
 Revenue by
geographic region 
  

																					
	 	  	Three months
ended
December 31	 	  	Three months
ended
September 30	 	  	Three months
ended
December 31	 	  	Year ended
December 31	 	  	Year ended
December 31	 
	 	  	2020	 	  	2020	 	  	2019	 	  	2020	 	  	2019	 
	 Canada
	  	$	1,349,314	 	  	$	1,227,850	 	  	$	328,866	 	  	$	4,003,507	 	  	$	999,797	 
	 United States
	  	 	487,368	 	  	 	145,964	 	  	 	—  	 	  	 	633,331	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	1,836,682	 	  	$	1,373,814	 	  	$	328,866	 	  	$	4,636,838	 	  	$	999,797	 

 Revenue by channel 
  

																					
	 	  	Three months
ended
December 31	 	  	Three months
ended
September 30	 	  	Three months
ended
December 31	 	  	Year ended
December 31	 	  	Year ended
December 31	 
	 	  	2020	 	  	2020	 	  	2019	 	  	2020	 	  	2019	 
	 eCommerce
	  	$	1,438,931	 	  	$	 978,885	 	  	$	118,721	 	  	$	3,382,458	 	  	$	225,121	 
	 Wholesale
	  	 	255,276	 	  	 	310,443	 	  	 	56,841	 	  	 	840,490	 	  	 	156,137	 
	 Butcher Shop & Restaurant and Other
	  	 	142,475	 	  	 	84,486	 	  	 	153,304	 	  	 	413,890	 	  	 	618,539	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	1,836,682	 	  	$	1,373,814	 	  	$	328,866	 	  	$	4,636,838	 	  	$	999,797	 

 Three Months Ended December 31, 2020 compared to September 30, 2020 

Revenue increased $462,868 (34%) to $1,836,682 in the fourth quarter of 2020, compared to $1,373,814 in the previous quarter ended September 30,
2020. This increase was driven by $487,368 in US eCommerce sales compared to $145,964 in the previous quarter mainly due to the launch of our US eCommerce platform in July 2020, as well as holiday orders and promotional initiatives including Black
Friday and Cyber Monday. 
 Three Months Ended December 31, 2020 compared to December 31, 2019 

Revenue increased $1,507,816 (458%) to $1,836,682 in the fourth quarter of 2020, compared to $328,866 in the same period in fiscal 2019. The growth in
revenue was driven by an increase of $1,320,210 in eCommerce sales and $198,435 in wholesale revenue due to the Company’s scaling of production and distribution through both of these sales channels. Of the increase in eCommerce revenue,
$487,368 was attributed to US sales with the introduction of the Company’s US website in the third quarter of 2020. Wholesale revenue increased during the fourth quarter due to higher demand of our holiday products; in addition to agreements
with new wholesale distributors during the latter half of the year. 
 Year Ended December 31, 2020 compared to December 31, 2019 

Revenue increased $3,637,041 (364%) to $4,636,838 for the year ended December 31, 2020, compared to $999,797 in fiscal 2019. The increase in revenue
was attributed to the Company’s continued focus on scaling production and distribution through both its eCommerce and wholesale sales channels. During fiscal 2020, average production capacity increased from 8,100 lbs per week to approximately
20,000 lbs per week resulting from our new 3PL logistics partnerships allowing for fulfilment of our sales orders at third party distribution centres and other programs to increase the production footprint at the Victoria Facility. eCommerce orders
increased 825% from 4,357 orders in fiscal 2019 to 40,322 orders in fiscal 2020 primarily due to an increase in key marketing and sales initiatives to drive higher sales volume in both Canada and the US. Wholesale distribution points increased
1,200% from 100 in fiscal 2019 to 1,300 in fiscal 2020 with the addition of new retail banners. 

  
 17 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Procurement expense 

Procurement expense consists of the cost of raw materials, supplies and inventory packaging, inbound shipping charges, employee wages and benefits, and
other attributable overhead expenses incurred in the procurement and manufacturing of the Company’s finished goods. Procurement expense also includes expense associated with the Butcher Shop & Restaurant including food costs, direct
labor and other attributable overhead expenses. 
 Three Months Ended December 31, 2020 compared to September 30, 2020 

Procurement expense increased $490,535 (45%) to $1,576,210 in the fourth quarter of 2020, compared to $1,085,675 in the previous quarter ended
September 30, 2020. The increase in procurement expense was mainly attributed to higher share-based compensation expense of $270,280 incurred for new employees hired to support revenue growth as well as increased sales during the quarter. 

Three Months Ended December 31, 2020 compared to December 31, 2019 

Procurement expense increased $1,198,881 (318%) to $1,576,210 in the fourth quarter of 2020, compared to $377,329 in the same quarter in fiscal 2019. The
increase in procurement expense was primarily driven by the Company ramping up production to support the distribution of its products; in addition to $264,460 in higher share-based compensation expense incurred for new employees hired for
production. 
 Year Ended December 31, 2020 compared to December 31, 2019 

Procurement expense increased $2,640,149 (226%) to $3,809,732 for the year ended December 31, 2020, compared to $1,169,583 in the same period in
fiscal 2019 for the same reasons outlined above. 
 Gross profit and adjusted gross profit 

Gross profit is a non-GAAP measure calculated as total revenue less procurement expense. See “Non-GAAP Financial Measures” on page 16 for more information on management’s use of adjusted gross profit and a reconciliations thereof. 

Three Months Ended December 31, 2020 compared to September 30, 2020 

Gross profit decreased $27,667 (10%) to $260,472 or 14% in the fourth quarter of 2020, compared to $288,139 or 21% in the previous quarter ended
September 30, 2020. Excluding the Butcher Shop & Restaurant procurement expense and share-based compensation, adjusted gross profit was $676,709 or 37% in the fourth quarter of 2020, compared to $370,507 or 27% in the previous quarter
ended September 30, 2020. The improvement in adjusted gross profit was primarily driven by increased sales volume achieved through maximizing the production footprint at the Victoria Facility. 

Three Months Ended December 31, 2020 compared to December 31, 2019 

Gross profit increased $308,935 (637%) to $260,472 or 14% in the fourth quarter of 2020, compared to gross loss of $48,463 or -15% for the same period in fiscal 2019. Excluding the Butcher Shop & Restaurant procurement expense and share-based compensation, adjusted gross profit was $676,709 or 37% in the fourth quarter of 2020,
compared to $53,662 or 16% in the fourth quarter in 2019. The improvement in adjusted gross profit was primarily driven by increased sales volume achieved through maximizing the production footprint at the Victoria Facility. 

  
 18 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Year Ended December 31, 2020 compared to December 31, 2019 

Gross profit increased $996,892 (587%) to $827,106 or 18% for the year ended December 31, 2020, compared to gross loss of $169,786 or -17% in fiscal 2019. Excluding the Butcher Shop & Restaurant procurement expense and share-based compensation, adjusted gross profit was $1,500,796 or 32% for the year ended December 31, 2020, compared
to $156,020 or 16% for fiscal 2019. The improvement in gross profit is for the same reasons outlined above. 
 Fulfilment expense 

Fulfilment expense represents third-party fulfilment costs for picking and packing of inventory into orders, fulfilment packaging costs, direct
fulfilment labor, outbound shipping and freight costs, and warehousing and shipping fees for customer orders. 
 Three Months Ended December 31, 2020 compared
to September 30, 2020 
 Fulfilment expense increased $140,218 (22%) to $778,123 in the fourth quarter of 2020, compared to $637,905 in the
previous quarter ended September 30, 2020. Fulfilment expense increased mainly due to higher outbound shipping costs and 3PL logistics services due to scaling of eCommerce and wholesale orders through marketing efforts. 

Three Months Ended December 31, 2020 compared to December 31, 2019 

Fulfilment expense increased $705,369 (970%) to $778,123 in the fourth quarter of 2020, compared to $72,754 in the same quarter in fiscal 2019. The
increase in fulfilment expense was primarily driven by the ramp up of production and sales efforts to scale our eCommerce and wholesale orders. To support these efforts, the Company entered into agreements with three 3PL logistic service providers
in Canada and the US to increase the production footprint at the Victoria Facility and improve order fulfilment speed. Shipping costs also increased due to higher carrier changes to improve eCommerce delivery times. 

Year Ended December 31, 2020 compared to December 31, 2019 

Fulfilment expense increased $1,737,004 (1,018%) to $1,907,621 for the year ended December 31, 2020, compared to $170,617 in the same period in
fiscal 2019 for the same reasons outlined above. 
 General and administrative expense 

General and administrative expense are primarily comprised of administrative expenses, salaries, wages and benefits, including associated share-based
compensation not directly associated with other functions, non-production rent expense, depreciation and amortization expense on non-production assets and other non-production operating expenses. Administrative expenses include the expenses related to management, accounting, legal, information technology, and other support functions. 

Three Months Ended December 31, 2020 compared to September 30, 2020 

General and administrative expense increased $1,967,566 (104%) to $3,858,273 in the fourth quarter of 2020, compared to $1,890,707 in the previous
quarter ended September 30, 2020. The increase in general and administrative expense is mainly attributed to higher share-based compensation expense of $1,234,573 because of stock option grants to new employees to create alignment with the aim
of generating shareholder value. 

  
 19 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Three Months Ended December 31, 2020 compared to December 31, 2019 

General and administrative expense increased $3,295,056 (585%) to $3,858,273 in the fourth quarter of 2020, compared to $563,217 in the same period in
fiscal 2019. Share-based compensation expense was higher by $1,416,887 compared to the same period in fiscal 2019 due to the introduction of an employee equity compensation program in fiscal 2020. Excluding share-based compensation, general and
administrative expense increased $1,878,169 (489%) in the fourth quarter of 2020, compared to the same quarter in 2019. The increase is mainly attributable to higher salaries and wages expense as the Company hired key management and administrative
positions to support its planned growth. The Company also incurred additional accounting and legal, and general office expenses due to the higher volume of business. 

Year Ended December 31, 2020 compared to December 31, 2019 

General and administrative expense increased $5,462,254 (337%) to $7,084,795 in 2020, compared to $1,622,541 in fiscal 2019. Share-based compensation
expense was higher by $2,190,832 compared to the same period in fiscal 2019 due to the introduction of an employee equity compensation program in fiscal 2020. Excluding share-based compensation, general and administrative expense increased
$3,271,422 (227%) in fiscal 2020, mainly attributable to higher salaries and wages expense of $2,370,059 as the Company continued to hire key management and administrative positions to support its planned growth. Higher legal, audit and professional
fees of $395,262 were incurred in fiscal 2020 primarily due to the Company’s listing on the Canadian Securities Exchange and subsequent financings. The Company also incurred office rent expense, recruitment fees, information technology and
licensing costs with the build out of the team in both Victoria and Vancouver, BC to support the next phase of growth. 
 Marketing and investor relations expense

 Three Months Ended December 31, 2020 compared to September 30, 2020 

Marketing and investor relations expense decreased $391,699 (29%) to $973,853 in the fourth quarter of 2020, compared to $1,365,552 in the previous
quarter ended September 30, 2020. The decrease was primarily due to digital marketing campaigns and investor relations communications and awareness programs initiated in the previous quarter focused on building company and brand awareness. 

Three Months Ended December 31, 2020 compared to December 31, 2019 

Marketing and investor relations expense increased $928,258 (2,036%) to $973,853 in the fourth quarter of 2020, compared to $45,595 in the same quarter
in fiscal 2019. The increase in marketing and investor relations expense was mainly due to the introduction of digital marketing campaigns for the eCommerce channel focused on customer acquisition as well as corporate investor relations
communications and awareness initiatives in fiscal 2020. 
 Year Ended December 31, 2020 compared to December 31, 2019 

Marketing and investor relations expense increased $3,178,765 (4,933%) to $3,243,210 for the year ended December 31, 2020, compared to $64,445 in
fiscal 2019 for the same reasons above. 

  
 20 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Research and development expense 

Three Months Ended December 31, 2020 compared to September 30, 2020 

Research and development expense increased $105,110 (100%) to $210,018 in the fourth quarter of 2020, compared to $104,908 in the previous quarter ended
September 30, 2020. The increase in research and development expense was mainly attributed to additional salaries and wages expense including share-based compensation expense of $39,663 incurred to expand the R&D team for future product
innovation and development. 
 Three Months Ended December 31, 2020 compared to December 31, 2019 

Research and development expense increased $108,681 (107%) to $210,018 in the fourth quarter of 2020, compared to $101,337 in the same quarter in fiscal
2019. The increase in research and development expense was mainly attributed to additional salaries and wages expense including share-based compensation of $42,891 incurred to expand the R&D team for future product innovation and development.

 Year Ended December 31, 2020 compared to December 31, 2019 

Research and development expense increased $352,070 (280%) to $477,750 for the year ended December 31, 2020, compared to $125,680 in fiscal 2019 for
the same reasons above. 
 Finance Expense 
 Three Months Ended
December 31, 2020 compared to September 30, 2020 
 Finance expense decreased $634,492 (81%) to $148,014 in the fourth quarter of 2020,
compared to $782,506 in the previous quarter ended September 30, 2020. The decrease in expense was due to the issuance of common shares in the prior quarter with a fair value of $694,375 pursuant to the settlement of $102,113 owing to a vendor
resulting in a loss on settlement of debt of $592,262. 
 Three Months Ended December 31, 2020 compared to December 31, 2019 

Finance expense increased $165,530 (945%) to $148,014 in the fourth quarter of 2020, compared to finance income of $17,516 in the same quarter in fiscal
2019. The increase was mainly attributed to interest expense on lease liabilities pertaining to right-of-use assets for the Rupert Facility, Patterson Facility and Mount
Pleasant. 
 Year Ended December 31, 2020 compared to December 31, 2019 

Finance expense increased $1,669,585 (964%) to $1,842,853 for the year ended December 31, 2020, compared to $173,268 in fiscal 2019. The increase in
finance expense was mainly attributed to $765,000 in losses recognized for the difference between the fair value of the common shares issued and the carrying value of the convertible debentures at the time of conversion. The Company also incurred
$592,262 for a loss on settlement of debt in the third quarter of 2020 as noted above and recognized $345,958 in interest expense on lease liabilities pertaining to
right-of-use assets for the Rupert Facility, Patterson Facility and Mount Pleasant. 

  
 21 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Other Expense 
 Three
Months Ended December 31, 2020 compared to September 30, 2020 
 Other expense increased $101,735 (2,835%) to $105,323 in the fourth
quarter of 2020, compared to $3,588 in the previous quarter ended September 30, 2020. The increase in other expense was mainly attributed to pre-construction costs for the Rupert Facility. 

Three Months Ended December 31, 2020 compared to December 31, 2019 

Other expense increased $90,116 (593%) to $105,323 in the fourth quarter of 2020, compared to $15,207 in the same quarter in fiscal 2019. The increase in
other expense was mainly attributed to pre-construction costs for the Rupert Facility. 
 Year Ended December 31, 2020
compared to December 31, 2019 
 Other expense increased $114,470 (753%) to $129,677 for the year ended December 31, 2020, compared to
$15,207 in fiscal 2019, for the same reasons above. 
 Selected Annual Financial Information 

 

													
	 	  	As at and for the year ended December 31	 
	 	  	2020	 	  	2019	 	  	2018	 
	 Revenue
	  	$	 4,636,838	 	  	$	 999,797	 	  	$	 1,050,403	 
	 Net loss
	  	$	(13,858,800	) 	  	$	(2,341,544	) 	  	$	(398,722	) 
	 Loss per share (basic and diluted)
	  	$	(0.21	) 	  	$	(0.06	) 	  	$	(0.01	) 
	 Weighted average number of shares outstanding (basic and diluted)
	  	 	66,388,474	 	  	 	36,330,356	 	  	 	30,000,000	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total assets
	  	$	 35,182,597	 	  	$	 1,344,219	 	  	$	 125,103	 
	 Total non-current financial liabilities
	  	 	5,419,352	 	  	 	949,313	 	  	 	338,761	 
	 Total liabilities
	  	 	7,540,254	 	  	 	1,684,800	 	  	 	642,373	 
	 Share capital
	  	 	39,335,150	 	  	 	2,245,422	 	  	 	83	 
	 Deficit
	  	$	(16,717,697	) 	  	$	(2,858,897	) 	  	$	(517,353	) 

 Total assets 
 Total assets
increased to $35,182,597 as at December 31, 2020 from $1,344,219 as at December 31, 2019; primarily from $35,888,802 in proceeds received for the issuance of units and exercise of warrants and stock options.
Right-of-use assets also increased by $4,653,197 during the year as the Company continued to expand capacity at the Victoria Facility and leases acquired for the Rupert
Facility, Patterson Facility and Mount Pleasant. As of December 31, 2020, the Company had cash and cash equivalents of $25,084,083. 

  
 22 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Total liabilities 

Total liabilities increased to $7,540,254 as at December 31, 2020 from $1,684,800 as at December 31, 2019; primarily due to an increase of
$1,639,422 in accounts payable and accrued liabilities from the ramp-up of operations, and an increase of $5,143,815 in lease liabilities mainly pertaining to right-of-use assets including the Rupert Facility, Patterson Facility and Mount Pleasant. These increases were offset by a decrease of $1,021,265 in convertible debentures liability as a result of the
conversion of all outstanding debentures into common shares from the completion of a qualified financing. 
 Share Capital 

Share capital increased to $39,335,150 at the end of 2020, compared to $2,245,422 primarily due to the issuance of 26,808,076 common shares and
13,369,876 warrants exercised related to the IPO and various private placements during the year. 
 QUARTERLY RESULTS 

The following table presents certain unaudited financial information for each of the eight quarters up to and including the quarter ended
December 31, 2020. The information has been derived from our unaudited quarterly condensed interim consolidated financial statements. 
  

																					
	 2020
	  	Q1	 	 	Q2 (1)(2)	 	 	Q3 (2)	 	 	Q4	 	 	Year	 
	 Revenue
	  	$	338,552	 	 	$	1,087,790	 	 	$	1,373,814	 	 	$	1,836,682	 	 	$	4,636,838	 
	 Net loss
	  	$	(1,129,986	) 	 	$	(2,418,655	) 	 	$	(4,497,027	) 	 	$	(5,813,132	) 	 	$	(13,858,800	) 
	 Comprehensive loss
	  	$	(1,129,986	) 	 	$	(2,418,655	) 	 	$	(4,497,107	) 	 	$	(5,806,392	) 	 	$	(13,852,140	) 
	 Loss per share (basic and diluted)
	  	$	(0.02	) 	 	$	(0.05	) 	 	$	(0.06	) 	 	$	(0.06	) 	 	$	(0.21	) 
	 Number of eCommerce orders
	  	 	2,441	 	 	 	11,194	 	 	 	13,107	 	 	 	13,580	 	 	 	40,322	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

  

	(1)	 The June 30, 2020 quarterly net loss and comprehensive loss has 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. As a result of the adjustment recorded, the net loss and comprehensive loss for the three month
period ended June 30, 2020 has increased from $1,653,655 to $2,418,655 and the loss per share (basic and diluted) for the second quarter of 2020 has increased from $0.03 to $0.05. 

	(2)	 The June 30, 2020 and September 30, 2020 quarterly revenue have been restated to reflect adjustments made at
December 31, 2020 to reclass sales discounts and promotions through various programs that was previously recorded as advertising and promotion expense to a reduction of revenue. The reclassification of expense has no impact to net loss and
comprehensive loss for the quarters. As a result of the adjustments recorded, revenue for the three month period ended June 30, 2020 has decreased from $1,100,816 to $1,087,790 and revenue for the three month period ended September 30,
2020 has decreased from $1,393,234 to $1,373,814. 

  

																					
	 2019
	  	Q1	 	 	Q2	 	 	Q3	 	 	Q4	 	 	Year	 
	 Revenue
	  	$	218,956	 	 	$	222,054	 	 	$	229,921	 	 	$	328,866	 	 	$	999,797	 
	 Net loss and comprehensive loss
	  	$	(235,006	) 	 	$	(246,740	) 	 	$	(1,030,739	) 	 	$	(829,059	) 	 	$	(2,341,544	) 
	 Loss per share (basic and diluted)
	  	$	(0.00	) 	 	$	(0.01	) 	 	$	(0.03	) 	 	$	(0.02	) 	 	$	(0.06	) 
	 Number of eCommerce orders
	  	 	1,894	 	 	 	536	 	 	 	416	 	 	 	1,511	 	 	 	4,357	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

  
 23 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Revenues have increased over the last eight quarters. The sales growth has been mainly attributed to
the increase in eCommerce where we have seen a growing demand for our products online. During the third quarter of 2020, the Company started selling products through its US eCommerce website where we have seen further revenue growth. Furthermore,
the Company made significant efforts to increase production capacity in the second half of 2020 and parted with new 3PL partners that allowed for increased production footprint at the Victoria Facility. The increase in net loss and comprehensive
loss is mainly attributed to the ramping up of production to support the distribution of the Company’s products as well as higher outbound shipping and 3PL logistic services due to the scaling of eCommerce and wholesale orders through marketing
efforts. The Company also incurred higher general and administration expense due to the hiring of employees for expansion and increased office expense, recruitment fees, information technology and licensing cost with the build out of the teams in
both Victoria and Vancouver to support its next phase growth. 
 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 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 defines capital that it manages as shareholders’ equity and debt. 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. 

The following table summarizes our cash flows for the years ended December 31, 2020, and 2019:

 

									
	 	  	Year ended December 31	 
	 	  	2020	 	  	2019	 
	 Operating activities
	  	$	(9,660,481	) 	  	$	(1,432,523	) 
	 Investing activities
	  	 	(564,437	) 	  	 	(281,921	) 
	 Financing activities
	  	 	34,900,987	 	  	 	2,106,173	 
	 Effect of foreign exchange on cash and cash equivalents
	  	 	2,404	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 
	 Net changes in cash and cash equivalents
	  	$	24,678,473	 	  	$	 391,729	 
		  	  
	  
	 	  	  
	  
	 

 Operating activities 
 Net
cash used in operating activities for the year ended December 31, 2020 was $9,660,481 as a result of the net loss for the period of $13,858,800 and an increase in non-cash working capital of $1,299,564;
partially offset by non-cash expenses related to share-based compensation of $2,780,488, finance expense of $1,842,853, depreciation of $425,276, shares, units and warrants issued for services of $458,533.
During the comparative period ending December 31, 2019, net cash used in operating activities was $1,432,523 as a result of the net loss for period of $2,341,544 and an increase in non-cash working
capital of $115,668; partially offset by non-cash expenses related to shares and units issued for services of $477,500, share-based compensation of $200,933, finance expense of $173,268 and depreciation of
$161,583. 

  
 24 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Investing activities 

Net cash used in investing activities for the year ended December 31, 2020 was $564,437 relating to capital expenditures for the restaurant and
production equipment to expand production. During the comparative period ending December 31, 2019, net cash used in investing activities was $281,921 related to the restaurant and production equipment used in the Victoria Facility. 

Financing activities 
 Net cash received from financing
activities for the year ended December 31, 2020 was $34,900,987 as at result of net proceeds from the issuance of units pursuant to the IPO and additional financings, $10,863,951 received from proceeds from the exercise of warrants, $608,126
received from the exercise of stock options and $1,007,315 incurred for various deposits, loans and lease liabilities and interest paid. During the comparative period ended December 31, 2019, net cash received from financing activities was
$2,106,173 as a result of proceeds from the issuance of units of $1,839,800 and proceeds received from convertible debt of $585,116; partially offset by payment of $318,743 for various loans and lease liabilities and interest paid. 

Prospectus Offerings Use of Proceeds 
 On June 17, 2020,
the Company completed its IPO consisting of 16,100,000 common shares at $0.25 per common share for proceeds of $4,025,000. The following table provides an update on the anticipated use of proceeds raised, along with amounts expended. 

 

									
	 	  	Proposed Use of Proceeds	 	  	Approximate Use of Proceeds
to December 31, 2020	 
	 Build out of Mount Pleasant (less tenant improvement allowance)
	  	$	1,147,000	 	  	$	 39,401	 
	 Direct research and development expenses
	  	 	150,000	 	  	 	150,000	 
	 General corporate & other working capital
	  	 	2,231,000	 	  	 	2,231,000	 
	 Offering expenses and underwriter fees
	  	 	497,000	 	  	 	374,365	 
		  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	4,025,000	 	  	$	2,794,766	 
		  	  
	  
	 	  	  
	  
	 

 On August 7, 2020, the Company closed an agreement with Canaccord Genuity Corp. pursuant to which they agreed to
purchase, on a bought deal basis (the “August Bought Deal”), 6,555,000 units at $1.30 per unit, for aggregate gross proceeds to the Company of $8,521,500. The following table provides an update on the anticipated use of proceeds
raised in the financing, along with amounts expended. 
  

									
	 	  	Proposed Use of Proceeds	 	  	Approximate Use of Proceeds
to December 31, 2020	 
	 Expansion to the United States
	  	$	3,500,000	 	  	$	 423,560	 
	 Direct research and development expenses
	  	 	750,000	 	  	 	138,519	 
	 Accretive acquisitions
	  	 	1,500,000	 	  	 	—  	 
	 General corporate & other working capital
	  	 	1,739,780	 	  	 	1,739,780	 
	 Offering expenses and underwriter fee
	  	 	1,031,720	 	  	 	798,552	 
		  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	8,521,500	 	  	$	3,100,411	 
		  	  
	  
	 	  	  
	  
	 

  
 25 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 On December 4, 2020, the Company closed an agreement with Canaccord Genuity Corp. pursuant to
which they agreed to purchase, on a bought deal basis (the “December Bought Deal”), 3,778,900 units at $3.50 per unit, for aggregate gross proceeds to the Company of $13,226,150. The following table provides an update on the
anticipated use of proceeds raised in the financing, along with amounts expended. 
  

									
	 	  	Proposed Use of Proceeds	 	  	Approximate Use of Proceeds
to December 31, 2020	 
	 Commencement of operations at Rupert Facility
	  	$	10,000,000	 	  	$	1,263,857	 
	 General corporate & other working capital
	  	 	1,918,058	 	  	 	1,918,058	 
	 Offering expenses and underwriter fee
	  	 	1,308,092	 	  	 	1,298,002	 
		  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	13,226,150	 	  	$	4,479,917	 
		  	  
	  
	 	  	  
	  
	 

 Capital Resources 
 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. 
 On March 9, 2021, the Company announced that it has executed a non-binding term sheet (the “Term Sheet”) with a prominent institutional lender for a committed $70 million senior secured credit facility (the “Credit Facility”). Upon closing
the proposed financing, VERY GOOD will have access to a senior secured $20 million revolving line of credit and a $50 million asset backed term loan. All amounts drawn under the Credit Facility will pay interest at a rate of 9.95% per
annum and will be repaid in full upon maturity. The Credit Facility proposed will have a term of 24 months with an option to renew, upon mutual consent, for another 12 months and will be primarily secured by the Company’s current and planned
production equipment.
 OUTSTANDING SHARES, OPTIONS, AND WARRANTS

The Company is authorized to issue an unlimited number of common shares. The table below outlines the number of issued and outstanding common shares,
warrants and options as at the dates indicated.
  

													
	 	  	As at April 26	 	  	As at December 31	 	  	As at December 31	 
	 	  	2021	 	  	2020	 	  	2019	 
	 Common shares
	  	 	97,599,957	 	  	 	96,640,432	 	  	 	45,515,339	 
	 Warrants
	  	 	2,402,251	 	  	 	2,889,367	 	  	 	7,757,670	 
	 Stock options
	  	 	8,213,472	 	  	 	3,852,639	 	  	 	1,513,500	 

 Common Shares 
 Common shares
increased by 51.1 million during the year due to the following transactions: 
  

	 	•	 	 16.1 million shares issued for the June 17, 2020 IPO 

 

	 	•	 	 10.3 million shares issued for prospectus offerings on August 7, 2020 and December 4, 2020

  

	 	•	 	 0.4 million shares for private placements on August 13, 2020 and December 4, 2020 

 

	 	•	 	 0.4 million shares for finder fees associated with the IPO, prospectus offerings and private placements

  

	 	•	 	 7.5 million shares issued pursuant to the conversion of convertible debentures 

 

	 	•	 	 15.7 million shares for warrants and warrants exercised 

 

	 	•	 	 0.2 million shares issued for executive management services with a former CFO 

 

	 	•	 	 0.5 million shares issued for settlement of debt 

  
 26 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Warrants 

Warrants decreased 4.9 million from 7.8 million warrants in 2019 to 2.9 million warrants in 2020 due to: 

 

	 	•	 	 13.4 million warrants exercised during the year 

 

	 	•	 	 5.4 million warrants issued associated with the IPO, prospectus offerings and private placements

  

	 	•	 	 2.9 million warrants issued to agents associated with the IPO, prospectus offerings and private placements

  

	 	•	 	 0.2 million warrants issued for executive management services with a former CFO and COO 

Stock Options 
 Stock Options increased 2.3 million
during the year due to: 
  

	 	•	 	 4.8 million stock options granted to directors, officers, employees and consultants 

 

	 	•	 	 2.4 million stock options exercised during the year 

 

	 	•	 	 0.1 million stock options cancelled or forfeited during the year 

OFF-BALANCE SHEET AGREEMENTS

The Company does not have any off-balance sheet arrangements such as obligations under guarantee contracts, a
retained or contingent interest in assets transferred to an unconsolidated entity, any obligation under derivative instruments or any obligation under a material variable interest in an unconsolidated entity that provides financing, liquidity,
market risk or credit risk support to the Company or engages in leasing or hedging services with the Company. 
 FINANCIAL RISK MANAGEMENT

The Company is exposed to varying degrees to a variety of financial related risks in the normal course of operations including interest rate risk, credit
risk, liquidity risk, foreign currency risk, commodity price risk and economic dependence risk. The Board approves and monitors the risk management processes, inclusive of counterparty limits, controlling and reporting structures. 

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 December 31, 2020, the Company had cash and cash equivalents of $25,084,083 and a 1% change in interest rates would increase or decrease interest income by $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 Company’s cash and unrestricted short-term investments 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 a GST receivable. At December 31, 2020, the Company has $43,153 in trade accounts receivable outstanding over 60 days, of which the Company has recognized an allowance for doubtful accounts of $39,917.
Of the total billed trade receivables at December 31, 2020, the Company has subsequently collected or has trade payables outstanding with the same customers representing 32.5% of the total balance. 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 December 31, 2020, this amounted to $26,826,938. 

  
 27 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 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 18% of total revenue during the year ended December 31, 2020. Of the Company’s trade receivables outstanding at December 31, 2020, 81%
are held with 3 customers of the Company. 
 Liquidity Risk 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity risk
by reviewing on an ongoing basis its capital requirements. As at December 31, 2020, the Company has $25,084,083 of cash and cash equivalents. The Company is obligated to pay accounts payable and accrued liabilities and the current portion of
the lease liabilities with a carrying amount of $2,018,663.
 The following are the contractual maturities of financial obligations: 

 

																									
	 Contractual Obligations as at December 31,
2020
	  	Carrying
amount	 	  	Contractual
cash flow	 	  	Less than
1 year	 	  	1-3 years	 	  	4-5 years	 	  	More than
5 years	 
	 Accounts payables and accrued liabilities
	  	$	1,871,728	 	  	$	 1,871,728	 	  	$	1,871,728	 	  	$	 —  	 	  	$	 —  	 	  	$	 —  	 
	 Loan payable
	  	 	30,000	 	  	 	30,000	 	  	 	—  	 	  	 	30,000	 	  	 	—  	 	  	 	—  	 
	 Lease liabilities
	  				  				  				  				  				  			
	 Retail and production facilities
	  	 	5,460,099	 	  	 	11,894,631	 	  	 	767,682	 	  	 	1,686,567	 	  	 	1,653,329	 	  	 	7,787,053	 
	 Equipment
	  	 	56,623	 	  	 	59,304	 	  	 	53,004	 	  	 	6,300	 	  	 	—  	 	  	 	—  	 
	 Vehicles
	  	 	19,565	 	  	 	24,902	 	  	 	8,435	 	  	 	16,156	 	  	 	311	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total Contractual Obligations
	  	$	7,438,015	 	  	$	13,880,565	 	  	$	2,700,849	 	  	$	1,739,023	 	  	$	1,653,640	 	  	$	7,787,053	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Foreign Currency Risk
 The
Company’s financial results are subject to volatility as a result of foreign exchange fluctuations. The Company has sales outside of Canada that are transacted in currencies other than Canadian dollar whereas the majority of its expenses are in
Canadian dollar. As a result, fluctuation in the foreign exchange rate of these currencies can have a material impact on the financial condition and operating results. 

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 December 31, 2020, a 10% appreciation of the Canadian dollar relative to the US dollar would have increased net financial assets by approximately $102,312 (December 31, 2019 – $nil). A 10% depreciation of
the Canadian dollar relative to the US dollar would have had the equal but opposite effect.
 Commodity 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. 

  
 28 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 Equity Price Risk 

In recent years, securities markets have experienced extremes in price and volume volatility. The market price of securities of many early stage
companies, among others, have experienced fluctuations in price which may not necessarily be related to the operating performance, underlying asset values or prospects of such companies. It may be anticipated that any market for the Company’s
shares will be subject to market trends generally and the value of the Company’s shares on a stock exchange may be affected by such volatility. 
 Fair Value
of Financial Instruments 
 As at December 31, 2020 and 2019, the estimated fair values of cash and cash equivalents, accounts receivable,
deposits, accounts payable and accrued liabilities and loan payable approximated their respective carrying values due to their short-term nature. 
 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 and directors. Compensation expense was as follows: 
  

									
	 	  	Year ended December 31	 
	 	  	2020	 	  	2019	 
	 Salaries incurred to key management personnel*
	  	$	,564,966	 	  	$	 95,027	 
	 Professional fees incurred to the former Chief Financial officer (“former CFO”)**
	  	 	159,437	 	  	 	84,844	 
	 Share-based compensation
	  	 	676,078	 	  	 	179,227	 
		  	  
	  
	 	  	  
	  
	 
		  	$	2,400,481	 	  	$	359,098	 
		  	  
	  
	 	  	  
	  
	 

  

	*	 The balance for the year ended December 30, 2020 includes $287,230 paid by the issuance of a total of 165,000
warrants, which have exercise prices ranging between $1.51 per share and $7.60 per share, with expiry dates ranging between August 13, 2021, and December 21, 2021. 

 

	**	 The balance for the year ended December 30, 2020 includes $25,001 paid by the issuance of 166,670 units. Each
unit consists of one common share and one-half of share purchase warrant exercisable at a price of $0.30 per share for a period of 12 months from issuance, subject to early acceleration in certain
circumstances. 

 The following is a summary of the significant related party balances: 

 

									
	 	  	Year ended December 31	 
	 	  	2020	 	  	2019	 
	 Due from the Chief Executive Officer (“CEO”) and Director
	  	$	—  	 	  	$	18,722	 
	 Due from the Chief Research and Development Officer (“CRADO”) , and Director
	  	 	—  	 	  	 	5,558	 
	 Due from related parties*
	  	$	 —  	 	  	$	24,280	 
	 Due to the former CFO, included in accounts payable and accrued liabilities*
	  	$	 —  	 	  	$	 3,413	 
	 Prepaid professional fees for the former CFO, included in prepaids and deposits
	  	$	 —  	 	  	$	 5,815	 

  

	*	 The amounts due to (from) related parties are unsecured,
non-interest bearing and have no fixed terms of repayment. 

  
 29 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 On February 11, 2020, the Company entered into a loan agreement with the CEO and the CRADO of the
Company (the “Lenders”), whereby the Lenders agreed to loan the Company up to a maximum aggregate loan amount of $1,200,000 (the “Principal”), in three equal tranches of $400,000. The outstanding amount of the
Principal matures on May 11, 2021, and bears interest from and after the date of each advance until repayment at the rate of 0.67% per month, simple interest. The Company also executed a general security agreement with the Lenders, which
creates a security interest over all present and after acquired property of the Company. The Company received one tranche of $400,000 on February 11, 2020. On June 22, 2020, the Company repaid the principal balance of $400,000 and interest
of $11,728. 
 CRITICAL ACCOUNTING ESTIMATES 
 The
preparation of the annual consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.
 Significant
assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that
actual results differ from assumptions made, relate to, but are not limited to, the following:
  

	 	•	 	 The inputs, including the forecast future volatility of the stock price, the risk-free interest rate, dividend yield and
the expected life of the stock options, used in calculating the fair value for share-based compensation expense included in comprehensive loss.

  

	 	•	 	 The valuation of shares and other equity instruments issued in non-cash
transactions. When non-cash transactions are entered into with employees and those providing similar services, the non-cash transactions are measured at the fair value
of the consideration given up using market prices.

  

	 	•	 	 Amortization of right-of-use assets and
property and equipment are dependent upon the estimated useful lives, which are determined through the exercise of judgement. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account
factors such as economic and market conditions and the useful lives of assets.

  

	 	•	 	 Inventory is carried at the lower of cost or net realizable value. The determination of net realizable value involves
significant management judgement and estimates, including the estimation of future market demand, costs and prices. 

 CHANGES IN ACCOUNTING
POLICIES
 Effective for the year ended December 31, 2020, the Company elected to change its accounting policy for the presentation of
expenses on its consolidated statements of net loss and comprehensive loss from the “nature of expense” method do the “function of expense” basis. The Company believes that the revised presentation provides more relevant
financial information to users of the consolidated financial statements. Please refer to Note 3 of the consolidated financial statements for a summary of the impacts to the consolidated statement of net loss and comprehensive loss. 

  
 30 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

 RISKS AND UNCERTAINITIES 

Many factors could cause the Company’s actual results, performance and achievements to differ materially from those expressed or implied by the
forward-looking information, including without limitation, the following factors, which are discussed in greater detail in our filings with Canadian regulatory authorities at www.sedar.com, including our Annual Information Form. 

 

	 	•	 	 The global spread and unprecedented impact of COVID-19 continues to create
significant volatility, uncertainty and economic disruption. The specific impacts that we may experience as a result of COVID-19 include disruptions to our operations and lost revenue if a significant number
of our employees are asked to self-isolate and are unable to work or if we are required to temporarily suspend production as a result of an outbreak of COVID-19. Overall, the ongoing effects of COVID-19 could have a material adverse impacts on our business, results of operations, financial condition, and cash flows and may adversely impact the price of our Common Shares. 

 

	 	•	 	 Any substantial delays in bringing the Rupert Facility up to full production on our current schedule will affect our
production capacity, our ability to meet demand for our products and expand distribution, all of which would negatively impact our ability to achieve our growth goals, financial performance and the price of our Common Shares. Similarly, delays in
the construction of Mount Pleasant will prevent us from opening our second flagship store and launching the innovation centre within our current timeframe. Further, our failure to successfully commission, or any substantial delays in our current
schedule for commissioning the California Facility, will have a negative impact on our US expansion plans. Even if we are able to establish these facilities as planned and on schedule, we may not realize all of the operational and financial benefits
we expect to receive. 

  

	 	•	 	 We will require significant capital for the build-out and equipping of our
Rupert Facility, Patterson Facility and Mount Pleasant, and for funding product development and innovation, potential acquisitions, marketing and other corporate initiatives. Unanticipated costs may also arise and our overall future capital
requirements may vary due to the occurrence of unforeseen factors. We had negative cash flow from operating activities of $9,660,481 and $1,432,523 for the fiscal years ended December 31, 2020 and 2019, respectively, and will require additional
equity or debt financing to operate and expand our business. If such financing is not available to us, or is not available on satisfactory terms, our ability to operate and expand our business or respond to competitive pressures would be curtailed
or severely limited and we may need to delay, limit or disregard expansion plans, elements of our growth strategy or operations. Our inability to secure sufficient funding could have a material adverse effect on our business, financial condition,
results of operations. In addition, the issuance of Common Shares pursuant to any equity financing may affect the value of our Common Shares and could result in dilution to our Shareholders. 

 

	 	•	 	 We have experienced net losses since incorporation. For the fiscal years ended December 31, 2020 and 2019 we
incurred net losses of $13,858,800 and $2,341,544, respectively. We anticipate that our operating expenses and capital expenditures will increase substantially in the foreseeable future as we continue to invest to expand our production capacity,
increase our customer base, supplier and distributor network, hire additional employees, scale our R&D efforts and introduce new products in the market, pursue expansion to other jurisdictions, and ramp-up
our marketing programs to build brand awareness. Our expansion efforts may prove more expensive than anticipated, and we may not succeed in increasing sales and margins sufficiently to offset the anticipated higher expenses. Accordingly, we may not
be able to achieve or sustain profitability, and we may incur significant losses for the foreseeable future. 

  

	 	•	 	 The loss of some or all of our management team or other key personnel, including the directors and managers of key
functional areas, could negatively affect our ability to develop and pursue our growth strategy, which could adversely affect our business and financial condition. Any departures of senior management could also be viewed in a negative light by
investors, which could cause the market price of our Common Shares to decline. 

  
 31 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

	 	•	 	 We face intense competition in the plant-based food industry as new entrants and more traditional food companies vie for
market share in this rapidly evolving market. Most of our competitors are, and many of our potential competitors may be, larger, and may have greater brand recognition, greater presence in both the retail and online marketplace and access to greater
financial, marketing and other resources. Therefore, these competitors may be able to devote greater resources to the marketing and sale of their products, generate greater brand recognition or adopt more aggressive pricing policies and distribution
methods than we can. As a result, we may lose market share, which could reduce our revenue and adversely affect our results of operations. There is no assurance that we will continue to compete successfully against existing or future competitors.

  

	 	•	 	 A number of the ingredients in our products, such as vegetables, beans and vital wheat gluten derived from wheat flour,
are vulnerable to adverse weather conditions and natural disasters, such as floods, droughts, frosts, earthquakes, hurricanes and pestilence which may reduce their available supply. We also compete with other food producers in the procurement of
ingredients, and as consumer demand for plant-based protein products increases, this competition may increase. If supplies of quality ingredients are reduced or there is greater demand for such ingredients, we may not be able to obtain sufficient
supply on favourable terms, or at all, or if we are unable to secure long-term supply agreements, this could impact our ability to meet demand for our products which may adversely affect our business, results of operations and financial condition.

  

	 	•	 	 There is risk in our ability to effectively scale production processes and effectively manage our supply chain
requirements. If we do not accurately align our production capabilities and inventory supply with demand, our business, financial condition and results of operations may be materially adversely affected. 

 

	 	•	 	 We have grown rapidly since inception and in particular since completing the IPO, which growth has placed significant
demands on our management, financial, operational, and other resources. The anticipated growth and expansion of our business and our product offerings will continue to place considerable demands on our management and operations teams and require
substantial additional resources to meet our needs, which may not be available in a cost-effective manner, or at all. If we do not effectively manage our growth, we may not be able to execute on our business plan, respond to competitive pressures,
take advantage of market opportunities, satisfy customer requirements or maintain high-quality product offerings, any of which could harm our business, brand, results of operations and financial condition. 

 

	 	•	 	 Our acquisition strategy could require significant management attention, disrupt our business and harm our business,
financial condition and results of operations. To pay for any such acquisitions, we would have to use cash, incur debt, or issue debt or equity securities, each of which may affect our financial condition or the value of our Common Shares and could
result in dilution to our Shareholders. 

  

	 	•	 	 Our use of third-party providers for fulfillment is subject to risks, including but not limited to, labour disruptions,
human error and shipment delays. Any unanticipated changes in our third-party providers, such as a result of a strike or other stoppages, could result in logistical difficulties that could adversely impact deliveries and we may incur costs and
expend resources in connection with such change. 

  

	 	•	 	 We are subject to risks that affect the food industry in general, including the risks posed by food spoilage, accidental
contamination, foodborne illness, product tampering, consumer product liability, and the potential costs and disruptions of a product recall. Any product safety issue could subject us to product liability and negligence claims, including consumer
class action lawsuits, adverse publicity and government scrutiny, investigation or intervention, resulting in increased costs and decreased sales. Any claims brought against us may exceed or be outside the scope of our existing or future insurance
policy coverage or limits. Any of these events could have a material adverse impact on our business, financial condition and results of operations. 

  

	 	•	 	 Real or perceived quality or food safety concerns or failures to comply with applicable food regulations and
requirements, whether or not ultimately based on fact and whether or not involving us (such as incidents involving our competitors), could cause negative publicity and reduced confidence in our Company, brand or products, or the industry as a whole,
which could in turn harm our reputation and sales, and could materially adversely affect our business, financial condition and operating results. 

  
 32 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

	 	•	 	 Any loss of confidence on the part of consumers in the ingredients used in our products or in the safety and quality of
our products would be difficult and costly to overcome. Issues regarding the safety of any of our products, regardless of the cause, may have a substantial and adverse effect on our brand, reputation and operating results. 

 

	 	•	 	 We could be required to recall certain or a large portion of our products, including in the event of contamination or
adverse test results or as a precautionary measure. A product recall could result in significant losses due to its costs, destruction of product inventory and lost sales due to the unavailability of the product or potential loss of current or new
customers as a result of an adverse impact on our reputation. 

  

	 	•	 	 We rely on unpatented proprietary expertise, recipes and formulations and other trade secrets to develop and maintain
our competitive position. If we do not keep our trade secrets confidential, others may produce products with our recipes or formulations. Further, we currently own no patents or exclusive intellectual property rights in processes used for our
products. As a result, our current and future competitors may be able to create and sell products similar to ours. 

  

	 	•	 	 We rely on trademark registrations and common law trademark and copyright rights to protect the distinctiveness of our
brand. Current and future trademarks not yet registered may not be approved, or may be refused, and ultimately not registered. Failure to protect our trademark rights could prevent us in the future from challenging third parties who use names and
logos similar to our trademarks, which may in turn cause consumer confusion or negatively affect consumers’ perception of our brand and products. 

  

	 	•	 	 The products sold in our wholesale program are sold through food distributors who sell and deliver our products to
retailers. The loss of one or more significant distributors, if we are unable to replace the distributor in a timely manner, could negatively affect our business, results of operations and financial condition. 

 

	 	•	 	 Maintaining and enhancing our current brand image and awareness or any future brands we develop or acquire may require
us to make investments in areas such as public relations and marketing. These investments may be substantial, and our efforts may not ultimately be successful. 

 

	 	•	 	 Our brand image and reputation may be impacted by actions taken by our employees, product attributes (including food
safety and quality assurance issues that may result in recalls) and negative commentary or reviews. Brand value is based on perceptions of subjective qualities, and any incident that erodes the loyalty of consumers, including adverse publicity,
governmental investigation or litigation, could significantly reduce the value of our brand and adversely affect our business, results of operations and financial condition. Negative publicity about us, our brands or our products on social or
digital media could seriously damage our brands and reputation. 

  

	 	•	 	 Our facilities are vulnerable to disruption from natural disasters, extreme and/or unusual weather, global health crises
and disease outbreaks (including COVID-19), and other unexpected events. These events could cause disruptions in our operations and those of our third-party partners, including our suppliers. Any such
disruption or unanticipated event may cause significant interruptions or delays in our business and the reduction or loss of inventory may render us unable to fulfill customer orders in a timely manner, or at all which would adversely affect our
business, results of operations and financial condition. 

  

	 	•	 	 Our future growth depends, in part, on our expansion efforts outside of Canada. Failure to develop new markets outside
of Canada (through our eCommerce store or otherwise) may harm our business, growth and results of operations and could cause the market price of our Common Shares to decline. 

 

	 	•	 	 Our products are subject to regulations governing their labeling, marketing and advertising. If regulators determine
that the labeling of any of our products is not in compliance with applicable law or regulations in Canada or other jurisdictions, we could be subject to civil remedies or penalties, such as fines, injunctions, recalls or seizures, warning letters,
restrictions on the marketing or manufacturing of the products, or refusals to permit the import or export of products, as well as potential criminal sanctions. We could also become subject to third-party claims, because of any violations of, or
liabilities under, such requirements, including any competitor or consumer challenges relating to compliance with such requirements. Such claims could include challenges to our label or labeling claims that, if successful, could require us to make
labeling changes and/or pay monetary damages. Any change in labeling or packaging 

  
 33 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

	 	 requirements for our products may lead to an increase in costs or interruptions in production, either of which could adversely affect
our operations and financial condition. New or revised government laws and regulations could result in additional compliance costs and, in the event of non-compliance, civil remedies, including fines,
injunctions, withdrawals, recalls or seizures and confiscations, as well as potential criminal sanctions, any of which may adversely affect our business, results of operations and financial condition. 

 

	 	•	 	 Our growth in part depends on our ability to develop and market new products and improvements to our existing products
that appeal to consumer preferences. Failure to develop and successfully market and sell new products will inhibit our growth, sales and profitability. 

  

	 	•	 	 Our success, and our ability to increase revenue and operate profitably, depends in part on our ability to acquire new
customers and retain existing customers across our distribution channels. We may fail to acquire or retain customers due to a variety of factors including negative value and quality perceptions, a lack of new and relevant products or failure to
deliver customers’ orders in a timely manner. 

  

	 	•	 	 We could be affected by other adverse developments in the relationship with one or more large customers including the
loss thereof, the reduction of purchasing levels or the cancellation of any business from large customers for an extended period of time which could have a material adverse effect on our business, financial condition and results of operations.

  

	 	•	 	 Our failure to properly price our products could have a material adverse effect on the Company’s financial
condition and results of operations. 

  

	 	•	 	 We are subject to employment, health and safety, cyber and data security, privacy, environmental, tax, advertising,
competition and other laws, and regulation by government agencies such as Health Canada and the Canadian Food Inspection Agency who regulate various aspects of our products, including food safety standards, preventive controls plans, traceability
and current good manufacturing practices. Failure by us to comply with applicable laws and regulations and permits and licenses could subject us to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal
sanctions, which could have a material adverse effect on our financial condition and results of operations. 

  

	 	•	 	 The regulatory environment in which we operate could change significantly in the future. Enforcement of existing laws
and regulations, changes in legal requirements and/or evolving interpretations of existing regulatory requirements may result in increased compliance costs and create other obligations, financial or otherwise, that could adversely affect our
business, financial condition or results of operations. 

  

	 	•	 	 The failure of our information technology systems to operate effectively could adversely affect our business. A
disruption to our eCommerce business could reduce our eCommerce revenue, increase our costs, diminish our growth prospects, expose us to litigation, decrease customer confidence and damage our brand, and a material interruption to any of our
computer systems could adversely affect our business or results of operations and our reputation. Any compromise of our security or accidental loss or theft of customer or employee data in our possession could result in a violation of applicable
privacy and other laws, significant legal and financial exposure and damage to our reputation, which could adversely impact our business, financial condition, results of operations and the price of our Common Shares. 

 

	 	•	 	 Litigation and other claims against us could result in unexpected expenses and liabilities, which could materially
adversely affect our operations, our reputation and the market price of our Common Shares. 

  

	 	•	 	 As climate change accelerates, its impacts are becoming more widespread and unpredictable. The incidence and impact of
severe weather-related events, long term changes in weather patterns that lead to extreme weather and natural disasters including flooding and drought, may have a negative effect on 

  
 34 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

	 	 
agricultural productivity, which may result in decreased availability or less favourable pricing for some or many of the ingredients in our products such as such as legumes and vegetables.

  

	 	•	 	 There is no guarantee that our insurance coverage will be sufficient, or that insurance proceeds will be paid to us on a
timely basis. In addition, there are types of losses we may incur but against which we cannot be insured or which we believe are not economically reasonable to insure. 

 

	 	•	 	 The issuance of additional Common Shares, or securities convertible into Common Shares, under any equity financing or
pursuant to any equity-based compensation plans, may have a dilutive effect on the interests of Shareholders. 

  

	 	•	 	 We lease all of our facilities and accordingly are subject to all of the risks associated with leasing, occupying and
making tenant improvements to real property, including adverse demographic and competitive changes affecting the location of the property and changes in availability of and contractual terms for leasable commercial and retail space. We also have
significant financial obligations under the leases we have entered into and if we are not able to meet our lease obligations, this could have a material adverse effect on our financial condition and business. 

 

	 	•	 	 Consumer trends could change based on a number of possible factors, including economic factors and social trends. If
consumer demand for our products decreases, our business and financial condition would suffer. 

  

	 	•	 	 The global economy can be negatively impacted by a variety of factors such as the spread or fear of spread of contagious
diseases (such as COVID-19), man-made or natural disasters, actual or threatened war, terrorist activities, political unrest, civil unrest, and other geopolitical
uncertainty. Prolonged unfavourable economic conditions or uncertainty may have an adverse effect on our business and financial condition. 

  

	 	•	 	 As we expand our operations, unions may attempt to organize all or part of our employee base. Responding to such
organization attempts may divert the attention and efforts of management and employees and may have a negative financial impact on our business. Protracted and extensive work stoppages or labour disruptions such as strikes or lockouts could have a
material adverse effect on our business, financial condition and results of operations. 

  

	 	•	 	 If we obtain status as a Certified B Corporation our reputation could be harmed if we lose such status, whether by our
choice or by our failure to meet B Lab’s certification requirements, if that change in status were to create a perception that we are more focused on financial performance and are no longer as committed to the values shared by Certified B
Corporations. 

  

	 	•	 	 If our ESG practices do not meet third-party benchmarks or scores we may lose investment from certain Shareholders and
our business and reputation could be negatively impacted and the price of our Common Shares could be materially and adversely affected. 

  

	 	•	 	 We are party to contracts, transactions and business relationships with various third parties, pursuant to which such
third parties have performance, payment and other obligations to us. If any of these third parties were to become subject to bankruptcy, receivership or similar proceedings, our rights and benefits in relation to our contracts, transactions and
business relationships with such third parties could be terminated, modified in a manner adverse to us, or otherwise impaired. 

  

	 	•	 	 Changes in accepted accounting principles and related accounting pronouncements, implementation guidelines or their
interpretation or changes in underlying assumptions, estimates or judgments could significantly change our reported financial performance or financial condition in accordance with generally accepted accounting principles. 

 

	 	•	 	 The market price of our Common Shares could be subject to significant fluctuations which could materially reduce the
market price of our Common Shares regardless of our operating performance. 

  

	 	•	 	 We cannot predict the size of future issuances of our Common Shares or the effect, if any, that future issuances and
sales of our Common Shares will have on the market price of our Common Shares. Sales 

  
 35 

 The Very Good Food Company | Management’s Discussion and Analysis 

 

	 	 
of substantial amounts of our Common Shares, or the perception that such sales could occur, may adversely affect prevailing market prices for our Common Shares. 

 

	 	•	 	 We currently expect to retain all available funds for use in the operation and growth of our business and do not
anticipate paying any cash dividends in the foreseeable future. 

 BOARD APPROVAL 

The Board of Directors oversees management’s responsibility for financial reporting and internal control systems through an Audit Committee. This
Committee meets periodically with management and annually with the independent auditors to review the scope and results of the annual audit and to review the financial statements and related financial reporting and internal control matters before
the financial statements are approved by the Board of Directors and submitted to the shareholders of the Company.
 The Board of Directors of the
Company has approved the financial statements and the disclosure contained in this MD&A.
 CONTROLS CERTIFICATION

In connection with National Instrument 52-109 Certification of Disclosure in Issuer’s Annual and Interim
Filings (“NI 52-109”), the Chief Executive Officer and Chief Financial Officer, will file a Venture Issuer Basic Certificate with respect to the financial information contained in
unaudited interim financial statements and the audited annual financial statements and respective accompanying Management’s Discussion and Analysis. The Venture Issuer Basic Certification does not include representations relating to the
establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109. 

  
 36 

 

 
 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.comEX-4.4

 Exhibit 4.4 
  

 
 ANNUAL INFORMATION FORM 

THE VERY GOOD FOOD COMPANY INC. 
 For the
fiscal year ended December 31, 2020 
 June 10, 2021 

 TABLE OF CONTENTS 
  

					
	 ANNUAL INFORMATION FORM
	  	 	3	 
	 FORWARD-LOOKING INFORMATION
	  	 	3	 
	 CORPORATE STRUCTURE
	  	 	6	 
	 Incorporation and Head Office
	  	 	6	 
	 Intercorporate Relationships
	  	 	6	 
	 DEVELOPMENT OF OUR BUSINESS
	  	 	6	 
	 History & Mission
	  	 	6	 
	 Three-Year History
	  	 	7	 
	 DESCRIPTION OF THE BUSINESS
	  	 	10	 
	 Overview
	  	 	10	 
	 Distribution Channels
	  	 	11	 
	 Ingredient Supply
	  	 	12	 
	 Product Innovation
	  	 	12	 
	 Seasonality
	  	 	12	 
	 Competitive Conditions
	  	 	12	 
	 Regulatory Environment and Food Safety
	  	 	12	 
	 Employees
	  	 	13	 
	 Intellectual Property
	  	 	13	 
	 CORPORATE RESPONSIBILITY
	  	 	13	 
	 RISK FACTORS
	  	 	14	 
	 Risks Relating to our Business and Industry
	  	 	14	 
	 Risks Relating to our Common Shares
	  	 	15	 
	 DESCRIPTION OF CAPITAL STRUCTURE
	  	 	27	 
	 DIVIDEND POLICY
	  	 	27	 
	 MARKET FOR COMMON SHARES
	  	 	28	 
	 Trading Price and Volume
	  	 	28	 
	 Prior Sales
	  	 	28	 
	 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER
	  	 	30	 
	 DIRECTORS AND OFFICERS
	  	 	31	 
	 AUDIT COMMITTEE
	  	 	33	 
	 PROMOTERS
	  	 	34	 
	 LEGAL PROCEEDINGS AND REGULATORY ACTIONS
	  	 	35	 
	 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
	  	 	35	 
	 TRANSFER AGENT AND REGISTRAR
	  	 	35	 
	 MATERIAL CONTRACTS
	  	 	35	 
	 INTERESTS OF EXPERTS
	  	 	35	 
	 ADDITIONAL INFORMATION
	  	 	36	 
	 APPENDIX A – AUDIT COMMITTEE CHARTER
	  	 	37	 

  
 2 

 THE VERY GOOD FOOD COMPANY INC. 

ANNUAL INFORMATION FORM 
 Unless otherwise
noted or the context otherwise indicates, the “Company”, “VERY GOOD’’, “us”, “we” or “our’’ refer to The Very Good Food Company Inc. and its subsidiaries.

 Unless otherwise specified or the context otherwise requires, all information provided in this annual information form (the “Annual
Information Form” or “AIF”) is given as at December 31, 2020. All references to ‘‘$’’ or “dollars” are to Canadian dollars. Amounts are stated in Canadian dollars unless otherwise
indicated. Certain totals, subtotals and percentages throughout this Annual Information Form may not reconcile due to rounding. 
 This Annual
Information Form contains certain trademarks held by the Company, such as The Very Good Food Co.TM, The Very Good ButchersTM, and We
Butcher BeansTM, which are protected under applicable intellectual property laws and are our property. Solely for convenience, our trademarks and trade names referred to in this Annual
Information Form may appear without the TM symbol, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights
to these trademarks and trade names. 
 FORWARD-LOOKING INFORMATION 

This Annual Information Form contains “forward-looking information’’ within the meaning of applicable securities laws in Canada.
Forward-looking information may relate to anticipated events or results and may include information regarding our financial position, business strategy, growth plans, budgets, operations, financial results, taxes, dividend policy, plans and
objectives. Particularly, information regarding our expectations of future results, performance, achievements, prospects or opportunities or the markets in which we operate is forward-looking information. In some cases, forward-looking information
can be identified by the use of forward-looking terminology such as “plans’’, “targets’’, “expects’’ or “does not expect”, “is expected’’, “an opportunity exists’’,
“budget’’, “scheduled’’, “estimates”, “outlook”, “forecasts’’, “projection’’, “prospects’’, “strategy’’, “intends’’,
“anticipates’’, “does not anticipate’’, “believes’’, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”,
“might”, “will’’, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or
circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances.

 Discussions containing forward-looking information may be found, among other places, under “Development of our Business”,
“Description of the Business” and “Risk Factors’’. 
 In particular and without limitation, this AIF contains forward-looking
information includes, among other things, statements relating to: 
  

	 	•	 	 the impact of the COVID-19 pandemic
(“COVID-19”) and its impacts on our business; 

  

	 	•	 	 our business strategy and growth plans; 

 

	 	•	 	 our capital expenditures and operations; 

 

	 	•	 	 the anticipated production volume capacities of the Rupert Facility (as defined in this AIF), the Patterson Facility (as
defined in this AIF) and the Fairview Facility (as defined in this AIF), and the Company’s ability to scale and increase production output and the timing thereof; 

 

	 	•	 	 expectations regarding the number of production lines and numbers of SKUs to be produced at the Rupert Facility and the
Patterson Facility; 

  

	 	•	 	 timing for the commencement of food production at the Patterson Facility and on the second production line at the Rupert
Facility; 

  
 3 

	 	•	 	 the Company’s ability to increase wholesale distribution in Canada and in the United States; 

 

	 	•	 	 plans for, and the anticipated timing of, an eCommerce sales launch in the United Kingdom and in the European Union;

  

	 	•	 	 plans for and the anticipated benefits of VERY GOOD’s product innovation centre at Mount Pleasant including the
ability to rapidly introduce new creative products into the market; 

  

	 	•	 	 the anticipated timing for opening of the Mount Pleasant flagship butcher shop; 

 

	 	•	 	 the Company’s commitment to corporate responsibility; 

 

	 	•	 	 the Company’s ability to become a “Certified B Corporation”; 

 

	 	•	 	 VERY GOOD’s acquisition strategy; 

 

	 	•	 	 plans for, and the timing of, the launch of The Very Good Cheese Co. brand in the second quarter of 2021 and the
Company’s new “Butcher’s Select” gluten-free line of products in the third quarter of 2021; 

  

	 	•	 	 expectations regarding the scaling of the Company’s retail network to a target of greater than 3,000 retail stores
and 15,000 points of distribution by the end of 2021 in Canada and the United States; 

  

	 	•	 	 the ability to complete over 5,000 eCommerce orders per week; 

 

	 	•	 	 the ongoing discussions with major US retailer banners regarding the distribution of the Company’s products;

  

	 	•	 	 the Company’s plans to obtain sustainability certifications and be both carbon and plastic neutral in the future;

  

	 	•	 	 the expected timing for non-GMO certification; 

 

	 	•	 	 expectations regarding our ability to use the Victoria Butcher Shop & Restaurant as a template for the opening
of additional locations across North America; 

  

	 	•	 	 continuing to strategically register trademarks; and 

 

	 	•	 	 expectations regarding the Credit Facility (as defined in this AIF). 

Forward-looking information is based on our opinions, estimates and assumptions in light of our experience and perception of historical trends, current
conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no
assurance that the underlying opinions, estimates and assumptions will prove to be correct. Certain assumptions in respect of the impact of COVID-19; no material deterioration in general business and economic
conditions; no material fluctuations of interest rates and foreign exchange rates; continued strong demand for our products; planned capital projects such as Mount Pleasant, the Patterson Facility, the Rupert Facility and the construction, costs,
schedules, approvals and anticipated benefits relating thereto; the availability of sufficient capital to fund capital requirements associated with existing operations and capital projects; the ability to obtain necessary equipment, production
inputs and labour; growth plans; the ability to retain senior management and other key personnel; the competitive environment conditions and our ability to position VERY GOOD competitively; the execution of our business strategy and growth plans and
the impact thereof; future performance including future financial objectives; and food safety and regulatory compliance are all material assumptions made in preparing forward-looking information and management’s expectations. 

Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that we considered appropriate and reasonable as of
the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed
or implied by such forward-looking information, including but not limited to the following risk factors described in greater detail under the heading entitled ‘‘Risk Factors’’ in this Annual Information Form: 

 

	 	•	 	 the impacts of the ongoing COVID-19 pandemic; 

 

	 	•	 	 our potential failure to successfully establish, or potential disruptions at, our facilities; 

 

	 	•	 	 our need for significant additional funding and our negative cash flow from operations; 

 

	 	•	 	 risks relating to the Credit Facility; 

 

	 	•	 	 our history of losses; 

  

	 	•	 	 the loss of members of our management team or other key personnel; 

 

	 	•	 	 the highly competitive nature of the plant-based industry; 

  
 4 

	 	•	 	 limited or disrupted supply of raw materials including key ingredients; 

 

	 	•	 	 inability to scale production and manage our supply chain; 

 

	 	•	 	 the rapid growth of our business and our ability to meet growth goals; 

 

	 	•	 	 our acquisition strategy and ability to integrate new business; 

 

	 	•	 	 our reliance on third-party logistics providers; 

 

	 	•	 	 food safety and consumer health; 

 

	 	•	 	 our ability to protect our trademarks or other intellectual property rights; 

 

	 	•	 	 our increasing reliance on distributors; 

 

	 	•	 	 the effectiveness of our marketing efforts including digital marketing and social media campaigns;

  

	 	•	 	 inability to protect our brand value and reputation; 

 

	 	•	 	 failure to successfully expand to new markets; 

 

	 	•	 	 failure to comply with applicable product labelling, marketing and advertising regulations; 

 

	 	•	 	 our inability to develop and market new products and improvement to existing products; 

 

	 	•	 	 failure to acquire or retain customers across our distribution channels; 

 

	 	•	 	 the effects of consolidation in the retail grocer sector; 

 

	 	•	 	 our failure to comply with laws and regulations; 

 

	 	•	 	 disruptions affecting our information technology systems and eCommerce business; 

 

	 	•	 	 claims made against us, which may result in litigation; 

 

	 	•	 	 the impacts of climate change; 

 

	 	•	 	 insurance-related risks; 

  

	 	•	 	 leasing commercial and retail space; 

 

	 	•	 	 consumer trends; 

  

	 	•	 	 changes in the general economic conditions; 

 

	 	•	 	 union attempts to organize our employees; 

 

	 	•	 	 failure to meet social responsibility metrics or ESG benchmarks; 

 

	 	•	 	 counterparty risk; 

  

	 	•	 	 changes in accounting standards; 

 

	 	•	 	 volatility in the market price for Common Shares (as defined in this AIF); 

 

	 	•	 	 future equity sales; and 

  

	 	•	 	 no cash dividends for the foreseeable future. 

If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove
incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. The opinions, estimates or assumptions referred to above and described in greater detail in “Risk Factors’’
should be considered carefully by readers. 
 Although we have attempted to identify important risk factors that could cause actual results to differ
materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from
those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly,
readers should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this Annual Information Form represents our expectations as of the date of this Annual
Information Form (or as the date they are otherwise stated to be made) and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward- looking information whether as a
result of new information, future events or otherwise, except as required under applicable securities laws in Canada. 
 All of the forward-looking information
contained in this Annual Information Form is expressly qualified by the foregoing cautionary statements. 

  
 5 

 CORPORATE STRUCTURE 

Incorporation and Head Office 
 VERY GOOD is a public company
that was incorporated on December 27, 2016 under the Business Corporations Act (British Columbia) under the name “The Very Good Butchers Inc.’’ and changed its name to The Very Good Food Company Inc. on October 1,
2019. On August 7, 2018, the Company altered its Notice of Articles (the “Articles”) to reflect an alteration to the authorized share structure by eliminating all classes of shares except for common shares (the
‘‘Common Shares’’) and on July 29, 2019, the Company amended its Articles to, among other things, provide that the Common Shares may be uncertificated and held in “book-entry” form, allow for names changes
to be approved by directors’ resolution and remove certain shareholder drag-along rights. 
 Our head office is located at 2748 Rupert Street,
Vancouver British Columbia, Canada, V5M 3T7 and our registered and records office is located at 885 W. Georgia, #900, Vancouver, British Columbia V6C 3H1. VERY GOOD’s corporate website address is www.verygoodfood.com. 

Intercorporate Relationships 
 The following chart identifies
the Company’s current subsidiaries, their applicable governing corporate jurisdictions and the percentage of their voting securities which are beneficially owned, or controlled or directed, directly or indirectly by VERY GOOD. As of
December 31, 2020, none of the Company’s subsidiaries had total assets or operating revenues that exceeded 10% of the consolidated assets and operating revenues of the Company. 

 
 

 
 DEVELOPMENT OF OUR BUSINESS 

History & Mission 
 We are an emerging plant-based
food technology company that produces plant-based meat and other food products that are delicious while maintaining a wholesome nutritional profile. To date we have developed a core product line under The Very Good Butchers brand. 

 Founded by James Davison and Mitchell Scott in 2016, VERY GOOD grew out of their common frustration over a lack of good, tasty, top quality,
nutritional plant-based food and the desire to offer innovative, low-processed and healthy alternatives to animal-based products, that are as great-tasting as they look. This desire underpins the lofty, badass but beautifully simple mission
that guides our purpose-driven business: get millions to rethink their food choices while helping them do the world a world of good. 

  
 6 

 Three-Year History 

During the three years ended December 31, 2020 and in the period subsequent to the end of fiscal 2020, a number of events, factors and initiatives
have impacted the development and growth of our Company. 
 Early Days 

Our Company started by selling products at local farmer’s markets. In February 2017, we opened the first vegan butcher shop on the west coast of
Canada at the Victoria Public Market in Victoria, British Columbia (the “Victoria Butcher Shop & Restaurant”) which garnered significant public interest, with over 1000 people attending on opening day. In
August 2017, the Victoria Butcher Shop & Restaurant was expanded to include a newly created restaurant designed to serve an enhanced product line and hot-food offerings. In the fall of 2017, we
established our wholesale program with initial deliveries to smaller natural food grocery retailers. In April 2018, we launched our eCommerce store. 
 Scaling
Production 
 Initially, we handcrafted products at a production kitchen on Denman Island in British Columbia. In December 2018, we moved our
production kitchen to Victoria and in May 2019 expanded our production capacity by moving production to a 4,000 square feet production facility in Victoria (the “Victoria Facility”). With continued growth in product demand,
increasing production at the Victoria Facility was a key corporate priority in 2020. We put in place various initiatives to optimize and increase production, such as effective production scheduling, labour retention and supply chain planning. We
also implemented an updated inventory management system in September 2020, which has streamlined inventory tracking and procurement as well as a just-in-time inventory
management system, which is expected to further increase capacity and improve eCommerce order wait times. The initiatives implemented to date resulted in an increase in weekly production volume to 20,000 lbs per week as at December 31, 2020 and
a further increase to 24,000 lbs per week subsequent to fiscal 2020 year-end. 
 In August 2020, we entered
into a lease for a production and distribution facility already built-out for food production located in Patterson, California (the “Patterson Facility”). We initially leased 25,000 square
feet of space and hold an option to acquire an additional 25,000 square feet of adjoining space. The Patterson Facility is strategically located on the same property as one of our third-party logistics (“3PL”) providers such that
product can be delivered for distribution by way of a short-haul forklift at minimal cost with no time in transit, and is also located on key shipping routes for ground transportation to wholesale clients and in close proximity to key suppliers. The
Patterson Facility can accommodate up to four production lines, allowing for potential capacity of up to 98,500,000 lbs of product per year. We plan to start food production at the Patterson Facility in the latter part of 2021. 

In November 2020, we entered into a lease for an approximately 45,000 square feet production facility in Vancouver, British Columbia (the
“Rupert Facility”). Already built-out for food production with production, refrigeration, warehousing, research and development space and office space, the Rupert Facility presented us with a
unique opportunity to build capacity and address near-term demand. The Rupert Facility is expected to be capable of producing up to 37,000,000 lbs of annualized product to be phased in over the next year. The Rupert Facility will have two production
lines. The first line has been commissioned, tested and is producing saleable product effective May 2021. The second line is planned to start food production in the fourth quarter of 2021. 

Through the acquisition of The Cultured Nut Inc. (the “Cultured Nut”), an artisan vegan cheese company based in Victoria, Canada in the
first quarter of 2021, we took over the lease of their existing production facility located in Esquimalt, British Columbia (the “Fairview Facility”) and are currently in the process of scaling production to 500,000 lbs per year, the
equivalent of 130,000 units per month through the addition of capital equipment and enhancing operational process flow. The Fairview Facility will continue to produce the Cultured Nut’s existing SKUs as well as other plant-based cheese products
in development. The Cultured Nut’s top five products are being rebranded to The Very Good Cheese Co. 

  
 7 

 Butcher Shops and Product Innovation Centre 

In January 2020, we entered into a lease for an approximately 14,000 square feet space in Vancouver’s Mt. Pleasant district (“Mount
Pleasant”) and took possession on September 1, 2020. Mount Pleasant will be our second flagship store, with a retail front featuring our vegan butcher shop and restaurant concept, including a test kitchen, and will also house our
research and development innovation centre (the “R&D Innovation Centre”) focused on product innovation and development. The R&D Innovation Centre will include a smaller production line which will be used to test new products
and produce product for sale. We currently expect to welcome our first customers to the Mount Pleasant flagship store in the fourth quarter of 2021. 

In September 2020, we entered into a lease for a new location for the Victoria Butcher Shop & Restaurant in downtown Victoria, British
Columbia, currently scheduled to open at the end of June 2021. This location will feature an outdoor patio, larger footprint and will accommodate a higher volume of customers, while maintaining COVID-19
pandemic social distancing protocols for as long as these remain in place. This flagship location will be a template for the future opening of additional locations across strategic cities in North America. 

Expanding Wholesale Distribution 
 As we have increased
production capacity, we have entered into several retail partnerships and have been able to expand wholesale distribution points to 1,300 in 275 stores as at December 31, 2020. As at March 31, 2021, we had approximately 1,356 retail
distribution points in Canada in 300 stores. Wholesale distribution points are defined as the number of retail stores multiplied by the number of product SKUs. 

We have wholesale distribution partnerships in both Canada and the US. In 2020, we entered into wholesale distribution partnerships in Canada with
Canada Choice Wholesalers (CCW), Horizon Distributors and United Natural Foods (UNIFI) (Canada). Most recently, to increase our wholesale retail distribution in the US, we entered into new partnerships with Boulder, Colorado-based natural food and
beverage brokerage, Green Spoon Sales and wholesale distributor UNFI (USA), to accelerate our reach into grocery and retail across the US. 
 Through
these wholesale distribution relationships, our products are now sold in various retail banners in Canada. In May 2020, select Whole Foods Market stores in Vancouver and Victoria, BC began carrying our The Very Good Butchers brand of plant-based
meat alternatives. In July 2020, a distribution relationship with Sobeys Inc. became effective, which initially represents 30 Thrifty Foods stores located across British Columbia and Alberta, with the potential for expansion across Sobeys’
1,500 store cross-country network. In August 2020, Canadian distributor and sustainable online retailer Spud.ca began carrying The Very Good Butchers products. In January 2021, Quality Foods, a Vancouver Island based retailer owned by the Jim
Pattison Group, agreed to list The Very Good Butchers products, increasing our retail network by 14 locations. In February 2021, Sobeys agreed to expand product placements into its top ten Safeway locations, and we also expanded our distribution
into Eastern Canada through Farm Boy retail stores which are part of the Sobeys network. We are also in ongoing discussions with several major retail banners in the US for the introduction of our products onto their shelves in the latter part of
2021. 
 Scaling eCommerce 
 Establishing hubs across North
America is a critical step in building a scalable eCommerce business, reducing shipping costs and enhancing customer relationships through faster delivery times. In August 2020, we signed agreements with three strategically located 3PL providers in
North America to increase speed of delivery to customers and reduce associated shipping costs for eCommerce store orders. These 3PL facilities’ centralized locations provide VERY GOOD with the capabilities of reaching anywhere in North America
in two to three days via ground or rail transportation. All three providers provide pick, pack and ship services for our eCommerce orders and wholesale palletization for orders from retailers. These agreements have allowed us to increase our online
order fulfilment rate from 900 per week to 1,800 per week during the fourth quarter of 2020. 

  
 8 

 Financings and Stock Exchange Listings 

Since incorporation we have capitalized VERY GOOD with a series of private placements. In August 2017, we launched a Kickstarter campaign and raised
$64,000 from 700 different backers. In September 2018, we launched a fundraising campaign through FrontFundr and raised $600,000 in convertible debentures from 248 investors across Canada in a series of closings pursuant to the crowdfunding and
accredited investor exemptions under applicable securities legislation. In June 2019, we completed a further financing round of convertible debentures in the principal amount of $300,000. Together, these convertible debentures converted into an
aggregate of 7,494,716 Common Shares upon completion of our initial public offering on June 17, 2020 (the “IPO’’). On July 31, 2019, we closed a private placement for gross proceeds of $1,849,80 through the issuance
of 12,348,669 Common Shares and 6,174,334 warrants exercisable into Common Shares (“Warrants’’). All of the Warrants were exercised prior to their expiry on July 31, 2020, for additional proceeds to us of approximately
$1.8 million. 
 Upon completion of the IPO, our Common Shares were listed for trading on the Canadian Securities Exchange
(“CSE’’) under the symbol “VERY”. Since becoming a public company, we have completed two public offerings, a bought deal for gross proceeds of $8,521,500 that closed on August 7, 2020 (the “August Bought
Deal”) and a bought deal for gross proceeds of $13,226,150 that closed on December 4, 2020 (the “December Bought Deal’’). Concurrently with the December Bought Deal, we also completed a private placement for gross
proceeds of $999,999 to accommodate investor demand that could not be included in the December Bought Deal. 
 On March 17, 2021, our Company
graduated from the CSE to the TSX Venture Exchange (“TSX-V’’) and our Common Shares became listed on the TSX-V under the symbol VERY.V and were
subsequently delisted from the CSE. In 2020, our Common Shares were also listed on the OTCQB under the symbol ‘‘VRYYF’’ and on the Frankfurt Stock Exchange under the symbol ‘‘0SI’’. 

On March 9, 2021, we announced the execution of a non-binding term sheet (the “Term
Sheet”) with a lender for a committed $70 million senior secured credit facility (the “Credit Facility”). On June 7, 2021, we announced the execution of a definitive loan agreement (the “Loan
Agreement”) with respect to the Credit Facility which superseded the Term Sheet. Under the terms of the Loan Agreement, the Credit Facility provides a senior secured $20 million revolving line of credit and a $50 million asset
backed term loan to VERY GOOD. All amounts drawn under the Credit Facility pay interest at a rate of 9.95% per annum and be repaid in full upon maturity. The Loan Agreement provides for a term of 24 months for the Credit Facility with an option to
renew, upon mutual consent, for another 12 months. The Credit Facility is secured by the Company’s assets. 
 Acquisitions 

In February 2021, we entered the plant-based cheese market with the acquisition of the Cultured Nut, with sales distribution in several online and
grocery retailers, including select Whole Foods Market stores. The acquisition was completed pursuant to a share purchase agreement between the Company and the shareholders of Cultured Nut, for an aggregate purchase price of $3,000,000, subject to
customary post-closing adjustments. The purchase price comprised an equity issuance of 139,676 Common Shares at a deemed price of approximately $7.15 per Common Share ($1,000,000) and cash consideration of $2,000,000, of which $1,000,000 is
contingent on the successful achievement of certain milestones related to the integration of the Cultured Nut’s business over a 12-month period. We currently intend to rebrand the Cultured Nut’s
product line under a new brand called The Very Good Cheese Co., which is expected to launch in the second quarter of 2021 through VERY GOOD’s eCommerce and wholesale distribution channels. 

In March 2021, we completed the acquisition of Lloyd-James Marketing Group Inc. (“Lloyd-James’’), a boutique wholesale and food
service broker specializing in the plant-based food industry. Lloyd-James has a history of placement in large natural, specialty and conventional grocery retailers such as Whole Foods Market, The Pattison Food Group, Sobeys, Metro, Loblaw and
Walmart. The acquisition was completed pursuant to a share purchase agreement between the Company and the sole shareholder of Lloyd James for 

  
 9 

 
an aggregate purchase price of $1,075,000, subject to customary post-closing adjustments. The purchase price comprised an equity issuance of 62,329 Common Shares at a deemed price of
approximately $6.42 per Common Share ($400,000) and cash consideration of $675,000, of which $350,000 is contingent on the successful achievement of certain milestones related to the achievement of specific sales targets in 2021. 

Building our Team 
 Since inception our founders, Mitchell
Scott and James Davison, have been joined by accomplished executives and professionals with a broad range of expertise and skills. In particular, over the past ten months we have worked to build the right team to grow our business by investing in
talent across the organization. 
 At the senior leadership level, Kamini Hitkari became our Chief Financial Officer in September 2020 and
subsequently also assumed the role of Corporate Secretary. Kamini is a Chartered Accountant with a background in the consumer product goods industry and scaling high-growth companies. In December 2020, William (Bill) Tolany was appointed to our
board of directors (the “Board’’). Bill has extensive experience in marketing and ecommerce strategies, having previously served as the Senior Director of Marketing at Whole Foods Market and as Regional General Manager for
Amazon, where he helped lead the launch and expansion of Amazon Prime Now. In January 2021, Ana Silva joined us as President from Daiya Foods Inc., where she served as Chief Financial Officer for the past five years, during which time Daiya
underwent a $405 million acquisition. Ana also serves as a member of the Board. 
 The Impact of COVID-19 

In March 2020, the World Health Organization declared the outbreak of COVID-19 a worldwide pandemic. Since its
outbreak, COVID-19 has continued to spread globally and had a significant impact on general economic conditions. While some COVID-19 restrictions have been lifted or
eased in many jurisdictions as the rates of COVID-19 infections have decreased or stabilized and the rollout of vaccines has gained momentum, the duration and long-term impact of the COVID-19 pandemic currently remains unknown. 
 Along with businesses globally, VERY GOOD is subject to the
continuing risk that COVID-19, and its current and/or any future variants, may impact our results of operations or financial condition through disruptions to our operations including as a result of temporary
production suspensions at our Victoria, Rupert, or Fairview Facilities, prolonged indoor dining restrictions at our Victoria Butcher Shop & Restaurant Flagship Store, interruptions in our supply chain and distribution network, or delays in
the delivery of equipment to our production facilities. 
 We continue to utilize and refine our safety protocols to ensure the health and wellness of
our employees which include the use of personal protective equipment and physical distancing initiatives to reduce risk within our facilities. As a result of the policies and procedures implemented, our operations have been largely uninterrupted by
the COVID-19 pandemic other than with respect to the impact of the government mandated closures for in-restaurant dining on our Victoria Butcher Shop &
Restaurant Flagship Store which have been lifted as at the date of this Annual Information Form. 
 DESCRIPTION OF THE BUSINESS 

Overview 
 Principal Products: Our principal products
are comprised of a varied line-up of natural plant-based meat alternatives under our The Very Good Butchers brand. Since the acquisition of the Cultured Nut we also sell vegan cheeses, marketed under The Very
Good Cheese Co. brand starting in June 2021. The principal ingredients we use to create The Very Good Butchers products include legumes such as black, adzuki and navy beans, a variety of vegetables and/or fruit, vital wheat gluten (the natural
protein found in wheat), herbs and spices. The Cultured Nut products are made from tree nuts using fermentation as part of the process and are soy and gluten free. 

  
 10 

 Principal Customers: We sell our products to major grocery chains, independent grocery outlets,
online retailers and on our eCommerce platform. Our products are merchandized in the refrigerated and frozen sections of stores. In addition to wholesale and the eCommerce sales channels, we also offer our products in the Victoria Butcher
Shop & Restaurant Flagship Store, where we sell them individually for a deli-like experience and in creative plant-based iterations of traditionally animal protein centric dishes on the restaurant menu. 

Principal Markets: We currently sell our products in Canada and the United States. 

Distribution Channels 
 We currently distribute and sell our
products through three main channels: eCommerce, wholesale and the Victoria Butcher Shop & Restaurant as described below.

eCommerce – Our eCommerce Store sells VERY GOOD’s products both individually and in boxed sets. In addition, VERY GOOD offers a
monthly subscription service which allows customers to receive monthly boxed sets at a discount over a select period of time. As at December 31, 2020, we had over 800 active subscribers across Canada and in the United States and at the end of
our first quarter ended March 31, 2021, we had over 1,900 active subscribers with new subscribers joining daily. eCommerce sales allow us to capitalize on demand by shipping products directly to consumers and transforming demand into a
recurring income stream via a subscription model. During the year ended December 31, 2020, we shipped 40,322 eCommerce orders and during the three months ended March 31, 2021, we shipped 23,181 eCommerce orders which represents 57% of the
total eCommerce orders processed in fiscal 2020. We monitor weekly orders versus inventory on hand and manage marketing efforts in lock step with production capacity. 

For the fiscal year ended December 31, 2020, revenue from the eCommerce channel was $3,382,458, representing 72.9% of our consolidated revenue for
fiscal 2020, compared to $225,121 for the fiscal year ended December 31, 2019 representing 22.5% of consolidated revenue for fiscal 2019. 

Wholesale – As at December 31, 2020, we had approximately 1,300 retail distribution points in Canada in 275 stores.
Subsequent to year-end, this had increased to 1,356 retail distribution points in Canada in 300 stores as at March 31, 2021. These wholesale accounts include national grocery store chains operating in
Western Canada including Whole Foods Market, Thrifty Foods (Sobeys), Fresh St. Market, Choices Markets and IGA, as well as smaller independent grocers and online retailers. As at the date of this Annual Information Form, our products we have also
expanded to Eastern Canada where our products are now available at Farm Boy in Ontario. 
 For the fiscal year ended December 31, 2020, revenue
from the wholesale channel was $840,490 representing 18.1% of our consolidated revenue for fiscal 2020, compared to $156,137 for the fiscal year ended December 31, 2019 representing 15.6% of our consolidated revenue for fiscal 2019. 

Butcher Shops & Restaurants – Our current and future butcher shop and
restaurant locations are intended to serve as the brick and mortar of our distribution network, designed to showcase our products, serve as test kitchens, and be utilized as a key marketing and branding tool. We currently have the Victoria Butcher
Shop & Restaurant Flagship Store and our second flagship butcher shop and restaurant at Mount Pleasant is scheduled to open in the latter part of the fourth quarter of 2021. 

For the fiscal year ended December 31, 2020, revenue from the Victoria Butcher Shop & Restaurant and our food truck, was $413,890
representing 8.9% of our consolidated revenue for fiscal 2020, compared to $618,539 for the fiscal year ended December 31, 2019 representing 61.9% of our consolidated revenue for fiscal 2020. 

  
 11 

 Ingredient Supply 

We source ingredients from a number of suppliers and have entered into written supply agreements for some key ingredients such as certain types of beans
and vital wheat gluten. Many of the inputs in our products are generally readily available in the market from a variety of suppliers, however, as our production volume ramps up, we will increasingly be required to enter into volume agreements to
secure timely access and pricing in our supply chain, in particular with respect to vegetables in line with crop cycles and for organic ingredients. 
 Product
Innovation 
 Central to our ability to compete is the ability to continually innovate and develop new plant-based products. Our future R&D
Innovation Centre at Mount Pleasant will support a pipeline of new product innovation to broaden and deepen our product portfolio. 
 We currently
expect to launch our new “Butcher’s Select’’ gluten-free and soy-free line of products in the third quarter of 2021. Butcher’s Select comprises plant-based sausages, burgers and
meatballs carefully crafted using simple ingredients with an extra meaty texture. 
 In addition, following the acquisition of the Cultured Nut, we
relaunched five SKUs of plant-based cheese under our new brand, The Very Good Cheese Co. in our eCommerce channel starting in June 2021. The SKUs will be available in retail stores in the third quarter of 2021. 

Seasonality 
 Demand for our products can be seasonally
affected as demand increases for certain items such a burgers and hot dogs in the summer BBQ season and for other products such as our Beast roast, in the winter holidays season. We also compete with other plant-based food companies for raw
materials many of which must be secured at specific times of the year due to timing of crop cycles. 
 Competitive Conditions 

The plant-based food market has experienced accelerated growth in recent years. This growth has been accompanied by intense competitive pressure as new
entrants, legacy plant protein companies and more traditional multi-national food manufacturers compete for market share in this rapidly evolving space. Our competitors are a diverse group of brands that produce plant-based food products including
small and large independent companies as well as large-scale manufacturers of animal-based protein that have integrated plant-based meat, dairy and other food alternatives within their product offerings. 

We compete both in the meat alternatives market and in the plant-based cheese category based on a combination of factors, including taste, nutritional
profile and ingredients, quality, product availability, retailer shelf space and shelf placement, brand awareness and customer loyalty, price, and effective promotions. 

Regulatory Environment and Food Safety 
 The food industry is
highly regulated and is subject to changing political, legislative, regulatory, and other influences. In Canada, the primary federal agencies governing the manufacture, distribution, labelling and advertising of the consumer food products are the
Canadian Food Inspection Agency (the “CFIA’’) and Health Canada. Together these agencies regulate product composition, manufacturing, labelling and other marketing and advertising to consumers. The CFIA has the authority to
inspect our facilities to evaluate compliance with prescribed requirements. Additionally, the CFIA requires that certain nutrition and product information appear on our product labels. We are also restricted from making certain types of claims about
our products, including nutrient content claims, health claims, and claims regarding the effects of our products on any structure or function of the body, whether express or implied, unless we satisfy certain regulatory requirements. 

  
 12 

 Currently the Safe Food for Canadians Act (the “SFCA’’), the Safe Food
for Canadians Regulations (the “SFCR’’), the Food and Drugs Act (the “FDA’’) and the Food and Drugs Regulations (the “FDR’’) are the main federal food laws and
regulations in Canada. The responsibility for food labelling is shared between the CFIA and Health Canada. Under the FDA, Health Canada, together with the CFIA, administers regulations relating to the health, safety, and nutritional quality of food
sold in Canada. This includes labelling requirements about the nutrients in food, claims about nutrients, the presence of food allergens, and safety-related expiration dates. Under the FDA and FDR, the CFIA is primarily responsible for administering
non-health and safety food labelling regulations related to misrepresentation, labelling, advertising and standards of identity. The CFIA is responsible for the enforcement of all of the federal food laws.

 In particular, our production facilities and products are subject to inspection by the CFIA, provincial and municipal health authorities. 

Our Victoria Facility and the Rupert Facility are required to adopt a Preventive Control Plan (a “PCP’’) under the SFCA and SFCR.
The PCP addresses certain regulatory and safety aspects of food processing and importing in Canada and is based on internationally accepted practices. The PCP must also include a hazard analysis that describes how hazards will be controlled and/or
eliminated. 
 In order to maintain compliance with the various and ever changing regulatory, industry and customer requirements and expectations, we
employ a food safety and quality assurance team comprised of qualified, trained and experienced personnel. As part of our commitment to food safety our Victoria Facility has obtained third-party HACCP certification. HACCP is a global defining
requirement for effective control of biological, chemical and physical food hazards. At our Rupert Facility we are working to complete the NSF supplier assurance audit by the end of 2021, which is a recognized third-party audit for large
retailers such as Sobeys and Whole Foods Market. 
 Employees 

As of December 31, 2020, we had 87 regular full and part-time employees, of whom 41 were salaried employees and 46 were hourly employees. Our
employees are not covered by a collective bargaining agreement and we have had no labour-related work stoppages. 
 Intellectual Property 

Trademarks 
 Brand recognition and loyalty is highly important
in the food industry. Our principal trademarks currently include the logos and/or wordmarks of The Very Good Butchers, We Butcher Beans and The Very Good Food Co. which have either become registered or for which we
have applied for registration in Canada, the United States, the European Union and the United Kingdom. We intend to continue to work to strategically register trademarks that we use today and those we develop in the future. 

Trade Secrets 
 We consider proprietary information related to
recipes, formulas and production methods to be trade secrets. Our employees with access to such information are subject to contractual and common law confidentiality provisions which prohibit them from disclosing information, including information
relating to our recipes and production methods, acquired by them during, as a consequence of, or in connection with their employment. 
 CORPORATE
RESPONSIBILITY 
 Central to our mission to get millions to rethink their food choices while helping them do the world a world of good, is our
commitment to grow and operate our business in a socially responsible and environmentally sustainable manner. Within that context we are working to create a meaningful environmental, social and governance framework that aligns with our core values.

  
 13 

 Sustainability. We are committed to reducing the environmental impacts known to contribute to
climate change by sourcing organic ingredients as much as possible, optimizing packaging choices through the use of sustainable materials, implementing effective waste management processes and continually evaluating our distribution systems. 

Healthy Food. We are committed to promoting healthy foods and wholesome nutrition through our products and are investing in product development
and innovation to expand our portfolio and consumer choice. To demonstrate our commitment to transparency in our ingredients we are also working to obtain third-party non-GMO certification of our products.

 Supporting our Community. We are committed to supporting our communities through charitable contributions such as our ongoing Burger of the
Month program under which we donate a portion of the sales of our Victoria Butcher Shop & Restaurant’s monthly burger promotion to local charities. 

Human Rights in our Supply Chain. As we grow our supply chain, we are committed to working with our suppliers to support healthy working
conditions and fair compensation for farmers. 
 Diversity. We are committed to gender and other diversity representation on our Board and
executive and senior management level. 
 Code of Conduct. We have adopted a Code of Conduct to communicate to all of our team members our
commitment to conducting business with honesty and integrity, in compliance with applicable laws, regulations and policies, and in a manner that preserves our reputation and deters unethical behavior and wrongdoing. 

Becoming a Certified B Corporation. We are working to become a “Certified B Corporation”. The term Certified B Corporation does not
refer to a particular form of legal entity, but instead refers to companies that are certified by B Lab, an independent non-profit organization, as meeting rigorous standards of social and environmental
performance, accountability and transparency. 
 RISK FACTORS 

The following specific factors could materially adversely affect us and should be considered when deciding whether to make an investment in VERY GOOD
and our Common Shares. The risks and uncertainties described in this Annual Information Form and the information incorporated by reference herein are those we currently believe to be material, but they are not the only ones we face. If any of the
following risks, or any other risks and uncertainties that we have not yet identified or that we currently consider not to be material, actually occur or become material risks, our business, prospects, financial condition, results of operations and
cash flows and consequently the price of the Common Shares could be materially and adversely affected. In all these cases, the trading price of the Common Shares could decline, and prospective investors could lose all or part of their investment. In
addition, the following factors could affect our financial performance and cause actual results, plans and expectations to differ materially from those expressed or implied in any of the forward-looking information contained in this Annual
Information Form. 
 Risks Relating to our Business and Industry 

Risks associated with the ongoing COVID-19 pandemic 

The global spread and unprecedented impact of COVID-19 continues to create significant volatility, uncertainty
and economic disruption. COVID-19 has led governments and other authorities around the world to implement significant measures intended to control the spread of the virus, including social distancing measures,
business closures or restrictions on operations, quarantines and travel bans. While some of these restrictions have been lifted or eased in many jurisdictions as the rates of COVID-19 infections have decreased
or stabilized, a resurgence of COVID-19 and the discovery of various new COVID-19 variants in some markets has slowed, halted or reversed the reopening process
altogether. While the rollout of COVID-19 vaccines is currently underway in Canada and in the United States, we expect that it will take significant 

  
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time before the vaccines are widely available and taken up on significant scale, including as a result of delays in the rollout or administration of the
COVID-19 vaccines, declines in the public’s perception of the safety of the vaccines and their willingness to take the vaccines, or if COVID-19 and the new COVID-19 variant infection rates continue to increase. 
 The specific impacts that we may experience as a result of
COVID-19 include disruptions to our operations and lost revenue if a significant number of our employees are asked to self-isolate and are unable to work or if we are required to temporarily suspend production
as a result of an outbreak of COVID-19. Similarly, the ongoing production ramp-up and planned construction of line 2 at the Rupert Facility, construction at Mount
Pleasant and the opening of the new location of our Victoria Butcher Shop & Restaurant may be moderately or severely delayed as a result of COVID-19 related impacts including the British Columbia
government’s provincial order to restrict dine-in restaurant services which was recently lifted in late May 2021. We could also be negatively affected if our suppliers, distributors, logistics providers
or equipment vendors experience disruptions within their operations. 
 Overall, the ongoing effects of
COVID-19 could have a material adverse impacts on our business, results of operations, financial condition, and cash flows and may adversely impact the price of our Common Shares. 

Risks relating to failure to successfully establish facilities 

Any substantial delays in bringing the Rupert Facility up to full production on our current schedule will affect our production capacity, our ability to
meet demand for our products and expand distribution; all of which would negatively impact our ability to achieve our growth goals and financial objectives. Similarly, delays in the construction of Mount Pleasant will prevent us from opening the
Mount Pleasant flagship butcher shop and restaurant and launching the R&D Innovation Centre within our current timeframe. Further, any substantial delays in our current schedule for commissioning the Patterson Facility, will have a negative
impact on production capacity and the distribution of our products. 
 Our ability to bring the Rupert Facility up to full production, complete
construction on Mount Pleasant and build-out and commission the Patterson Facility is dependent on a variety of factors including the timely receipt of required permits and approvals for construction, the
accuracy of construction schedules and cost estimates, availability and cost of engineering resources, constructions crews and materials, our ability to hire and retain skilled employees at these facilities, adequate funding for the substantial
capital expenditures required such as the equipment used to produce our products, the timely delivery of production equipment for which lead times can be lengthy and delays in shipping as a result of the impact of
COVID-19 or otherwise. 
 Even if we are able to establish these facilities as planned and on schedule, we may
not realize all of the operational and financial benefits we expect to receive. 
 Additional funding requirements and negative cash flow from operations

 We are focused on growth and expansion, including the expansion of our production capacity and distribution channels. To support our
expanding business and execute on our growth strategies, we will require significant capital for the build-out and equipping of our Rupert Facility, Patterson Facility and Mount Pleasant, and for funding
product development and innovation, potential acquisitions, marketing and other corporate initiatives. Unanticipated costs may also arise and our overall future capital requirements may vary due to the occurrence of unforeseen factors. 

We had negative cash flow from operating activities of $9,660,481 and $1,432,523 for the fiscal years ended December 31, 2020 and 2019,
respectively, and will require us to access the Credit Facility and require additional equity or debt financing to operate and expand our business. If such financing is not available to us, or is not available on satisfactory terms, our ability to
operate and expand our business or respond to competitive pressures would be curtailed or severely limited and we may need to delay, limit or disregard expansion plans or other elements of our growth strategy or our operations. Our inability to
secure sufficient funding could have a material adverse effect on our business, financial condition, results of operations. In 

  
 15 

 addition, the issuance of Common Shares pursuant to any equity financing may affect the value of our
Common Shares and could result in dilution to our shareholders. 
 Risk relating to the Credit Facility 

The Company is required to comply with customary positive and negative covenants under the Loan Agreement and, in the event that we do not comply with
these covenants, our access to capital could be restricted or repayment could be required. Events beyond our control may contribute to the failure of the Company to comply with such covenants. A failure to comply with any of the covenants could
result in an event of default which, if not cured or waived, would permit acceleration of the indebtedness pursuant to the Credit Facility. The acceleration of the Company’s indebtedness under the Credit Facility may permit acceleration of
indebtedness under any other agreements that contain cross default or cross-acceleration provisions. In addition, the Credit Facility imposes certain operating and financial restrictions on the Company that include restrictions on the payment of
dividends, limitations on liens, entering into disposition of assets or amalgamations and limitations on additional indebtedness, among others. Even if VERY GOOD is able to obtain new financing, it may not be on commercially reasonable terms or
terms that are acceptable to the Company. 
 Risks relating to history of losses 

We have experienced net losses since incorporation. For the fiscal years ended December 31, 2020 and 2019 we incurred net losses of $13,858,800 and
$2,341,544, respectively. We anticipate that our operating expenses and capital expenditures will increase substantially in the foreseeable future as we continue to invest to expand our production capacity, increase our customer base, supplier and
distributor networks, hire additional employees, scale our R&D efforts and introduce new products in the market, pursue expansion to other jurisdictions, and ramp-up our marketing programs to build brand
awareness. Our expansion efforts may prove more expensive than anticipated, and we may not succeed in increasing sales and margins sufficiently to offset the anticipated higher expenses. In addition, many of our expenses, including the costs
associated with our existing and the proposed future production facilities, are fixed. Accordingly, we may not be able to achieve or sustain profitability, and we may incur significant losses for the foreseeable future. 

Risks relating to reliance on senior management and other key personnel 

Our management team consists of a core group of senior executive officers. As a result of having a small group of senior executive officers, the loss of
the technical knowledge, management expertise and knowledge of our operations of one or more members of our team, could result in a diversion of management resources, as the remaining members of management would need to cover the duties of any
senior executive who leaves us and would need to spend time usually reserved for managing our business to search for, hire and train new members of management. We do not have key person life insurance policies for our management employees. 

The loss of some or all of our management team or other key personnel, including the directors and managers of key functional areas, could negatively
affect our ability to develop and pursue our growth strategy, which could adversely affect our business and financial condition. Any departures of senior management could also be viewed in a negative light by investors and analysts, which could
cause the market price of our Common Shares to decline. 
 Additionally, the market for key personnel in the plant-based food industry is highly
competitive. As a result, we may not be able to attract and retain key personnel with the skills and expertise necessary to manage our business and pursue our growth strategy. 

Risks relating to competition in the plant-based food industry 

We face intense competition in the plant-based food industry as new entrants and more traditional food companies vie for market share in this rapidly
evolving market. Most of our competitors are, and many of our potential competitors may be, larger, and may have greater brand recognition, greater presence in both the 

  
 16 

 
retail and online marketplace and access to greater financial, marketing and other resources. Therefore, these competitors may be able to devote greater resources to the marketing and sale of
their products, generate greater brand recognition or adopt more aggressive pricing policies and distribution methods than we can. As a result, we may lose market share, which could reduce our revenue and adversely affect our results of operations.

 We do not possess exclusive rights to some elements that currently comprise our core brand such as our vegan butcher shop concept and offerings.
Our competitors may seek to emulate facets of our business strategy, butcher shop store experience or product offerings, which could result in a reduction of any competitive advantage that we may possess, and our business could suffer. There is no
assurance that we will continue to compete successfully against existing or future competitors. 
 Risks relating to limited or disrupted supply of key
ingredients 
 A number of the ingredients in our products, such as vegetables, beans and vital wheat gluten derived from wheat flour, are
vulnerable to adverse weather conditions and natural disasters, such as floods, droughts, frosts, earthquakes, hurricanes and pestilence. Adverse weather conditions and natural disasters can lower crop yields and reduce crop size and quality, which
in turn could reduce the available supply of, or increase the price of quality ingredients. We also compete with other food producers in the procurement of ingredients, and as consumer demand for plant-based protein products increases, this
competition may increase. Moreover, we strive to use organic ingredients which are more limited in supply than conventional product ingredients. If supplies of quality ingredients are reduced or there is greater demand for such ingredients, we may
not be able to obtain sufficient supply on favourable terms, or at all, which could impact our ability to supply products to distributors and retailers and may adversely affect our business, results of operations and financial condition. 

In addition to ingredients, we also purchase significant amounts of packaging for our products. Price fluctuations in our key ingredients and packaging
supplies could increase our cost of goods sold and we may not be able to implement product price increases to cover any increased costs, or any price increases implemented may result in lower sales volumes. If we are not successful in managing our
raw material costs, and unable to increase our prices to cover increased costs or if such price increases reduce sales volumes, then such increases in costs will adversely affect our business, results of operations and financial condition. 

We currently have short-term written supply agreements with only a few suppliers of our key ingredients. As we scale production at the Rupert and
Patterson Facilities, we will be required to secure larger volumes of raw materials pursuant to volume commitment agreements aligned with crop cycles. If we are unable to secure such agreements for the supply of the necessary ingredients in
sufficient quantities at competitive prices, or at all, this could negatively affect our production capacity and ability to meet demand for our products. Similarly, suppliers with whom we do not have any written agreements, could seek to alter or
terminate their relationship with us at any time, which could result in disruption to our supply chain and have an adverse effect on our business if we are not able to replace these suppliers in a timely manner, on commercially reasonable terms, or
at all. 
 Risks associated with scaling production and ability to manage supply chain 

Our ability to effectively scale production processes and effectively manage our supply chain requirements has risk. We must accurately forecast demand
for our products and inventory needs to ensure we have adequate available production capacity and to effectively manage our inventory. Insufficient or delayed supply of products threatens our ability to meet customer demands while over capacity
threatens our ability to generate profit. If we do not accurately align our production capabilities and inventory supply with demand, our business, financial condition and results of operations may be materially adversely affected. 

Risks associated with rapidly growing our business and ability to meet growth goals 

We have grown rapidly since inception and since completing our IPO, which places significant demands on our management, financial, operational and other
resources. The anticipated growth and expansion of our 

  
 17 

 
business and our product offerings will continue to place considerable demands on our management and operations teams and will require substantial resources to meet our needs, which may not be
available in a cost-effective manner, or at all. As we move forward, we expect our growth to bring new challenges and complexities that we have not faced before. We cannot anticipate all the demands that expanding operations would impose on our
business, and our failure to appropriately address these demands could have an adverse effect on us. If we do not effectively manage our growth, we may not be able to execute on our business plan, respond to competitive pressures, take advantage of
market opportunities, satisfy customer requirements or maintain high-quality product offerings, any of which could harm our business, brand, results of operations and financial condition. 

The success of our growth strategy is dependent on, among other things, our ability to expand production through added capacity, drive revenue growth
through increased sales across our distribution network, raise brand awareness, innovate, diversify our product portfolio, effectively integrate newly acquired businesses as well as other factors which are beyond our control, including general
economic conditions. 
 If we fail to execute any one or more of these initiatives or fail to fully realize the benefits expected to result from these
initiatives, our results of operations could be materially adversely impacted, and the price of our Common Shares could decline. 
 Risks associated with future
acquisitions or investments 
 In the first quarter of 2021, we completed the acquisitions of the Cultured Nut and Lloyd-James. As we move to
integrate these businesses with our own, we may experience difficulties, the anticipated benefits of the acquisitions may not be fully realized in a timely manner or at all. We also intend to pursue further acquisitions and investments in the future
that we believe will help us achieve our strategic objectives. However, we may not be able to find suitable acquisition candidates, and even if we do, we may not be able to complete acquisitions on favourable terms, if at all. If we do complete
acquisitions, we may not ultimately achieve our goals or realize the anticipated benefits as acquisitions inherently involve a number of risks. Specifically, the pursuit of acquisitions and any integration process will require significant time and
resources and could divert management time and focus and we may not be able to manage the process successfully. An acquisition, investment or business relationship may result in unforeseen operating difficulties and expenditures, including
disrupting our ongoing operations and subjecting us to additional liabilities, increasing our expenses, and adversely impacting our business, financial condition and operating results. Moreover, we may be exposed to unknown liabilities related to
the acquired company or products for which we may not be sufficiently indemnified, and the anticipated benefits of any acquisition, investment or business relationship may not be realized if, for example, we fail to successfully integrate such
acquisition into our company. To pay for any such acquisitions, we would have to use cash, incur debt, or issue debt or equity securities, each of which may affect our financial condition or the value of our Common Shares and could result in
dilution to our shareholders. Our acquisition strategy could require significant management attention, disrupt and harm our business, financial condition and results of operations. 

Risks relating to third-party logistics 
 We currently
rely upon independent third-party logistics providers for the fulfillment of our eCommerce orders and increasingly also for our wholesale shipments. Our use of such third-party providers for fulfillment is subject to risks, including but not limited
to, labour disruptions, human error and shipment delays. Any unanticipated changes in our third-party providers, such as a result of a strike or other stoppages, could result in logistical difficulties that could adversely impact deliveries and we
may incur costs and expend resources in connection with such change. Moreover, we may not be able to obtain terms as favourable as those received from the third-party providers we currently use, which may also result in increased costs, or we may
not be able to replace our current third-party providers with a viable alternative at all. Failure of our third-party providers to deliver our products in a timely manner may negatively impact our customer service levels, brand reputation and
profitability. Additionally, our third-party providers are required to maintain the quality of our products and to comply with our product specifications and any failure to do so could adversely affect our reputation in the marketplace and result in
product recalls, product liability claims and economic loss. 

  
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 Risks relating to food safety and consumer health, including product liability 

We are subject to risks that affect the food industry in general, including the risks posed by food spoilage, accidental contamination, foodborne
illness, product tampering, consumer product liability, and the potential costs and disruptions of a product recall. Unexpected side effects, illness, injury or death related to allergens, food-borne illnesses or other food safety incidents
involving our products could result in the discontinuance of sales of these products or otherwise result in increased operating costs, regulatory enforcement actions, lawsuits or harm to our reputation. We manage these risks by maintaining strict
and rigorous controls and processes in our production processes and distribution system. However, we cannot assure that such systems will eliminate the risks related to food safety. Any product safety issue could subject us to product liability and
negligence claims, including consumer class action lawsuits, adverse publicity and government scrutiny, investigation or intervention, resulting in increased costs and decreased sales. Any claims brought against us may exceed or be outside the scope
of our existing or future insurance policy coverage or limits. Any of these events could have a material adverse impact on our business, financial condition and results of operations. 

Risks related to real or perceived quality or health issues with our products 

We believe our consumers rely on us to provide them with high-quality plant-based products. Therefore, real or perceived quality or food safety concerns
or failures to comply with applicable food regulations and requirements, whether or not ultimately based on fact and whether or not involving us (such as incidents involving our competitors), could cause negative publicity and reduced confidence in
our Company, brand or products, or the industry as a whole, which could in turn harm our reputation and sales, and could materially adversely affect our business, financial condition and operating results. Although we believe we have a rigorous
quality control process, there can be no assurance that our products will always comply with the standards set for our products, and although we strive to keep our products free of pathogenic organisms, they may not be easily detected and
cross-contamination can occur. 
 We have no control over our products once purchased by consumers. Accordingly, consumers may prepare our products in
a manner that is inconsistent with our directions or store our products for long periods of time, which may adversely affect the quality and safety of our products. If consumers do not perceive our products to be safe or of high quality, then the
value of our brand would be diminished, and our business, results of operations and financial condition would be adversely affected. 
 Any loss of
confidence on the part of consumers in the ingredients used in our products or in the safety and quality of our products would be difficult and costly to overcome. Any such adverse effect could be exacerbated by our position in the market as a
purveyor of high-quality plant-based protein products and may significantly reduce our brand value. Issues regarding the safety of any of our products, regardless of the cause, may have a substantial and adverse effect on our brand, reputation and
operating results. 
 The growing use of social and digital media by us, our consumers and third parties increases the speed and extent that
information or misinformation and opinions can be shared. Negative publicity about us, our brands or our products on social or digital media could seriously damage our brands and reputation. If we do not maintain the favorable perception of our
brands, our sales and profits could be negatively impacted. 
 Risks relating to product recalls 

Food producers are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as
contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labeling disclosure. We could be required to recall certain or a large portion of our products, including in the
event of contamination or adverse test results or as a precautionary measure. There is also a risk that not all of the product subject to the recall will be properly identified, or that the recall will not be successful or not be enacted in a timely
manner. A product recall could result in significant losses due to its costs, destruction of product inventory and lost sales due to the unavailability of the product or potential loss of current or new customers as a result of an adverse impact on
our reputation. In addition, once purchased by consumers, we have no further control over our products 

  
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and consumers may prepare our products in a manner that is inconsistent with our directions which may adversely affect the quality and safety of our products. 

Risks associated with the protection of trademarks and other intellectual property rights 

We rely on unpatented proprietary expertise, recipes and formulations and other trade secrets to develop and maintain our competitive position. Our
success depends, to a significant degree, upon our ability to protect and preserve our intellectual property. Our employees with access to such information are subject to contractual and common law confidentiality obligations which prohibit them
from disclosing information acquired by them during, as a consequence of or in connection with their employment. We rely on these agreements to protect our intellectual property rights. Nevertheless, trade secrets are difficult to protect.
Although we attempt to protect our trade secrets, our confidentiality protections may not effectively prevent disclosure of our proprietary information and may not provide an adequate remedy in the event of unauthorized disclosure of such
information. If we do not keep our trade secrets confidential, others may produce products with our recipes or formulations. Further, we currently own no patents or exclusive intellectual property rights in processes used for our products. As a
result, our current and future competitors may be able to create and sell products similar to ours. 
 We rely on trademark registrations and common
law trademark and copyright rights to protect the distinctiveness of our brand and have either registered, or applied to register, our current key trademarks, including We Butcher Beans and our The Very Good Butchers logo, in Canada, the United
States, the European Union and the United Kingdom, and we may seek to expand our trademark registrations in the future. Current and future trademarks not yet registered may not be approved, or may be refused, and ultimately not registered. In
addition, our trademark rights and related registrations may be challenged in the future and could be canceled or narrowed. Failure to protect our trademark rights could prevent us in the future from challenging third parties who use names and logos
similar to our trademarks, which may in turn cause consumer confusion or negatively affect consumers’ perception of our brand and products. 

Litigation may be necessary to protect and enforce our trademarks and other intellectual property rights, or to defend against claims brought by third
parties. Such intellectual property disputes and proceedings may be protracted and costly with no certainty of success, and an adverse outcome could subject us to liabilities, force us to cease use of certain trademarks or other intellectual
property or force us to enter into licenses with others. Any one of these occurrences may have a material adverse effect on our business, results of operations and financial condition. 

Risks relating to distributor arrangements 
 The
products sold in our wholesale program are sold through food distributors who sell and deliver our products to retailers. As we expand our wholesale program we will increasingly rely on our distributors. Since these distributors act as
intermediaries between us and the retail grocers, we do not have short-term or long-term commitments or minimum purchase volumes in our agreements with them that ensure future sales of our products. The loss of one or more significant distributors,
if we are unable to replace the distributor in a timely manner, could negatively affect our business, results of operations and financial condition. 
 Risks
associated with marketing programs and brand value and reputation damage 
 We believe that our brand image has contributed significantly to
the success of our business to date and that maintaining, promoting and positioning our brand image and increasing brand awareness is important to maintaining and expanding our customer base. Maintaining and enhancing our current brand image and
awareness or any future brands we develop or acquire will require us to make investments in areas such as public relations and marketing. These investments, including digital marketing campaigns and organic social media through influencer
engagement, may be substantial, and our efforts may not ultimately be successful. If our current marketing efforts are not successful, there may be no immediately available or cost effective alternative means to build or maintain brand awareness,
which could negatively impact our business, financial condition and results of operations. 

  
 20 

 Our brand image and reputation may be impacted by actions taken by our employees, product attributes
(including food safety and quality assurance issues that may result in recalls) and negative commentary or reviews. Real or perceived quality or food safety concerns or failures to comply with applicable food regulations and requirements, whether or
not ultimately based on fact and whether or not involving us or incidents involving our competitors, could cause negative publicity and reduced confidence in us and our products, which could cause harm to our brand, reputation and sales, and could
materially adversely affect our business, financial condition and results of operations. 
 In addition, as we increase our influencer relationships
to promote our brand and products to targeted consumer groups, if one of our influencers promotes our brand in a negative way or does not adhere to applicable guidelines required by law, this may negatively impact our brand and reputation.
Widespread use and access to social media campaigns and viral messaging or imagery could significantly broaden the scope and impact of any such events or circumstances. Consumers may act on information conveyed through social media without further
investigation and without regard to its accuracy. The harm to our brand may be immediate without affording us an opportunity for redress or correction, and there can be no assurances that we will respond in an appropriate or timely manner. Brand
value is based on perceptions of subjective qualities, and any incident that erodes the loyalty of consumers, including adverse publicity, governmental investigation or litigation, could significantly reduce the value of our brand and adversely
affect our business, results of operations and financial condition. 
 Risks relating to disruption at our facilities 

Our offices, production facilities, warehouses, restaurant and third-party operated fulfillment centres are vulnerable to disruption from natural
disasters, extreme and/or unusual weather, global health crises and disease outbreaks (including COVID-19), and other unexpected events. These events could cause, and in the case of COVID-19, have caused, disruptions in our operations and those of our third-party partners, including our suppliers. 

Natural disasters such as earthquakes could severely damage or destroy one or more of our facilities, thereby severely disrupting our business
operations. We may also experience plant shutdowns or periods of reduced production because of regulatory issues, equipment failure, delays in raw material deliveries or COVID-19 outbreaks. Any such disruption
or unanticipated event may cause significant interruptions or delays in our business and the reduction or loss of inventory may render us unable to fulfill customer orders in a timely manner, or at all which would adversely affect our business,
results of operations and financial condition. 
 Risks associated with U.S. and international expansion 

Our future growth depends, in part, on our expansion efforts outside of Canada. We have limited operating experience outside of Canada including with
respect to regulatory environments and market practices and cannot guarantee that we will be able to penetrate or successfully operate in any market outside of Canada. In connection with any future expansion efforts outside of Canada, and in
particular outside of North America, we would expect to encounter additional obstacles, including increased costs and expenses associated with international shipping, including inventory management and distribution, cultural and linguistic
differences and differences in regulatory environments and market practices including with respect to food safety, manufacturing, labeling, distribution, marketing, and advertising and privacy laws such as those relating to collection, storage and
use of information on consumers ordering from our eCommerce store. Failure to develop new markets outside of Canada (through our eCommerce store or otherwise) may harm our business, growth and results of operations and could cause the market price
of our Common Shares to decline. 
 Risks relating to product labeling and marketing 

Our products are subject to regulations governing their labeling, marketing and advertising. If regulators determine that the labeling of any of our
products is not in compliance with applicable law or regulations in Canada or other jurisdictions, we could be subject to civil remedies or penalties, such as fines, injunctions, 

  
 21 

 
recalls or seizures, warning letters, restrictions on the marketing or manufacturing of the products, or refusals to permit the import or export of products, as well as potential criminal
sanctions. 
 We could also become subject to third-party claims, because of any violations of, or liabilities under, such requirements, including any
competitor or consumer challenges relating to compliance with such requirements. For example, in connection with the marketing and advertisement of our products, we could be the target of claims relating to false or misleading advertising, including
under the Canadian Safe Food for Canadians Act, Food and Drugs Act or Competition Act or similar statutes in other countries, or the consumer protection statutes in various jurisdictions. Such claims could include
challenges to our label or labeling claims that, if successful, could require us to make labeling changes and/or pay monetary damages. 
 Health
Canada and the CFIA or similar foreign regulatory authorities, such as the Food and Drug Administration and the United States Department of Agriculture, or authorities in the UK, the EU or the EU member states, could take action to impact our
ability to use the terms ‘‘meat’’ or ‘‘cheese’’ or similar words to describe or advertise our brand and products. In addition, a food may be deemed misbranded if its labeling is false or misleading in any
particular way, and authorities or other regulators could interpret the use of such terms or any similar phrase(s) to describe our plant-based food products as false or misleading or likely to create an erroneous impression regarding their
composition. Should regulatory authorities take action with respect to the use of the terms ‘‘meat’’, ‘‘cheese’’ or similar terms, such that we are unable to use those terms with respect to our plant-based
products, we could be subject to enforcement action or recall of our products marketed with these terms, we may be required to modify our marketing strategy, and our business, prospects, results of operations or financial condition could be
adversely affected. Competitors may also try to bring legal action against us and any resulting litigation could be costly and disruptive to our ability to market in the affected jurisdictions. 

Any change in labeling or packaging requirements for our products may lead to an increase in costs or interruptions in production, either of which could
adversely affect our operations and financial condition. New or revised government laws and regulations could result in additional compliance costs and, in the event of non-compliance, civil remedies,
including fines, injunctions, withdrawals, recalls or seizures and confiscations, as well as potential criminal sanctions, any of which may adversely affect our business, results of operations and financial condition. 

Risks relating to product innovation failure 
 Our
growth in part depends on our ability to develop and market new products and improvements to our existing products that appeal to consumer preferences. The success of our innovation and product development efforts is affected by our ability to
anticipate changes in consumer preferences, the technical capability of our R&D team in developing and testing product prototypes, including complying with applicable governmental regulations, the success of our management and sales and
marketing team in introducing and marketing new products and positive acceptance by consumers. Failure to develop and successfully market and sell new products will inhibit our growth, sales and profitability. 

Risks relating to customer retention and recruitment failure 

Our success, and our ability to increase revenue and operate profitably, depends in part on our ability to acquire new customers and retain existing
customers across our distribution channels. We may fail to acquire or retain customers due to a variety of factors including negative value and quality perceptions, a lack of new and relevant products or failure to deliver customers’ orders in
a timely manner. 
 Risks associated with customer consolidation or loss of significant customers 

As we increase distribution to retail grocery stores, we will be subject to the risk resulting from increasing consolidation being experienced in that
sector, in particular by smaller independent retailers. As retail grocers continue to consolidate and customers grow larger and more sophisticated, we will be required to adjust to changes in their purchasing practices and requirements including
resistance to product price increases. We could also be affected by other adverse developments in the relationship with one or more large customers 

  
 22 

 
including the loss thereof, the reduction of purchasing levels or the cancellation of any business from large customers for an extended period of time. Any of these events could have a material
adverse effect on our business, financial condition and results of operations. 
 Risks associated with product pricing 

Our success is dependent, in part, on our ability to make pricing decisions regarding our products that, on one hand encourage consumers to buy, yet on
the other hand recoup development and other costs associated with those products. Products that are priced too high will not sell and products priced too low will not generate an adequate return. Accordingly, any failure by us to properly price our
products could have a material adverse effect on the VERY GOOD’s financial condition and results of operations. 
 Risks relating to laws and regulatory
requirements 
 We are subject to employment, health and safety, cyber and data security, privacy, environmental, tax, advertising, competition
and other laws, and regulation by government agencies such as Health Canada and the CFIA who regulate various aspects of our products, including food safety standards, preventive controls plans, traceability and current good manufacturing practices.
In particular, our production facilities and products are subject to inspection by the CFIA and provincial and municipal health authorities. We strive to maintain compliance with all laws and regulations. Nevertheless, there can be no assurance that
we are in compliance with all such laws and regulations, have all necessary permits and licenses, and will be able to comply with such laws and regulations, or obtain such permits and licenses in the future. Failure by us to comply with applicable
laws and regulations and permits and licenses could subject us to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions, which could have a material adverse effect on our financial condition and
results of operations. If we, or third parties involved in the supply chain of our products, cannot successfully manufacture, package, label, store, advertise or distribute products that conform to the specifications and the strict regulatory
requirements of the CFIA or other applicable regulators, we may be subject to adverse inspectional findings or enforcement actions, which could materially impact our ability to market our products, could result in our inability to manufacture our
products, or could result in a recall of our products that have already been distributed. 
 The regulatory environment in which we operate could
change significantly in the future.    Enforcement of existing laws and regulations, changes in legal requirements and/or evolving interpretations of existing regulatory requirements may result in increased compliance costs and
create other obligations, financial or otherwise, that could adversely affect our business, financial condition or results of operations. In particular, any change in laws and regulations, including laws and regulations applicable to the
manufacture, composition, ingredients, packaging, labeling, distribution, advertising, sale, quality and safety requirements for our products may lead to an increase in costs or interruptions in production, either of which could adversely affect our
operations and financial condition. 
 Risks relating to information technology systems and cybersecurity 

We rely on our information technology systems to manage our business, including customer, employee, product, inventory, supply chain and financial data.
We also use mobile devices, online message platforms and other online activities to communicate with employees and other stakeholders. The failure of our information technology systems to operate effectively could adversely affect our business. In
addition, our information technology systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, cyber-attacks, phishing attacks, denial-of-service attacks, social engineering attacks, ransomware attacks, security breaches, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, pandemics, acts of war or
terrorism, and usage errors by our employees. If our information technology systems are damaged or cease to function properly, we may have to make a significant investment to fix or replace them. 

We may also suffer loss of critical data, compromise to the integrity or confidentiality of data and information, including but not limited to employee,
customer and supplier information in our systems or networks, disruption to the systems or networks of third parties on which we rely, and interruptions or delays in our 

  
 23 

 
operations. We rely on third-party technology cloud providers and may be subject to risks of such service providers ceasing business operations, changing their business models, reducing
functionality or experiencing cyber-attacks or system outages. Any significant loss of data or failure to maintain reliable data could have a material adverse effect on our business and results of operations. A disruption to our eCommerce business
could reduce our eCommerce revenue, increase our costs, diminish our growth prospects, expose us to litigation, decrease customer confidence and damage our brand,    and a material interruption to any of our computer systems
could adversely affect our business or results of operations and our reputation. 
 We generally collect, process, store and use sensitive personal
information relating to our customers and employees, including their personally identifiable information, and rely on third parties for the operation of our eCommerce site and for the various social media tools and websites we use, for marketing
purposes and for employment purposes. Any perceived, attempted or actual unauthorized disclosure of personally identifiable information regarding our employees, customers or website visitors could harm our reputation and credibility, reduce our
eCommerce revenue, reduce our ability to attract and retain customers, or subject us to litigation or the imposition of significant fines or penalties, which could adversely affect our business, growth, brand image and reputation. Moreover, we could
incur significant expenses or disruptions of our operations in connection with system failures or data breaches. 
 Many jurisdictions have adopted
privacy and data security laws or regulations that require notification to consumers or employees if the security of their personal information is breached, among other requirements. Any compromise of our security or accidental loss or theft of
customer or employee data in our possession could result in a violation of applicable privacy and other laws, significant legal and financial exposure and damage to our reputation, which could adversely impact our business, financial condition,
results of operations and the price of our Common Shares. 
 Risks associated with litigation 

As a growing company with expanding operations, we increasingly face the risk of litigation and other claims against us. Litigation and other claims may
arise in the ordinary course of our business and include employee and customer claims, commercial disputes, landlord-tenant disputes, intellectual property issues, product recall and liability claims. These claims can raise complex factual and legal
issues that are subject to risks and uncertainties and could require significant management time. Litigation and other claims against us could result in unexpected expenses and liabilities, which could materially adversely affect our operations, our
reputation and the market price of our Common Shares. 
 Risks relating to climate change 

Physical risks resulting from climate change can be event-driven (acute) or long-term (chronic) shifts in climate patterns that may have negative impacts
on our business, including direct damage to assets such as our facilities and indirect impact to our supply chain. As climate change accelerates, its impacts are becoming more widespread and unpredictable. The incidence and impact of severe
weather-related events, long term changes in weather patterns that lead to extreme weather and natural disasters including flooding and drought, may have a negative effect on agricultural productivity, which may result in decreased availability or
less favourable pricing for some or many of the ingredients in our products such as such as legumes and vegetables. Furthermore, evolving regulatory and legal frameworks to tackle climate change today and in the future may lead to adverse impacts to
our business. These may include, but are not limited to, costs related to compliance, resources, and transportation. 
 Insurance-related risks 

We maintain insurance including liability insurance, property and business interruption insurance and directors’ and officers’ insurance, with
deductibles, limits of liability and similar provisions. However, there is no guarantee that our insurance coverage will be sufficient, or that insurance proceeds will be paid to us on a timely basis. In addition, there are types of losses we may
incur but against which we cannot be insured or which we believe are not economically reasonable to insure. If we incur these losses and they are material, 

  
 24 

 
our business, financial condition and results of operations may be adversely affected. Also, certain material events may result in sizable losses for the insurance industry and materially
adversely impact the availability of adequate insurance coverage or result in significant premium increases. Accordingly, we may elect to self-insure, accept higher deductibles or reduce the amount of coverage in response to such market changes.

 Risks relating to dilution 
 The issuance of
additional Common Shares, or securities convertible into Common Shares, under any equity financing or pursuant to any equity-based compensation plans, may have a dilutive effect on the interests of shareholders. The number of Common Shares that we
are authorized to issue is unlimited. We may, in our sole discretion, subject to applicable law and the rules of the TSX-V, issue additional Common Shares from time to time and the interests of shareholders
may be diluted as a result. 
 Risks associated with leasing commercial and retail space 

We lease all of our facilities and accordingly, are subject to all of the risks associated with leasing, occupying and making tenant improvements to real
property, including adverse demographic and competitive changes affecting the location of the property and changes in availability of and contractual terms for leasable commercial and retail space. Changes in areas around our current and future
butcher shops that result in reductions in customer foot traffic or otherwise render the location unsuitable or altogether unavailable due to unforeseen or extraordinary circumstances including as a result of the
COVID-19 pandemic, could result in lower sales volumes and adversely affect our business, results of operation, and financial condition. We also have significant financial obligations under the leases we have
entered into and if we are not able to meet our lease obligations, this could have a material adverse effect on our financial condition and business. 
 Risks
associated with consumer trends 
 Our business is focused on providing wholesome and nutritious plant-based products as alternatives to
traditional animal-based products. Consumer demand could change based on a number of possible factors, including dietary habits and nutritional values, concerns regarding the health effects of ingredients and shifts in preference for various product
attributes that we may not be able to accurately predict or respond to. If consumer demand for our products decreases, our business and financial condition would suffer. Consumer trends could change based on a number of possible factors, including
economic factors and social trends. A significant shift in consumer demand away from our products could reduce sales, which would harm our business and financial condition. 

Risks associated with general economic conditions 
 The
global economy can be negatively impacted by a variety of factors such as the spread or fear of spread of contagious diseases (such as COVID-19), man-made or natural
disasters, actual or threatened war, terrorist activities, political unrest, civil unrest, and other geopolitical uncertainty. Consumers may shift purchases to lower-priced or other perceived value offerings during economic downturns and may reduce
the amount of plant-based food products that they purchase, and in particular more premium items such as our products. In addition, the occurrence of any of these events may disrupt commerce, our supply chain operations, international trade or
result in political or economic instability. Prolonged unfavourable economic conditions or uncertainty may have an adverse effect on our business and financial condition. 

Risks relating to labour unions 
 Union attempts to
organize our employees could negatively affect our business. None of our employees are currently subject to a collective bargaining agreement. As we expand our operations, unions may attempt to organize all or part of our employee base. Responding
to such organization attempts may divert the attention and efforts of management and employees and may have a negative financial impact on our business. The maintenance of a productive and efficient labour environment and, in the event of
unionization of these employees, and the successful negotiation of a collective bargaining agreement, cannot be assured. 

  
 25 

 
Protracted and extensive work stoppages or labour disruptions such as strikes or lockouts could have a material adverse effect on our business, financial condition and results of operations. 

Risks relating to failure to meet corporate social responsibility metrics 

We have set certain corporate social responsibility metrics for ourselves and our failure to meet such metrics may influence our reputation and the value
of our brand. For example, we are applying to B Lab to become a Certified B Corporation. If we obtain status as a Certified B Corporation our reputation could be harmed if we subsequently lose such status, whether by our choice or by our failure to
meet B Lab’s certification requirements, if that change in status were to create a perception that we are more focused on financial performance and are no longer as committed to the values shared by Certified B Corporations. Similarly, our
reputation could be harmed if we take actions that are perceived to be misaligned with our values. Any harm to our reputation resulting from setting these metrics or our failure or perceived failure to meet such metrics could impact: employee
engagement and retention; consumer loyalty, the willingness of our customers to do business with us; or investors’ willingness to purchase our Common Shares, any of which could adversely affect our business, financial performance, and growth.

 In addition, shareholders and institutional investors increasingly focus on corporate ESG practices which they commonly measure through third-party
benchmarks or scores. If our future ESG practices do not meet these standards we may lose investment from certain shareholders and our business and reputation could be negatively impacted and the price of our Common Shares could be materially and
adversely affected. 
 Risks associated with counterparties 

We are party to contracts, transactions and business relationships with various third parties, pursuant to which such third parties have performance,
payment and other obligations to us. If any of these third parties were to become subject to bankruptcy, receivership or similar proceedings, our rights and benefits in relation to our contracts, transactions and business relationships with such
third parties could be terminated, modified in a manner adverse to us, or otherwise impaired. We cannot make any assurances that we would be able to arrange for alternate or replacement contracts, transactions or business relationships on terms as
favourable as our existing contracts, transactions or business relationships, if at all. Any inability on our part to do so could have a material adverse effect on our business and results of operations. 

Risks relating to changes in accounting standards 

Generally accepted accounting principles and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range
of matters that are relevant to our business, including but not limited to revenue recognition, impairment of assets, leases, inventory, income taxes and litigation, are highly complex and involve many subjective assumptions, estimates and
judgments. Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments could significantly change our reported financial performance or financial condition in accordance with generally accepted
accounting principles. 
 Risks Relating to our Common Shares 
 Risks
relating to volatility of the market price for our Common Shares 
 The market price of our Common Shares could be subject to significant
fluctuations which could materially reduce the market price of our Common Shares regardless of our operating performance. In addition to the other risk factors described this Annual Information Form, the factors that could cause significant
disruption in the market price of our Common Shares may include actual or anticipated changes or fluctuations in our operating results, adverse market reaction to any indebtedness we may incur or securities we may issue in the future, litigation or
regulatory action, significant acquisitions, business combinations or other strategic actions or capital commitments by or involving us or our competitors, recruitment or departure of key personnel and investors’ general perception and
reactions to our public disclosure and filings. 

  
 26 

 In addition, broad market and industry factors may harm the market price of our Common Shares. As a
result, the market price of our Common Shares may fluctuate based upon factors external to us and that may have little or nothing to do with us, including expectations of market analysts, positive or negative recommendations or withdrawal of
research coverage by analysts, publication of research reports or news stories about us, our competitors or our industry and changes in general political, economic, industry and market conditions and trends. 

Risks relating to future sales of our Common Shares 

We cannot predict the size of future issuances of our Common Shares or the effect, if any, that future issuances and sales of our Common Shares will have
on the market price of our Common Shares. Sales of substantial amounts of our Common Shares, or the perception that such sales could occur, may adversely affect prevailing market prices for our Common Shares. 

Risks relating to dividends 
 We currently expect to
retain all available funds for use in the operation and growth of our business and do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our Board, subject to
compliance with applicable law and any contractual provisions, pursuant to the Loan Agreement and other agreements for indebtedness we may incur, that restrict or limit our ability to pay dividends, and will depend upon, among other factors,
our results of operations, financial condition, earnings, capital requirements and other factors that our Board deems relevant. 
 DESCRIPTION OF
CAPITAL STRUCTURE 
 The following is a summary of the material attributes and characteristics of the Company’s authorized share capital.
This summary is qualified by reference to, and is subject to, and the detailed provisions of our Articles available under the Company’s profile on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com. 

Our authorized share capital consists of an unlimited number of Common Shares. As at the date of this Annual Information Form, there were 97,614,148
Common Shares issued and outstanding. Holders of our Common Shares are entitled to receive notice of, and to attend and vote at, all meetings of shareholders and to receive all notices and other documents required to be sent to shareholders. On a
poll, every shareholder is entitled to one vote for each Common Share held. The holders of Common Shares are entitled to dividends if, as and when declared by the Board and, upon the liquidation, dissolution or
winding-up of its affairs or other distribution of its assets for the purpose of winding-up its affairs, to receive, on a pro rata basis, all of the remaining assets of
the Company. The Common Shares do not carry any pre-emptive, subscription, redemption or conversion rights, nor do they contain any sinking fund or purchase fund provisions. 

DIVIDEND POLICY 
 We currently intend to
retain any future earnings to fund the development and growth of our business and do not currently anticipate paying dividends on the Common Shares. Any determination to pay dividends in the future will be at the discretion of the Board and will
depend on many factors, including, among others, our financial condition, current and anticipated cash requirements, contractual restrictions and financing agreement covenants, and other factors that our Board may deem relevant. 

The Loan Agreement, or certain other agreements that the Company may enter into from time to time for indebtedness, prohibits us from paying dividends
at any time at which a default or event of default has occurred and is continuing, or if a default or event of default would exist as a result of paying the dividend. 

  
 27 

 MARKET FOR COMMON SHARES 

Trading Price and Volume 
 The Common Shares are currently
listed and posted for trading on the TSX-V under the symbol ‘‘VERY.V’’. Our Common Shares were initially listed on the CSE on June 16, 2020 until March 16, 2021 and thereafter on
the TSX-V, where the Common Shares commenced trading on March 17, 2021. The following table sets forth the price ranges and traded volume of Common Shares in 2020 as reported by the CSE: 

 

													
	 Period
	  	High
($)	 	  	Low
($)	 	  	Volume	 
	 June 17 – June 30
	  	 	2.49	 	  	 	0.46	 	  	 	23,674,486	 
	 July
	  	 	1.96	 	  	 	1.01	 	  	 	11,726,668	 
	 August
	  	 	1.68	 	  	 	1.11	 	  	 	8,095,762	 
	 September
	  	 	1.92	 	  	 	1.40	 	  	 	7,188,511	 
	 October
	  	 	3.47	 	  	 	1.51	 	  	 	20,692,863	 
	 November
	  	 	7.60	 	  	 	3.16	 	  	 	40,170,213	 
	 December
	  	 	9.50	 	  	 	5.83	 	  	 	23,092,312	 

 Prior Sales 
 The following
table summarizes details of the following securities that are not listed or quoted on a marketplace issued by VERY GOOD during the fiscal year ended December 31, 2020: 
  

											
	 Security
	  	Number of Securities	 	  	Exercise Price Per
Security($)	 	  	Date of Issue
	 Options(1)
	  	 	3,100,000	 	  	 	0.25	 	  	January 1, 2020
	 Warrants(2)
	  	 	16,667	 	  	 	0.15	 	  	January 31, 2020
	 Warrants(2)
	  	 	16,667	 	  	 	0.15	 	  	February 28, 2020
	 Warrants(2)
	  	 	16,667	 	  	 	0.15	 	  	March 31, 2020
	 Warrants(2)
	  	 	16,667	 	  	 	0.15	 	  	April 30, 2020
	 Warrants(2)
	  	 	16,667	 	  	 	0.15	 	  	May 31, 2020
	 Warrants(3)
	  	 	500,000	 	  	 	0.25	 	  	June 17, 2020
	 Warrants(4)
	  	 	1,288,000	 	  	 	0.25	 	  	June 17, 2020
	 Options(1)
	  	 	400,000	 	  	 	0.25	 	  	June 17, 2020
	 Options(1)
	  	 	120,000	 	  	 	0.25	 	  	June 24, 2020
	 Warrants(5)
	  	 	40,000	 	  	 	2.00	 	  	August 7, 2020
	 Warrants(5)
	  	 	522,548	 	  	 	1.30	 	  	August 7, 2020
	 Warrants(6)
	  	 	3,277,500	 	  	 	2.00	 	  	August 7, 2020
	 Options(1)
	  	 	60,000	 	  	 	1.56	 	  	August 7, 2020
	 Warrants(6)
	  	 	88,462	 	  	 	2.00	 	  	August 13, 2020
	 Warrants(7)
	  	 	45,000	 	  	 	1.60	 	  	August 13, 2020
	 Options(1)
	  	 	30,000	 	  	 	1.65	 	  	September 4, 2020
	 Options(1)
	  	 	5,506	 	  	 	1.70	 	  	September 17, 2020
	 Options(1)
	  	 	250,000	 	  	 	1.68	 	  	September 21, 2020
	 Warrants(7)
	  	 	60,000	 	  	 	1.51	 	  	October 6, 2020
	 Options(1)
	  	 	100,000	 	  	 	1.60	 	  	October 7, 2020

  
 28 

											
	 Security
	  	Number of Securities	 	  	Exercise Price Per
Security($)	 	  	Date of Issue
	 Options(1)
	  	 	50,000	 	  	 	1.74	 	  	October 13, 2020
	 Options(1)
	  	 	522,300	 	  	 	4.65	 	  	November 24, 2020
	 Warrants(8)
	  	 	2,032,307	 	  	 	4.50	 	  	December 4, 2020
	 Warrants(9)
	  	 	296,308	 	  	 	3.50	 	  	December 4, 2020
	 Warrants(10)
	  	 	15,000	 	  	 	4.50	 	  	December 4, 2020
	 Options(1)
	  	 	150,000	 	  	 	8.86	 	  	December 5, 2020
	 Options(1)
	  	 	5,000	 	  	 	9.07	 	  	December 7, 2020
	 Warrants(7)
	  	 	60,000	 	  	 	7.60	 	  	December 21, 2020
	 Warrants(11)
	  	 	225,000	 	  	 	5.65	 	  	June 7, 2021

 Notes: 
  

	(1)	 Represents a grant of stock options (“Options”) pursuant to our stock option plan to employees,
officers, directors and consultants. 

  

	(2)	 Represents Warrants issued to Drew Bonnell, our former Chief Financial Officer, Corporate Secretary and director, as
compensation under his consulting agreement with us. Each unit consisted of one Common Share and one-half of one Warrant. Each Warrant is exercisable to purchase one additional Common Share at a price of $0.30
until the date that is 12 months from issuance. 

  

	(3)	 Represents Warrants issued to Canaccord Genuity Corp. as compensation under an advisory services agreement. Each
Warrant entitles the holder to purchase one Common Share at a price of $0.25 until December 17, 2021. 

  

	(4)	 Represents 1,288,000 Warrants issued to Canaccord Genuity Corp. as compensation for services as agent for our IPO,
with each Warrant being exercisable for one Common Share at a price of $0.25 until June 17, 2021. 

  

	(5)	 Represents Warrants issued to Canaccord Genuity Corp. as compensation for services as underwriter for the August
Bought Deal. Each Warrant is exercisable at a price of $1.30 for one unit of the Company, each such unit comprised of one Common Share and one-half of one Warrant until February 7, 2022. The Warrants to
be received upon exercise of these units are exercisable for one Common Share until February 7, 2022 at a price of $2.00. 

  

	(6)	 Represents the Warrants forming part of the units issued pursuant to a Warrant indenture dated August 7, 2020
with Computershare Trust Company Inc., as warrant agent, as well as the Warrants issued to purchasers in the small private placement completed on August 13, 2020. Each Warrant is exercisable for one Common Share at an exercise price of $2.00
until February 7, 2022 in the case of Warrants issued pursuant to the August Bought Deal, and February 13, 2022 in the case of Warrants issued in the private placement. 

 

	(7)	 Represents Warrants issued to Brian Greenleaf, our former Chief Operating Officer, as compensation for his services to
VERY GOOD. The Warrants expire 12 months from their issuance. 

  

	(8)	 Represents the Warrants forming part of the units issued to purchasers in the December Bought Deal pursuant to a
Warrant indenture dated December 4, 2020 with Computershare Trust Company Inc., as warrant agent as well as the Warrants issued to the purchaser in the private placement also completed on December 4, 2020. Each Warrant is exercisable for
one Common Share at an exercise price of $4.50 until June 4, 2022. 

  

	(9)	 Represents Warrants issued to Canaccord Genuity Corp. as compensation for services as underwriter for the December
Bought Deal. Each Warrant is exercisable at a price of $3.50 for one unit of the Company, each such unit comprised of one Common Share and one-half of one Warrant until June 4, 2022. The Warrants to be
received upon exercise of these units are exercisable for one Common Share at a price of $4.50 until June 4, 2022. 

  

	(10)	 Represents 15,000 Warrants issued to Canaccord Genuity Corp. as compensation for services as underwriter for the
December Bought Deal, with each Warrant being exercisable for one Common Share at a price of $4.50 until June 4, 2022. 

  

	(11)	 Represents Warrants issued to the lender under the Loan Agreement. Each Warrant is exercisable for one Common Share at
a price of $5.62 until June 7, 2026. 

  
 29 

 ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER 

Escrow 
 The following table sets out the securities
that are currently held in escrow pursuant to an escrow agreement dated May 11, 2020 (the ‘‘Escrow Agreement’’), among our co-founders Mitchell Scott and James Davison, Tania
Friesen (James Davison’s spouse), our former Chief Financial Officer Drew Bonnell (collectively, the ‘‘Escrowed Parties’’) and Computershare Trust Company, as escrow agent: 

 

									
	 Designation of Class
	  	Number of Escrowed Securities(1)	 	  	Percentage of Class(2)	 
	 Common Shares
	  	 	21,060,425	 	  	 	21.6	% 

 Notes: 
  

	(1)	 On May 11, 2020, 27,850,006 Common Shares and 158,337 Warrants (the “Escrow Warrants”) were
deposited into escrow by the Escrowed Parties pursuant to the Escrow Agreement. On June 16, 2020, 2,788,334 Common Shares were released from escrow. On December 16, 2020 a further, 4,192,085 Common Shares were released from escrow. On
June 16, 2021, a further 4,212,085 Common Shares will be released from escrow. On December 16, 2021, 4,212,085 Common Shares will be released from escrow. On June 16, 2022, a further 4,212,085 Common Shares will be released from
escrow. On December 17, 2022, 4,212,085 Common Shares will be released from escrow. On June 16, 2023, a further 4,212,085 Common Shares will be released from escrow. As at the date of this Annual Information Form, all of the Escrow
Warrants have been exercised and the Common Shares resulting from such exercise have been deposited into escrow in accordance with the terms of the Escrow Agreement. 

	(2)	 Based on 97,614,148 Common Shares issued and outstanding. 

Shares Subject to Contractual Restriction on Transfer 

An aggregate of 139,676 Common Shares issued as partial compensation for the acquisition of the Cultured Nut are subject to a lock-up agreement pursuant to which the vendors of the Cultured Nut have agreed that they will not, directly or indirectly sell or agree to sell or announce any intention to sell any of these Common Shares until
February 24, 2022 without our prior written consent. 
 Similarly, an aggregate of 62,329 Common Shares issued as partial compensation for the
acquisition of Lloyd-James are also subject to a lock-up agreement and will be released from lock-up in increments of 62,329 Common Shares on each of June 11, 2021,
September 11, 2021, December 11, 2021 and March 11, 2022. 

  
 30 

 DIRECTORS AND OFFICERS 

The names and jurisdiction of residence of the directors and executive officers of the Company, their respective positions and offices held with the
Company and their principal occupation for the last five or more years are shown below as at the date hereof. Directors are elected to serve until the next annual meeting or until their successors are elected or appointed, unless their office is
earlier vacated. 
  

							
	 Name, Province or State

and Country of Residence
	  	 Current

Position/Office with
the Company
	  	 Held
Since
	  	 Principal Occupation During the Previous

Five Years

	 Mitchell Scott
 British Columbia,
Canada
	  	Co-Founder, Chief Executive Officer and Chairman	  	 2016
	  	 Co-Founder and Chief Executive Officer of VERY GOOD since December 2016 and prior thereto,
Global Director Sales & Promotion, Degica

				
	 James Davison
 British Columbia,
Canada
	  	Co-Founder, Chief Research & Development Officer and Director	  	 2016
	  	 Co-Founder, Chief Research & Development Officer of VERY GOOD since December 2016
and prior thereto, Chef in the UK and Canada

				
	 Ana Silva
 British Columbia,
Canada
	  	President and Director	  	 2021
	  	 President of VERY GOOD since January 2021. Prior thereto, Chief Financial Officer of Daiya Foods Inc. (November 2015 to December
2020)

				
	 Kamini Hitkari
 British Columbia,
Canada
	  	 Chief Financial Officer
 Corporate Secretary
	  	 2020
	  	 Chief Financial Officer of VERY GOOD since September 2020, prior thereto Chief Financial Officer of Experion Holdings Ltd. (March
2019 to September 2020), prior thereto Vice-President Strategic Finance at Aurora Cannabis (April 2018 to November 2018), and prior thereto Director of Finance Retail Banking & Wealth Management at HSBC Bank Canada (October 2012 to March
2018)

				
	 William (Bill) P. Tolany(1)(3) 

Texas, United States
	  	Director	  	 2020
	  	 Independent Consultant and prior thereto Regional Manager at Amazon (May 2015 to November 2017)

				
	 Dela Salem(1)(2)(3) 

British Columbia, Canada
	  	Director	  	 2019
	  	 Corporate Controller at J. Proust & Associates Inc. since February 2011

				
	 Sarah Hardy(1)(2)(3) 

British Columbia, Canada
	  	Director	  	 2019
	  	 Founder and Principal at Elevate Management Consulting Inc. since January 2018 and prior thereto Vice-President of Medical Sales at
Invictus MD (August 2018 to May 2019) and Director of Business Development at Stryder Motorfreight Inc. (April 2017 to July 2018)

 Notes: 
  

	(1)	 Member of our audit committee. 

	(2)	 Member of our compensation committee. 

	(3)	 Independent director for the purposes of National Instrument 58-101 –
Disclosure of Corporate Governance Practices of the Canadian Securities Administrators. 

  
 31 

 Ownership Interest 

As of the date of this Annual Information Form, our directors and executive officers, as a group, beneficially own, or control or direct, directly or
indirectly 26,840,208 Common Shares, representing 27.5% of our issued and outstanding Common Shares. 
 Cease Trade Orders 

To the knowledge of the Company, no director or executive officer of the Company (nor any personal holding company of any of such individuals) is, as of
the date of this Annual Information Form, or was within ten years before the date of this Annual Information Form, a director, chief executive officer or chief financial officer of any company (including the Company), that: (i) was subject to a
cease trade order (including a management cease trade order), an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, in each case that was in effect for a period of
more than 30 consecutive days (collectively, an “Order’’), that was issued while the individual was acting in the capacity as a director, chief executive officer or chief financial officer; or (ii) was subject to an Order
that was issued after the individual ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that individual was acting in the capacity as director, chief executive officer or
chief financial officer. 
 Bankruptcies 
 To the
knowledge of the Company, no director, executive officer or control person of the Company (nor any personal holding company of any of such individuals): (i) is, as of the date of this Annual Information Form, or has been within the ten years before
the date of this Annual Information Form, a director or executive officer of any company (including the Company) that, while that individual was acting in that capacity, or within a year of that individual ceasing to act in that capacity, became
bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its
assets; or (ii) has, within the ten years before the date of this Annual Information Form, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings,
arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold its assets. 
 Penalties or Sanctions 

To the knowledge of the Company, no director, executive officer or control person of the Company (nor any personal holding company of any of such
individuals) has been subject to: (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or
(ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable holder of Common Shares in deciding whether to vote for the proposed director. 

Conflicts of Interest 
 To the knowledge of the
Company, there are no known material existing or potential conflicts of interest among the Company’s directors, officers or other members of management as a result of their outside business interests except that certain of the Company’s
directors and officers serve as directors and officers of other companies, and therefore it is possible that a conflict may arise between their duties to the Company and their duties as a director or officer of such other companies. See
“Directors and Officers’’ and “Interest of Management and Others in Material Transactions”. 

  
 32 

 AUDIT COMMITTEE 

The primary function of the audit committee of the Board (the “Audit Committee’’) is to assist the Board in fulfilling its
financial oversight responsibilities by monitoring: (i) the quality and integrity of our financial statements and other financial information; (ii) the compliance of such statements and information with legal and regulatory requirements;
(iii) the qualifications, independence and performance of our independent external auditors; and (iv) the performance of our internal accounting procedures. In meeting these responsibilities, the Audit Committee monitors the financial
reporting process and internal control system; reviews and appraises the work of external auditors and provides an avenue of communication between the external auditors, senior management and the Board. The Audit Committee is also mandated to review
and approve all material related party transactions. 
 Audit Committee Charter 

Our Board has adopted a written charter, attached at Appendix A, setting forth the purpose, composition, authority and responsibility of our Audit
Committee (the “Audit Committee Charter’’), consistent with National Instrument 52-110 – Audit Committees (“NI
52-110’’). 
 Composition of the Audit Committee 

Our Audit Committee consists of three directors, all of whom are independent directors and financially literate within the meaning of NI 52-110. Our Audit Committee is comprised of Dela Salem (Chair), William (Bill) Tolany, and Sarah Hardy. 
 Relevant Education
and Experience of Audit Committee Members 
 Each of our Audit Committee members has an understanding of the accounting principles used to
prepare financial statements and varied experience as to the general application of such accounting principles, as well as an understanding of the internal controls and procedures necessary for financial reporting. 

Dela Salem – Dela is a professional accountant with over ten years of accounting experience with private and public companies focusing on
financial reporting, regulatory compliance, internal control and corporate finance activities. Dela’s experience includes financial reporting for Canadian and US listed companies with multiple international subsidiaries. Dela holds a Bachelor
of Business Administration from Simon Fraser University and is a Chartered Professional Accountant, CPA. 
 Sarah Hardy – Sarah holds an
MBA from the Richard Ivey School of Business at the University of Western Ontario and a Bachelor of Commerce from the Sauder School of Business at the University of British Columbia. 

William (Bill) P. Tolany – Bill has held senior roles in the marketing and ecommerce divisions of Whole Foods
Market and Amazon. Bills hold an MBA from the University of Texas at Austin and a Bachelor of Science from the University of Notre Dame. 
 External Auditor
Service Fee 
 For the period from incorporation to December 31, 2019 and for the fiscal year ended December 31, 2020, we incurred
the following fees by our former external auditors, DMCL LLP, Chartered Professional Accountants (“DMCL’’) and our current external auditors, KPMG LLP (“KPMG’’): 

  
 33 

																	
	 Fiscal year ended
	  	Audit fees(1)
($)	 	  	Audit related
fees(2)
($)	 	  	Tax fees(3)
($)	 	  	All other fees(4)
($)	 
	 December 31, 2020
	  	 	127,700	 	  	 	6,000	 	  	 	16,050	 	  	 	Nil	 
	 From incorporation to December 31, 2019
	  	 	40,488	 	  	 	50,000	 	  	 	Nil	 	  	 	368	 

 Notes: 
  

	(1)	 “Audit Fees” include fees necessary to perform the annual audit and quarterly reviews of VERY
GOOD’s consolidated financial statements and fees for review of tax provisions and for accounting consultations on matters reflected in the financial statements. 

	(2)	 “Audit-Related Fees” include services that are traditionally performed by the auditor. These
audit-related services include employee benefit audits, due diligence assistance, accounting consultations on proposed transactions, internal control reviews and audit or attest services not required by legislation or regulation. Audit Fees also
include audit or other attest services required by legislation or regulation, such as comfort letters, consents and reviews of securities filings. 

	(3)	 “Tax Fees” This category includes fees for tax compliance, tax planning and tax advice. Tax planning
and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions, and requests for rulings or technical advice from tax authorities. 

	(4)	 “All Other Fees” include all other non-audit services.

 KPMG replaced DMCL as auditors of VERY GOOD on December 16, 2020. 

Audit Committee Oversight 
 The Audit Committee has not
made any recommendations to the Board to nominate or compensate any auditor other than DMCL and KPMG. 
 Pre-Approval
Policies and Procedures 
 Other than as set forth in the Audit Committee Charter, the Audit Committee has not adopted any specific policies
and procedures for the engagement of non-audit services. 
 Exemption 

As a venture issuer, VERY GOOD is relying upon on the exemption in section 6.1 of NI 52-110 from the requirements
of Parts 3 (Composition of the Audit Committee) and 5 (Reporting Obligations). 
 PROMOTERS 

Mitchell Scott and James Davison founded our Company and, accordingly, may be considered to be a ‘‘Promoter’’ of VERY GOOD within
the meaning of applicable securities legislation in British Columbia. As of the date of this Annual Information Form, Mitchell Scott beneficially owns or controls, directly or indirectly, an aggregate of 13,924,533 Common Shares (representing
approximately 14.27% of the issued and outstanding Common Shares as of the date of this Annual Information Form), 900,000 Options at an exercise price of $0.25 per Common Share until December 31, 2024 (450,000 Options) and January 1, 2025
(450,000 Options) and 525,000 Options at an exercise price of $7.03 per Common Share until January 29, 2026. James Davison beneficially owns or controls, directly or indirectly, an aggregate of 12,640,000 Common Shares (representing
approximately 12.95% of the issued and outstanding Common Shares as of the date of this Annual Information Form, 900,000 Options at an exercise price of $0.25 per Common Share until December 31, 2024 (450,000 Options) and January 1, 2025
(450,000 Options) and 525,000 Options at an exercise price of $7.03 per Common Share until January 29, 2026. 

  
 34 

 LEGAL PROCEEDINGS AND REGULATORY ACTIONS 

In the ordinary course of business, we may become involved in legal, administrative, regulatory and other proceedings, actions, claims and inquiries
relating to our business. Management is not aware of any litigation outstanding, threatened or pending as of the date of this Annual Information Form by or against VERY GOOD or its subsidiaries which would be material to an investor of Common
Shares. See further discussion under “Risk Factors’’. 
 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL
TRANSACTIONS 
 Other than as set out in this Annual Information Form, there are no material interests, direct or indirect, of any of our
directors or executive officers, any Shareholder that beneficially owns, or controls or directs (directly or indirectly), more than 10% of any class or series of our Common Shares, or any associate or affiliate of any of the foregoing persons, in
any transaction within the three most recently completed financial years or during the current financial year that has materially affected or is reasonably expected to materially affect us or any of our subsidiaries. 

TRANSFER AGENT AND REGISTRAR 
 The transfer
agent and registrar for the Common Shares is Computershare Investor Services Inc. at its principal office in Vancouver, British Columbia. 

MATERIAL CONTRACTS 
 Other than contracts
entered into in the ordinary course of business, the following are the material contracts entered into by VERY GOOD during our most recently completed financial year, prior to the date of this Annual Information Form, or prior to the beginning of
our most recently completed financial year and that are still in effect. 
  

	(a)	 Escrow Agreement; 

  

	(b)	 Sub-Lease Agreement dated January 1, 2019 with Irene’s Bakery Ltd.,
is respect of the Victoria Facility; 

  

	(c)	 Lease Agreement with Hudson Retail Inc., for the Victoria Butcher Shop; 

 

	(d)	 Industrial Lease with MPW Properties Partnership in respect of the Rupert Facility; 

 

	(e)	 Lease dated January 22, 2020 with Nicola V.A. Nickel Inc. in respect of Mount Pleasant; 

 

	(f)	 Lease agreement dated August 31, 2020 with Traina Pacific, Inc., in respect of the Patterson Facility;

  

	(g)	 Warrant indenture dated August 7, 2020 with Computershare Trust Company Inc.; 

 

	(h)	 Warrant indenture dated December 4, 2020 with Computershare Trust Company Inc.; and 

 

	(i)	 Loan Agreement. 

Copies of these agreements have been filed with the Canadian securities regulatory authorities and are available on SEDAR, at www.sedar.com,
under our profile. Investors are encouraged to read the full text of such material agreements. 
 INTERESTS OF EXPERTS 

The Company’s auditor is KPMG LLP, Chartered Professional Accountants, located at Vancouver, British Columbia. KPMG LLP have prepared an
independent auditor’s report dated April 26, 2021 in respect of the consolidated financial statements of the Company as at December 31, 2020 and for the year then ended. KPMG LLP has advised that they are independent with respect to
the Company within the meaning of the Code of Professional Conduct of the Chartered Professional Accountants of British Columbia. 

  
 35 

 ADDITIONAL INFORMATION 

Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of our Company’s securities
and securities authorized for issuance under equity compensation plans, is contained in VERY GOOD’s management information circular for the 2021 annual meeting of shareholders. Additional financial information is provided in the
Company’s audited annual consolidated financial statements and related management’s discussion and analysis for our most recently completed fiscal year ended December 31, 2020. Such documentation, as well as additional information
relating to the Company, may be found under the Company’s profile on SEDAR at www.sedar.com. 

  
 36 

 APPENDIX A – AUDIT COMMITTEE CHARTER 

 

	I.	 MANDATE 

The Audit Committee (the ‘‘Committee’’) of the Board of Directors (the ‘‘Board’’)
of The Very Good Food Company Inc. (the ‘‘Company’’) shall assist the Board in fulfilling its financial oversight responsibilities. The Committee’s primary duties and responsibilities under this mandate are to serve
as an independent and objective party to monitor: 
  

	1.	 The quality and integrity of the Company’s financial statements and other financial information;

  

	2.	 The compliance of such statements and information with legal and regulatory requirements; 

 

	3.	 The qualifications and independence of the Company’s independent external auditor (the
‘‘Auditor’’); and 

  

	4.	 The performance of the Company’s internal accounting procedures and Auditor. 

 

	II.	 STRUCTURE AND OPERATIONS 

 

	A.	 Composition 

The Committee shall be comprised of three members, a majority of which shall be independent. 

 

	B.	 Qualifications 

Each member of the Committee must be a member of the Board. 

A majority of the members of the Committee shall not be officers or employees of the Company or of an affiliate of the Company. 

Each member of the Committee must be able to read and understand fundamental financial statements, including the Company’s balance
sheet, income statement, and cash flow statement. 
  

	C.	 Appointment and Removal 

The members of the Committee shall be appointed by the Board and shall serve until such member’s successor is duly elected and
qualified or until such member’s earlier resignation or removal. Any member of the Committee may be removed, with or without cause, by a majority vote of the Board. 
  

	D.	 Chair 

Unless the Board shall select a Chair, the members of the Committee shall designate a Chair by the majority vote of all of the members of
the Committee. The Chair shall call, set the agendas for and chair all meetings of the Committee. 
  

	E.	 Sub-Committees 

The Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the
authority to grant pre-approvals of audit and permitted non-audit services, provided that a decision of such subcommittee to grant a
pre-approval shall be presented to the full Committee at its next scheduled meeting. 

  
 37 

	F.	 Meetings 

The Committee shall meet at least once in each fiscal year, or more frequently as circumstances dictate. The Auditor shall be given
reasonable notice of, and be entitled to attend and speak at, each meeting of the Committee concerning the Company’s annual financial statements and, if the Committee feels it is necessary or appropriate, at every other meeting. On request by
the Auditor, the Chair shall call a meeting of the Committee to consider any matter that the Auditor believes should be brought to the attention of the Committee, the Board or the shareholders of the Company. 

At each meeting, a quorum shall consist of a majority of members that are not officers or employees of the Company or of an affiliate of
the Company. 
 As part of its goal to foster open communication, the Committee may periodically meet separately with each of
management and the Auditor to discuss any matters that the Committee believes would be appropriate to discuss privately. In addition, the Committee should meet with the Auditor and management annually to review the Company’s financial
statements in a manner consistent with Section III of this Charter. 
 The Committee may invite to its meetings any director, any
manager of the Company, and any other person whom it deems appropriate to consult in order to carry out its responsibilities. The Committee may also exclude from its meetings any person it deems appropriate to exclude in order to carry out its
responsibilities. 
  

	III.	 DUTIES 

  

	A.	 Introduction 

The following functions shall be the common recurring duties of the Committee in carrying out its purposes outlined in Section I of this
Charter. These duties should serve as a guide with the understanding that the Committee may fulfill additional duties and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory or other
conditions. The Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time related to the purposes of the Committee outlined in Section I of this Charter. 

The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern which the
Committee in its sole discretion deems appropriate for study or investigation by the Committee. 
 The Committee shall be given full
access to the Company’s internal accounting staff, managers, other staff and Auditor as necessary to carry out these duties. While acting within the scope of its stated purpose, the Committee shall have all the authority of, but shall remain
subject to, the Board. 
  

	B.	 Powers and Responsibilities 

The Committee will have the following responsibilities and, in order to perform and discharge these responsibilities, will be vested with
the powers and authorities set forth below, namely, the Committee shall: 
 Independence of Auditor 

 

	1)	 Review and discuss with the Auditor any disclosed relationships or services that may impact the objectivity and
independence of the Auditor and, if necessary, obtain a formal written statement from the Auditor setting forth all relationships between the Auditor and the Company, consistent with Independence Standards Board Standard 1. 

  
 38 

	2)	 Take, or recommend that the Board take, appropriate action to oversee the independence of the Auditor.

  

	3)	 Require the Auditor to report directly to the Committee. 

 

	4)	 Review and approve the Company’s hiring policies regarding partners, employees and former partners and employees
of the Auditor and former independent external auditor of the Company. 

 Performance & Completion by Auditor of its Work

  

	5)	 Be directly responsible for the oversight of the work by the Auditor (including resolution of disagreements between
management and the Auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work. 

  

	6)	 Review annually the performance of the Auditor and recommend the appointment by the Board of a new, or re-election by the Company’s shareholders of the existing, Auditor. 

  

	7)	 Pre-approve all auditing services and permitted
non-audit services (including the fees and terms thereof) to be performed for the Company by the Auditor unless such non-audit services: 

 

	 	(a)	 which are not pre-approved, are reasonably expected not to constitute, in the
aggregate, more than 5% of the total amount of revenues paid by the Company to the Auditor during the fiscal year in which the non-audit services are provided; 

 

	 	(b)	 were not recognized by the Company at the time of the engagement to be
non-audit services; and 

  

	 	(c)	 are promptly brought to the attention of the Committee by management and approved prior to the completion of the audit
by the Committee or by one or more members of the Committee who are members of the Board to whom authority to grant such approvals has been delegated by the Committee. 

Internal Financial Controls & Operations of the Company 
  

	8)	 Establish procedures for: 

  

	 	(a)	 the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting
controls, or auditing matters; and 

  

	 	(b)	 the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or
auditing matters. 

 Preparation of Financial Statements 

 

	9)	 Discuss with management and the Auditor significant financial reporting issues and judgments made in connection with
the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting principles, any major issues as to the adequacy of the Company’s internal controls and
any special steps adopted in light of material control deficiencies. 

  

	10)	 Discuss with management and the Auditor any correspondence with regulators or governmental agencies and any employee
complaints or published reports which raise material issues regarding the Company’s financial statements or accounting policies. 

  

	11)	 Discuss with management and the Auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company’s financial statements. 

  
 39 

	12)	 Discuss with management the Company’s major financial risk exposures and the steps management has taken to
monitor and control such exposures, including the Company’s risk assessment and risk management policies. 

  

	13)	 Discuss with the Auditor the matters required to be discussed relating to the conduct of any audit, in particular:

  

	 	(i)	 The adoption of, or changes to, the Company’s significant auditing and accounting principles and practices as
suggested by the Auditor or management. 

  

	 	(ii)	 Any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or
access to requested information, and any significant disagreements with management. 

 Public Disclosure by the Company 

 

	14)	 Review the Company’s annual and quarterly financial statements, management discussion and analysis (MD&A),
annual information form, and management information circular before the Board approves and the Company publicly discloses this information. 

  

	15)	 Review the Company’s financial reporting procedures and internal controls to be satisfied that adequate
procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from its financial statements, other than disclosure described in the previous paragraph, and periodically assessing the
adequacy of those procedures. 

  

	16)	 Review any disclosures made to the Committee by the Company’s Chief Executive Officer and Chief Financial Officer
during their certification process of the Company’s financial statements about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who
have a significant role in the Company’s internal controls. 

 Manner of Carrying Out its Mandate 

 

	17)	 Consult, to the extent it deems necessary or appropriate, with the Auditor but without the presence of management,
about the quality of the Company’s accounting principles, internal controls and the completeness and accuracy of the Company’s financial statements. 

 

	18)	 Request any officer or employee of the Company or the Company’s outside counsel or Auditor to attend a meeting of
the Committee or to meet with any members of, or consultants to, the Committee. 

  

	19)	 Meet, to the extent it deems necessary or appropriate, with management and the Auditor in separate executive sessions
at least quarterly. 

  

	20)	 Have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other
consultants to advise the Committee advisors. 

  

	21)	 Make regular reports to the Board. 

 

	22)	 Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for
approval. 

  

	23)	 Annually review the Committee’s own performance. 

 

	24)	 Provide an open avenue of communication among the Auditor the Board. 

  
 40 

	25)	 Not delegate these responsibilities other than to one or more independent members of the Committee the authority to pre-approve, which the Committee must ratify at its next meeting, non-audit services to be provided by the Auditor. 

 

	C.	 Limitation of Audit Committee’s Role 

While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct
audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of
management and the Auditor. 

  
 41

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