Document:

EX-4.5

 Exhibit 4.5 
  

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

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

 Condensed Interim Consolidated Statements of Financial Position 

(Expressed in Canadian dollars, unaudited) 
  

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

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

 Nature and continuance of operations (Note 1) 

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

 

					
	 “Mitchell Scott”
	 	 “Dela Salem”
	 	
	Director	 	Director	 	

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

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

 Condensed Interim Consolidated Statements of Net Loss and Comprehensive Loss 

(Expressed in Canadian dollars, unaudited) 
  

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

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

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

 Condensed Interim Consolidated Statements of Changes in Equity (Deficiency) 

(Expressed in Canadian dollars except share amounts, unaudited) 
  

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

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

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

 Condensed Interim Consolidated Statements of Cash Flows 

(Expressed in Canadian dollars, unaudited) 
  

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

 Supplemental cash flow disclosures (Note 19) 

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

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	1.	 Nature and continuance of operations 

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

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

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

Covid-19 Estimation Uncertainty 

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

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

  
  

6 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	2.	 Basis of presentation and measurement 

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

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

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

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

  
 7 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	2.	 Basis of presentation and measurement (continued) 

 

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

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

Carrying value of inventory 

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

Business combinations 

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

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

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

  
 8 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	2.	 Basis of presentation and measurement (continued) 

 

 Leases 

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

	3.	 New Accounting Pronouncements 

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

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

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

 

	4.	 Accounts receivable 

 

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

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

  
 9 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	5.	 Inventory 

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

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

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

 

	6.	 Prepaids and deposits 

 

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

  

	7.	 Right-of-use assets

  

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

  
 10 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	7.	 Right-of-use assets
(continued) 

  

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

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

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

  

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

  

	8.	 Property and equipment 

 

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

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

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

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

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

  
 11 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	8.	 Property and equipment (continued) 

 

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

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

  

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

  

	9.	 Acquisitions 

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

 

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

 

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

 

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

 

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

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

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

  
 12 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	9.	 Acquisitions (continued) 

 

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

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

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

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

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

 

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

 

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

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

  
 13 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	9.	 Acquisitions (continued) 

 

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

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

  

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

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

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

	10.	 Accounts payables and accrued liabilities 

 

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

  
 14 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	11.	 Lease liabilities 

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

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

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

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

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

  
 15 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	12.	 Loans payable and other liabilities 

 

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

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

  
 16 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	13.	 Related party balances and transactions 

Related party transactions 

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

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

  

	14.	 Share capital 

Authorized share capital 

Unlimited number of common shares without par value. 

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

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

  

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

  

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

  

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

 

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

  

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

  

	15.	 Warrants 

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

 

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

  
 17 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	15.	 Warrants (continued) 

 

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

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

  

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

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

  

	16.	 Stock options 

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

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

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

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

  
 18 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	16.	 Stock options (continued) 

 

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

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

  

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

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

 

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

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

  
 19 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	17.	 Finance expense 

Finance expense is comprised of the following: 
  

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

  

	18.	 Other expense 

Other expense is comprised of the following: 
  

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

  

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

  

	19.	 Supplemental cash flow disclosures 

 

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

  
 20 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	20.	 Financial instruments and financial risk management 

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

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

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

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

  

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

 Interest risk

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

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

  
 21 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	20.	 Financial instruments and financial risk management (continued) 

 

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

Concentration of credit risk

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

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

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

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

  
 22 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	21.	 Employee benefit expense 

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

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

  

	22.	 Capital management 

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

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

  
 23 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	23.	 Commitments 

Finance leases 
  

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

 

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

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

  

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

  

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

  

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

  

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

  
 24 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	23.	 Commitments (continued) 

 

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

  

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

  

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

  

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

  

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

  

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

  
 25 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	23.	 Commitments (continued) 

 

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

  

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

  

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

  

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

 

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

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

  
 26 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	24.	 Segmented Information 

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

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

  

	25.	 Change in Presentation of Expenditures and Restatement 

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

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

  
 27 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

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

 

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

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

  
 28 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

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

 

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

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

  
 29 

 The Very Good Food Company | Condensed interim consolidated financial statements 

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

(Unaudited) 
  

	26.	 Events after the reporting period 

 

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

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

 

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

  

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

  

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

  
 30 

 

 
 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-4.6

 Exhibit 4.6 
  

 
 The Very Good Food Company | MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

 TABLE OF CONTENTS 
  

					
	 FORWARD-LOOKING INFORMATION
	  	 	2	 
		
	 2021 HIGHLIGHTS
	  	 	3	 
		
	 CORPORATE OVERVIEW
	  	 	5	 
		
	 OUR STRATEGIC PROGRESS
	  	 	8	 
		
	 OUTLOOK
	  	 	14	 
		
	 FINANCIAL PERFORMANCE REVIEW
	  	 	15	 
		
	 NON-GAAP FINANCIAL MEASURES
	  	 	15	 
		
	 QUARTERLY RESULTS
	  	 	23	 
		
	 CAPITAL MANAGEMENT
	  	 	23	 
		
	 RELATED PARTY TRANSACTIONS
	  	 	28	 
		
	 CRITICAL ACCOUNTING ESTIMATES
	  	 	29	 
		
	 RISKS AND UNCERTAINITIES
	  	 	29	 

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

  

 FORWARD-LOOKING INFORMATION 

The following management’s discussion and analysis (“MD&A”) of the financial condition and results of operation of The Very
Good Food Company Inc. (“VERY GOOD” or “the Company”), constitutes management’s review of the factors that affected the Company’s financial and operational performance for the three and six months period
ended June 30, 2021. 
 The 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 Company’s business strategy and growth plans; the
Company’s capital expenditures and operations; the scale and timing of the anticipated production capacity increases at its production facilities; the continued strong and increasing demand for VERY GOOD’s products; the strength of VERY
GOOD’s eCommerce platform and the number of its monthly subscribers; the timing for the launch of new product lines including the Butcher’s Select line and the benefits VERY GOOD expects to derive from any new product launches; the
attributes of VERY GOOD’s products and their ability to compete; VERY GOOD’s US retail expansion, the potential for future expansion into retail and foodservice, and its plans to extend its global footprint; VERY GOOD’s acquisition
strategy; and the impact of the COVID-19 pandemic on VERY GOOD’s business. 
 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 successful placement of VERY GOOD’s products in retail stores and strong e-Commerce growth; the availability of sufficient financing on reasonable terms to fund VERYGOOD’s capital and operating requirements, VERYGOOD’s ability to successfully enter new markets and manage its
international expansion, VERYGOOD’s ability to increase production capacity and obtain the necessary production equipment, the availability of labour as well as the accuracy of construction schedules and cost estimates for the commissioning of
production lines at VERYGOOD’s Rupert and Patterson facilities and the timely receipt of required permits, VERYGOOD’s relationship with its suppliers, distributors and third-party logistics providers, and the Company’s ability to
position VERYGOOD competitively, 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 in VERY GOOD’s most recent Annual Information Form filed with Canadian securities regulatory authorities
at www.sedar.com. 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 August 18, 2021 and is subject to change after such date. VERY GOOD disclaims any intent or obligation 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. 

  
 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 three and six months ended June 30, 2021. 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 unaudited condensed interim consolidated financial statements of the Company for the
three and six months ended June 30, 2021 and 2020, together with the notes thereto and the audited annual consolidated financial statements for 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 three and six months period ended June 30, 2021 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 15, 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 August 18, 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. 
 Q2 2021 HIGHLIGHTS 

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

Operational Metrics 
  

																					
	 	  	Three months
ended
June 30,	 	  	Three months
ended
March 31,	 	  	Three months
ended
June 30,	 	  	Six months
ended
June 30,	 	  	Six months
ended
June 30,	 
	 	  	2021	 	  	2021	 	  	2020	 	  	2021	 	  	2020	 
	 For the period ended:
	  				  				  				  				  			
	 Production volume sold by channel (units)
	  				  				  				  				  			
	 eCommerce
	  	 	216,121	 	  	 	198,170	 	  	 	92,381	 	  	 	414,291	 	  	 	113,939	 
	 Wholesale
	  	 	91,624	 	  	 	67,532	 	  	 	40,488	 	  	 	159,156	 	  	 	61,829	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		  	 	307,745	 	  	 	265,702	 	  	 	132,869	 	  	 	573,447	 	  	 	175,768	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Number of eCommerce orders
	  	 	24,025	 	  	 	23,181	 	  	 	11,194	 	  	 	47,206	 	  	 	13,635	 
	 As at period end:
	  				  				  				  				  			
	 Number of product SKUs manufactured
	  	 	20	 	  	 	19	 	  	 	13	 	  	 	20	 	  	 	13	 
	 Number of wholesale distribution points(1)
	  	 	1,869	 	  	 	1,356	 	  	 	757	 	  	 	1,869	 	  	 	757	 

  

	(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
June 30,	 	 	Three months
ended
March 31,(2)	 	 	Three months
ended
June 30,	 	 	Six months
ended
June 30,	 	 	Six months
ended
June 30,	 
	 	  	2021	 	 	2021	 	 	2020	 	 	2021	 	 	2020	 
	 Revenue by channel
	  				 				 				 				 			
	 eCommerce
	  	$	 2,206,403	 	 	$	 2,185,095	 	 	$	 846,134	 	 	$	 4,391,497	 	 	$	 964,642	 
	 Wholesale
	  	 	455,055	 	 	 	345,905	 	 	 	169,859	 	 	 	800,960	 	 	 	274,771	 
	 Butcher Shop, Restaurant and Other
	  	 	119,223	 	 	 	112,083	 	 	 	71,797	 	 	 	231,307	 	 	 	186,929	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
		  	$	 2,780,681	 	 	$	2,643,083	 	 	$	 1,087,790	 	 	$	5,423,764	 	 	$	 1,426,342	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Gross Profit(1)
	  	$	 677,859	 	 	$	 590,837	 	 	$	 396,995	 	 	$	 1,268,696	 	 	$	 278,495	 
	 Adjusted Gross Profit(1)
	  	$	 1,079,490	 	 	$	 979,008	 	 	$	 468,570	 	 	$	2,058,496	 	 	$	 453,584	 
	 Gross Margin(1)
	  	 	24	% 	 	 	22	% 	 	 	36	% 	 	 	23	% 	 	 	20	% 
	 Adjusted Gross Margin(1)
	  	 	39	% 	 	 	37	% 	 	 	43	% 	 	 	38	% 	 	 	32	% 
	 Net Loss
	  	$	(12,500,733	) 	 	$	(15,028,576	) 	 	$	(2,418,655	) 	 	$	(27,529,309	) 	 	$	(3,548,641	) 
	 Adjusted EBITDA net loss(1)
	  	$	(5,673,109	) 	 	$	(5,391,936	) 	 	$	(1,197,813	) 	 	$	(11,065,045	) 	 	$	(1,926,256	) 
	 Loss per share – basic and diluted
	  	$	 (0.13	) 	 	$	 (0.15	) 	 	$	 (0.05	) 	 	$	 (0.28	) 	 	$	 (0.07	) 
	 Weighted average number of shares outstanding – basic and diluted
	  	 	97,603,729	 	 	 	97,156,969	 	 	 	49,259,877	 	 	 	97,381,583	 	 	 	47,404,458	 

  

	(1) 	 See “Non-GAAP Financial Measures” starting on page 15 for more
information on non-GAAP financial measures and reconciliations thereof. 

	(2) 	 Certain operating expenses such as share-based compensation and wages from the March 31, 2021 period has been
reclassified to conform to the change in presentation of expenditures adopted by the Company, which changed the Gross Profit from $534,120 to $590,837, Gross Margin from 20% to 22%, the Adjusted Gross Profit from $953,372 to $979,008, and the
Adjusted Gross Margin from 30% to 37%. 

 OUR BUSINESS 

The Very Good Food Company Inc. is an emerging plant-based food technology company that designs, develops, produces, distributes and sells a variety
of plant-based meat, cheese and other food alternatives. 
 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 800 – 885 West Georgia Street, Vancouver, British Columbia, BC V6C 3H1. 

The Company’s shares commenced trading on the Canadian Securities Exchange (the “CSE”) under the symbol “VERY” on
June 18, 2020. During the year ended December 31, 2020, 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
June 30, 2021, the Company’s product portfolio consisted of 20 products: 14 products developed under The Very Good Butchers brand and 6 products developed under The Very Good Cheese Co. brand. As at June 30, 2021, our products
were produced in three of our four leased facilities located in Victoria, Vancouver and Esquimalt, BC in 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 (including Food Service) 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 and Amazon US, 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 June 30, 2021, the Company had over 2,028 active subscribers across Canada and in the US compared to 800 active subscribers at the end of fiscal 2020. 

eCommerce sales allow us to capitalize on demand by shipping products directly to consumers and transforming demand into a recurring
income stream via reorders. For the three and six months period ending June 30, 2021, the Company shipped 24,025 and 47,206 eCommerce orders respectively which represents 115% and 246% of the total eCommerce orders processed in the three and
six months ending June 30, 2020. The Company monitors weekly orders versus inventory on hand and manages marketing efforts in lock step with production capacity. 
  

					
		  	Six months ended
	eCommerce	  	 June 30, 2021

$4,391,497
	  	 June 30, 2020

$964,642

  
 5 

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

  

	(2)	 Wholesale – 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. As at June 30, 2021, these Wholesale Accounts include national grocery store chains including, but not limited to, Whole Foods Markets, Thrifty Foods
(Sobeys), Fresh St. Market, Choices Markets, IGA, and Farmboy; as well as smaller independent grocers. In the US, the Wholesale Accounts include Erewhon, Harmons and GTFO It’s Vegan, an online retailer. The Company had approximately 1,869
retail distribution points in Canada in 432 stores (the “Wholesale Accounts”) as at June 30, 2021. See “Our Strategic Progress” section for further details. 

 

					
		  	Six months ended
	Wholesale	  	 June 30, 2021

$800,960
	  	 June 30, 2020

$274,771

  

	(3)	 Butcher Shop & Restaurant Flagship Store – The Butcher Shop & Restaurant
located in Victoria, BC 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. 

 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: 

  
 6 

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

  

							
	 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 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. 

As at June 30, 2021, VERY GOOD had four leased production facilities. Consistent with our growth strategy, we entered into two new food production
facility leases during fiscal year 2020 for the Rupert Facility and the Patterson Facility, 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. Through the acquisition of the The Cultured Nut Inc. (the “Cultured Nut”) in February 2021, VERY GOOD took over the lease of their existing production facility located in Esquimalt, BC (the
“Fairview Facility”). 
  

			
	 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): C$20-25 million
  

•  Start date of food production: May 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:
US$30-50 million
  

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

		
	 Victoria Facility
	  	 •  Location: Victoria, BC, Canada

 
 •  Size:
3,000 square feet
  

•  Potential annual production capacity: 1.375 million lbs

 
 •  Commercial
kitchen equipment
  

•  Start date of food production: 2019

		
	 Fairview Facility
	  	 •  Location: Esquimalt, BC, Canada

 
 •  Size:
3,000 square feet
  

•  Potential annual production capacity: 500,000 lbs

 
 •  Expected
capital expenditures: C$0.5 million
  

•  Commercial kitchen equipment

 
 •  Start date
of food production: 2019

 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 million lbs of annualized product to be phased in this year. The Company took
possession of the lease in January 2021. 

  
 8 

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

  

 VERY GOOD commissioned its first line of production (“Line 1”) in April 2021. Line 1
will initially produce 7+ SKUs of its popular The Very Good Butcher’s product line, including “The Very Good Burger”, “A Very British Banger”, “Pepperoni”, “Smokin’ Burger”, “Smokin’
Banger”, “Very Good Dog”, “The Very Good Steak”, which are already being sold in the market. The Company began testing these initial 7 SKUs in May 2021. 

While the production of saleable product is now underway, during this testing phase, saleable product was manufactured in limited quantities in Q2 2021.
Over the course of the next few months, the production team will continue to ramp up the production from Line 1 and will be targeting 40,000 lbs per day on average starting in Q4 2021; gradually increasing to an average of 60,000 lbs per day in
early Q1 2022. This additional capacity will support the increasing demand for VERY GOOD’s products which have an average sales price of CDN$14 per lb in e-Commerce and CDN$7 per lb in wholesale. 

The second production line at the Rupert Facility (“Line 2”) is planned to be commissioned in Q4 2021 with food production starting in
early Q1 2022. Line 2 is expected to initially produce 6+ SKUs of our newly announced gluten-free and soy-free Butcher’s Select Line of plant-based meat alternatives meant to compete on taste and texture
with the likes of some of our competitors. Select SKUS of the Butcher’s Select line will be available this summer online with the full suite hitting retailers’ shelves in the months to follow. 

The commissioning of production lines at both the Rupert and Patterson facilities are experiencing some challenges due to the COVID-19 pandemic. We are experiencing delays in the receipt of production equipment from Europe from manufacturer and shipping setbacks. In both Vancouver and California, we are experiencing delays in hiring due to
labour shortages as COVID restrictions lighten and businesses open again. We anticipate that these challenges will continue in the near-term and potentially slow the targeted ramp up planned to meet the fast-growing demand for our products in North
America. 
 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. 
 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. In August 2021, the Company announced that food production will initially be launched in September 2021 on commercial-grade kitchen equipment in order to
fast-track the production of Taco Stuff’er, one of the VER GOOD’s most in-demand SKUs, while the installation of the facility’s first major production line (“Line 1”) is underway for
targeted completion in Q2 2022. Once commissioned, Patterson’s Line 1 will produce The Very Good Butchers’ various unique products which have not yet been scaled, including the popular Holiday roast “The Stuffed Beast” and the
jackfruit based “Ribz”, and will have the capability to make the brand’s original suite of products. The production of Taco Stuff’er will also be transitioned to Line 1 once commissioned, which is expected to produce an average
of 27 million lbs of product per year when fully operational. 
 Victoria Facility 

The Victoria Facility will continue to produce our existing SKUs as well as focus on producing any new product in development at a low scale to test in
the market. In May 2021, the Company announced the achievement of a new production target at its Victoria Facility resulting in an increase in weekly production volume from 20,000 lbs at the end of fiscal 2020 to approximately 24,000 lbs per week
due to the addition of new equipment and production labour. 

  
 9 

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

  

 Fairview Facility 

Through the acquisition of The Cultured Nut, VERY GOOD took over the lease of the Fairview Facility located in Esquimalt, BC. The Company is currently
scaling production to 500,000 lbs per year, the equivalent of 130,000 units per month through tenant improvements and the addition of capital equipment as well as 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 5 products has been rebranded to The Very Good Cheese Co. and was launched in June 2021 through VERY GOOD’s eCommerce and
will be relaunched in its wholesale distribution channel in Q4 2021 in Canada with US wholesale starting in Q1 2022. 
 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 lines. 
 VERY GOOD recently announced its new gluten-free and
soy-free Butcher’s Select product line in July 2021. The Butcher’s Select product range comprises of premium line of extra meaty artisanal meats made with real, minimally processed ingredients,
including pea protein, navy beans, chickpeas, garlic, onion, hemp seeds and organic peppers. This premium line of sausages, burgers and meatballs is gluten-free, soy-free, and will be Non-GMO verified. 
 With more consumers interested in plant-based products due to a focus on healthier and more
sustainable habits, more than half of US households are now purchasing plant-based foods. According to SPINS data released by the Good Food Institute and the Plant Based Foods Association in April 6, 2021, plant-based meat sales have
outpaced conventional animal product sales for the third consecutive year1. The Butcher’s Select line will not only appeal to households interested in a more plant-based diet but also extends
the Company’s consumer base to the estimated 30% of Americans who avoid gluten. 
 Butcher’s Select is made with real, minimally processed
ingredients, and is a ‘cut above’ other plant-based meats currently available. The new product line will diversify VERY GOOD’s portfolio of plant-based meats and position The Very Good Butchers brand in the alternative meat substitute
category where products are created to directly simulate their animal-based counterparts and which has been largely dominated by Beyond Meat and Impossible Foods. The products pack an extra meaty taste and texture and will be available through a
limited release on VERY GOOD’s eCommerce platform www.verygoodbutchers.com this month with a retail rollout across North America to follow. 

On May 12, 2021, VERY GOOD announced its new brand, The Very Good Cheese Co., and its lineup of five new plant-based cheese products. These new
SKUs will initially consist of: “Bold Cheddah”, a white cheddar style vegan cheese; “Cheedah”, a medium cheddar style vegan cheese; “Dill’ish”, a garlic and dill-havarti style vegan cheese; “Goud AF*”, a
smoky gouda style vegan cheese; “Pepper Jack”, a monterey jack style vegan cheese and “Sharp and Sassy”, a sharp flavor white cheddar style vegan cheese. The Very Good Cheese Co. products were made available in the US and Canada
in June 2021 through the Company’s eCommerce platforms and will be available in retail stores in Q4 2021. 
 These newly announced
plant-based cheeses follow the Company’s completed acquisition of The Cultured Nut Inc., a popular artisan vegan cheese producer known for its block-style cheeses. This accelerated brand launch is a key milestone in VERY GOOD’s growth
strategy focused on building an expansive plant-based product portfolio through a combination of organic development and strategic acquisitions. 

 

	1 	 Per new data released April 6, 2021 by the Plant Based Foods Association (PBFA) and The Good Food Institute (GFI)
https://gfi.org/press/plant-based-food-retail-sales-grow-27-percent-to-reach-7-billion-in-2020/ 

  
 10 

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

  

 The new dairy-free, plant-based cheese products have already been tested in the market, receiving
highly positive feedback from consumers. They join VERY GOOD’s growing portfolio of 14+ plant-based food options, including The Very Good Butchers’ Very Good Pepperoni and Very Good Dog launched last year. 

Expansion of Wholesale Distribution 
 We continue our efforts
to expand our Canadian wholesale distribution points during part of our strategic focus to meet demand and increase customer awareness resulting in revenue growth. 

Wholesale retail distribution in the US is a key component of our 2021 growth strategy. During the second quarter of 2021, VERY GOOD 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 In May 2021, VERY GOOD signed on with the
US distribution arm of United Natural Foods (“UNFI”), the largest publicly traded wholesale distributor of health and specialty food in North America. The Company previously entered into a distribution partnership with UNFI Canada
during the fourth quarter of 2020. Later in the second quarter, the Company announced a wholesale distribution agreement with KeHE Distributors, LLC (“KeHE”) a top pure play US wholesale food distributor of natural, organic,
speciality and fresh food brands across North America. The partnerships with Green Spoon, UNFI and KeHe are poised to significantly boost VERY GOOD’s wholesale retail distribution in the US lock step with the ramp up of production at the Rupert
Facility. These valued distribution partners have relationships with major grocers including Harmons Grocery, Erewhon Organic Grocer, Sprouts Farmers Market, Whole Foods, Thrive Market and Associated Food Stores. 

During the second quarter of 2021, VERY GOOD continued its
coast-to-coast expansion in Canada through its new wholesale distribution partnership with Horizon Grocery + Wellness, where the Company signed on with Save-On-Foods, Canada’s largest Western-based grocery retailer, to carry The Very Good Butchers suite of products in 184 of its retail stores across Canada. Save-on-Foods is the owner of several well-established banners including its namesake
Save-On-Foods stores as well as PriceSmart Foods, Urban Fare and Bulkley Valley Wholesale.
Save-on-Foods will stock its shelves with The Very Good Butchers’ top 5 SKUs including The Very Good Burger, Smokin’ Bangers, Taco Stuff’er, Very Good
Pepperoni and the Very Good Dog in 177 of its retail stores and 7 Urban Fare locations across Canada starting August 1, 2021. This brought the number of retail stores carrying The Very Good Butchers products in Canada as at June 30, 2021,
to 573 stores. 
 In August 2021, the Company announced that it is now present in 754 stores across North America with more than 100+ stores in the US
set to carry VERY GOOD’s suite of products under its core brand, The Very Good Butchers. 
 We expect to be on the shelves of many more stores by
the end of the year, but more so in the first quarter of 2022, after major retailers’ fall 2021 product category review periods. Retailers have set periods in their annual calendars, called product category review periods, where new entrants
into their stores are considered. Food suppliers, such as VERY GOOD, present their innovative products along samples, marketing materials and suggested pricing to have their SKUs selected by the retailers. For major retailers, the next product
category review period is this fall for entry onto their shelves in Q1 2022. 
 Expansion of eCommerce 

In June 2021, the Company launched an Amazon US storefront. US-based customers now have access to the
Company’s popular bean-based products through their well-known Butcher Boxes which include some of The Very Good Butchers best sellers such as Very Good Pepperoni, The Very British Banger, The Very Good Burger and the Taco Stuff’er. VERY
GOOD’s Butcher boxes will also be available through Amazon’s app making it even easier for consumers to order its delicious products. 
 In
August 2021, the Company launched its UK eCommerce website allowing UK-based customers to order VERY GOOD’S Butcher Boxes. Consumer demand for plant-based foods is growing at a rapid pace in the U.K.
Google Trends listed the UK as the number one growing country searching veganism; and a recent survey conducted by Finder shows that the number of vegans increased by 40% in 2020. The Very Good Butchers is

  
 11 

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

  

 
on a mission to make plant-based foods not only nutritious and delicious, but approachable and accessible across the globe. 

Since the privacy updates implemented by Apple in April 2021 and the changes Facebook made to their advertising tools shortly after, the data collection
features used by advertisers have become less effective. As a result, VERY GOOD, along with other direct to consumer businesses, have been limited in the ways we can target consumers and measure the success of specific ad campaigns. The cost of
digital marketing initiatives also continues to rise with the lightning of COVID restrictions and as more businesses come back online. Even with these rapidly shifting changes in policies and the marketing environment, we continue to steadily
grow our eCommerce channel quarter over quarter in 2021. 
 Food Services and Meal Kit Services 

Entering the food service industry and meal kit category is a natural growth opportunity for VERY GOOD as the brand continues to earn positive
recognition and see significant demand from retailers, distributors and consumers. 
 The Company announced in June 2021 that it has partnered with
Vancouver-based homegrown meal kit company, Fresh Prep, to add VERY GOOD’s innovative plant-based food products to its extensive menu of recipes and meal kits. The partnership with Fresh Prep marks VERY GOOD’s entry into the food service
and meal kit space representing the latest milestone in its growth strategy, which focuses on making its diversified line of minimally processed, high-quality plant-based foods easily accessible to its growing consumer base. Fresh Prep is
Canada’s most sustainable meal kit company with more than 75% of ingredients and add-on items supplied by local companies. VERY GOOD’s popular The Very Good Burger, Smokin’ Burger, and
Smokin’ Bangers will be a part of Fresh Prep’s add-on menu, and will be marketed along with their BBQ kits and other summer grilling campaigns. 

Subsequently, in June 2021, VERY GOOD entered into an arrangement with Copper Branch, the world’s largest plant-based restaurant franchise with
over 40 locations across North America. Copper Branch will make The Very Good Butchers’ delicious and nutritious plant-based products available to its customers to purchase from branded in-store freezers.
The quick service chain will initially set up the branded freezers in eight Copper Branch locations across Canada starting this summer. This partnership marks VERY GOOD’s second step into the North American food service industry. 

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 M&A strategy, the Company completed the
acquisition of The Cultured Nut Inc., 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. The Company
rebranded Cultured Nut’s product line under a new brand called The Very Good Cheese Co. which was launched in June 2021 and are available via eCommerce in the US and Canada with a planned retail rollout in the latter part of the year. This
marks the first accretive acquisition for VERY GOOD at a time when the plant-based industry is experiencing tremendous growth. 
 The acquisition of
Cultured Nut 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. 

  
 12 

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

  

 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.

The acquisition of Lloyd-James 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. 
 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 the latter part of 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 pick, pack and ship for our eCommerce orders and wholesale palletize for retail orders. 

With the launch of our UK eCommerce platform in August 2021, the Company announced a distribution partnership with Peter Green Chilled, a leading 3PL
logistics provider with over 19,000 points of distribution throughout the UK and Europe, to support the Company’s UK eCommerce launch in August 2021. Peter Green Chilled will be our Importer of Record to help distribute the Company’s
delicious and wholesome plant-based products first in the UK, and then, Europe. Peter Green Chilled offers a full complement of 3PL logistics services including importing, customs clearance, warehousing and transportation of food products throughout
the UK and Europe. We are currently exploring 3PL partnerships in Europe with plans to launch an online platform in the European Union late in the fourth quarter of 2021. 

Victoria Flagship Store 
 In January 2021, we announced the
launch of a new flagship Butcher Shop & 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 & 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 tentatively scheduled for an official opening late in the third quarter. There could be possible delays in opening due to the demand for
tradespeople increasing as businesses start to operate again from the lightening of COVID-19 restrictions. 
 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 and took possession on September 1, 2020. Mount Pleasant will be our second flagship store with a retail front featuring our Butcher Shop & 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 the fourth quarter of 2021. 

  
 13 

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

  

 The Mount Pleasant Flagship Store will be our second Butcher Shop & Restaurant, with the first
located in Victoria, BC. We believe these flagship stores are key marketing and branding tools which allow new consumers to sample our products. 
 Financings

 On June 7, 2021, the Company announced that it has entered into a senior secured credit facility (the “Credit Facility”) with
Waygar Capital Inc. (“Waygar Capital” or the “Agent”), as agent for Ninepoint Canadian Senior Debt Master Fund L.P. (“Ninepoint Partners” or the “Lender”). The Credit Facility consists of a C$20 million
revolving line of credit and a C$50 million senior secured asset backed term loan. All amounts drawn are subject to specific borrowing requirements and 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 has a term of 24 months with an option to renew, upon mutual consent, for another 12 months and is secured by a first-priority security interest on substantially all of VERY GOOD’s assets (refer to
Note 12 of the condensed interim consolidated financial statements). The amount we may draw under the term loan at any given time is tied to a prescribed proportion of the appraised value of our eligible equipment from time to time. Only certain
equipment may be financed, and no value is given for equipment installation costs. As of June 30, 2021, the Company received total net proceeds of $1,891,092 from the Credit Facility. 

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

OUTLOOK 
 There are no changes to the outlook disclosed in the
2020 Annual MD&A. 
 COVID-19 

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 production facilities, production
ramp-up delays, interruptions in our supply chain and distribution network, or new indoor dining restrictions at our Victoria Flagship Store 

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 and mitigate the direct impacts of COVID-19. However, during the second quarter ended June 30, 2021, our operations were
affected by indirect impacts of the pandemic through delays in the delivery of production equipment as well as a tightening of the local labour markets in the areas surrounding our Rupert and Patterson facilities which made it more challenging to
secure the personnel needed to staff up operations. Taken together these developments, if prolonged, may slow our targeted ramp-up. In addition, our Victoria Flagship Store had curtailed operations for a
significant portion of the quarter due to government mandated closures for in-restaurant dining which were in effect until late May. 

The extent of the impact of COVID-19 on future periods will depend on future developments, all which are
uncertain and cannot be predicted, including the duration or resurgence of the pandemic, government responses and health and safety measures or directives put in place by public health authorities, and sustained pressure on global supply chains
causing supply and demand imbalances. 

  
 14 

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

  

 FINANCIAL PERFORMANCE REVIEW 

Selected Financial Information 
  

																					
	 	  	Three months
ended
June 30,	 	 	Three months
ended
March 31,(2)	 	 	Three months
ended
June 30,	 	 	Six months
ended
June 30,	 	 	Six months
ended
June 30,	 
	 	  	2021	 	 	2021	 	 	2020	 	 	2021	 	 	2020	 
	 Revenue
	  	$	2,780,681	 	 	$	2,643,083	 	 	$	1,087,790	 	 	$	5,423,764	 	 	$	1,426,342	 
	 Procurement expense
	  	 	(2,102,822	) 	 	 	(2,052,246	) 	 	 	(690,795	) 	 	 	(4,155,068	) 	 	 	(1,147,847	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Gross profit(1)
	  	$	677,859	 	 	$	590,837	 	 	$	396,995	 	 	$	1,268,696	 	 	$	278,495	 
	 Gross margin (1)
	  	 	24	% 	 	 	22	% 	 	 	36	% 	 	 	23	% 	 	 	20	% 
	 Fulfilment expense
	  	 	(2,045,714	) 	 	 	(1,982,895	) 	 	 	(415,134	) 	 	 	(4,028,609	) 	 	 	(491,593	) 
	 General and administrative expense
	  	 	(6,834,880	) 	 	 	(9,574,557	) 	 	 	(723,599	) 	 	 	(16,409,437	) 	 	 	(1,335,815	) 
	 Marketing and investor relations expense
	  	 	(2,579,656	) 	 	 	(2,146,345	) 	 	 	(740,231	) 	 	 	(4,726,001	) 	 	 	(903,805	) 
	 Research and development expense
	  	 	(515,965	) 	 	 	(366,020	) 	 	 	(65,074	) 	 	 	(881,985	) 	 	 	(162,824	) 
	 Pre-production expense
	  	 	(656,288	) 	 	 	(885,535	) 	 	 	—  	 	 	 	(1,541,823	) 	 	 	—  	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Operating loss
	  	 	(11,954,644	) 	 	 	(14,364,515	) 	 	 	(1,547,043	) 	 	 	(26,319,159	) 	 	 	(2,615,542	) 
	 Finance expense
	  	 	(405,947	) 	 	 	(357,030	) 	 	 	(854,346	) 	 	 	(762,977	) 	 	 	(912,333	) 
	 Other expense
	  	 	(140,142	) 	 	 	(307,031	) 	 	 	(17,266	) 	 	 	(447,173	) 	 	 	(20,766	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Net loss
	  	$	(12,500,733	) 	 	$	(15,028,576	) 	 	$	(2,418,655	) 	 	$	(27,529,309	) 	 	$	(3,548,641	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted gross profit(1)
	  	$	1,079,490	 	 	$	979,008	 	 	$	468,570	 	 	$	2,058,496	 	 	$	453,584	 
	 Adjusted gross margin(1)
	  	 	39	% 	 	 	37	% 	 	 	43	% 	 	 	38	% 	 	 	32	% 
	 Adjusted general and administrative expense(1)
	  	$	2,208,555	 	 	$	2,200,836	 	 	$	497,697	 	 	$	4,409,390	 	 	$	863,232	 
	 Adjusted EBITDA loss(1)
	  	$	(5,673,109	) 	 	$	(5,391,936	) 	 	$	(1,197,813	) 	 	$	(11,065,045	) 	 	$	(1,926,256	) 

  

	(1) 	 See “Non-GAAP Financial Measures” starting on page 15 for more
information on non-GAAP financial measures and reconciliations thereof. 

	(2) 	 Certain operating expenses from the March 31, 2021 period had been reclassified to conform to the change in
presentation of expenditures adopted by the Company. A total of $948,431 from general and administrative expenses and $56,717 from procurement expense mainly related to share-based compensation and wages were reclassified, of which $562,068 were
reclassified to fulfilment expense, $400,027 were reclassified to marketing and investor relations expense, and $43,052 were reclassified to pre-production expense. There was no impact to the net loss as
reported in March 31, 2021. 

 NON-GAAP FINANCIAL MEASURES

Non-GAAP financial measures are metrics 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. 

  
 15 

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

  

 Adjusted EBITDA 

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
June 30,	 	 	Three months
ended
March 31,	 	 	Three months
ended
June 30,	 	 	Six months
ended
June 30,	 	 	Six months
ended
June 30,	 
	 	  	2021	 	 	2021	 	 	2020	 	 	2021	 	 	2020	 
	 Net loss as reported
	  	$	(12,500,733	) 	 	$	(15,028,576	) 	 	$	(2,418,655	) 	 	$	(27,529,309	) 	 	$	(3,548,641	) 
	 Adjustments:
	  				 				 				 				 			
	 Depreciation
	  	 	512,168	 	 	 	329,484	 	 	 	104,089	 	 	 	841,652	 	 	 	154,717	 
	 Loss on disposal of equipment
	  	 	2,679	 	 	 	19,882	 	 	 	—  	 	 	 	22,561	 	 	 	–  	 
	 Gain on termination of lease
	  	 	(239	) 	 	 	(1,361	) 	 	 	—  	 	 	 	(1,600	) 	 	 	–  	 
	 Finance expense
	  	 	402,432	 	 	 	361,750	 	 	 	89,346	 	 	 	764,182	 	 	 	147,333	 
	 Share-based compensation
	  	 	5,835,989	 	 	 	8,774,009	 	 	 	172,083	 	 	 	14,609,998	 	 	 	450,011	 
	 Shares, units and warrants issued for services
	  	 	74,595	 	 	 	152,876	 	 	 	90,324	 	 	 	227,471	 	 	 	105,324	 
	 Loss on settlement of debt
	  	 	—  	 	 	 	—  	 	 	 	765,000	 	 	 	—  	 	 	 	765,000	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted EBITDA loss
	  	$	(5,673,109	) 	 	$	(5,391,936	) 	 	$	(1,197,813	) 	 	$	(11,065,045	) 	 	$	(1,926,256	) 

 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 compensation 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
June 30,	 	 	Three months
ended
March 31,(1)	 	 	Three months
ended
June 30,	 	 	Six months
ended
June 30,	 	 	Six months
ended
June 30,	 
	 	  	2021	 	 	2021	 	 	2020	 	 	2021	 	 	2020	 
	 Revenue
	  	$	2,780,681	 	 	$	2,643,083	 	 	$	1,087,790	 	 	$	5,423,764	 	 	$	1,426,342	 
	 Procurement expense
	  	 	(2,102,822	) 	 	 	(2,052,246	) 	 	 	(690,795	) 	 	 	(4,155,068	) 	 	 	(1,147,847	) 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Gross profit
	  	$	 677,859	 	 	$	 590,837	 	 	$	 396,995	 	 	$	 1,268,696	 	 	$	 278,495	 
	 Adjustments:
	  				 				 				 				 			
	 The Butcher Shop & Restaurant procurement expense
	  	 	117,484	 	 	 	129,622	 	 	 	71,575	 	 	 	247,104	 	 	 	160,843	 
	 Share-based compensation
	  	 	284,147	 	 	 	258,549	 	 	 	—  	 	 	 	542,696	 	 	 	14,246	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted gross profit
	  	$	1,079,490	 	 	$	 979,008	 	 	$	 468,570	 	 	$	2,058,496	 	 	$	 453,584	 
	 Adjusted gross margin
	  	 	39	% 	 	 	37	% 	 	 	43	% 	 	 	38	% 	 	 	32	% 

  

	(1) 	 Certain operating expenses such as share-based compensation and wages from the March 31, 2021 period has been
reclassified to conform to the change in presentation of expenditures adopted by the Company. As a result of the reclassification, procurement expense was changed from $2,108,963 to $2,052,246, and share-based compensation changed from $303,075 to
$258,549. The gross profit, adjusted gross profit, and adjusted gross margin were updated accordingly. 

  
 16 

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

  

 Adjusted general and administrative expense 

Management defines adjusted general and administrative expense as general and administrative expense excluding
non-cash items such as share-based compensation and depreciation expense. Management believes adjusted general and administrative expense provides useful information as it represents the corporate costs to
operate the business excluding any non-cash items. 
  

																					
	 	  	Three months
ended
June 30,	 	 	Three months
ended
March 31,(1)	 	 	Three months
ended
June 30,	 	 	Six months
ended
June 30,	 	 	Six months
ended
June 30,	 
	 	  	2021	 	 	2021	 	 	2020	 	 	2021	 	 	2020	 
	 General and administrative expense
	  	$	(6,834,880	) 	 	$	(9,574,557	) 	 	$	(723,599	) 	 	$	(16,409,437	) 	 	$	(1,335,815	) 
	 Adjustments:
	  				 				 				 				 			
	 Share-based compensation
	  	 	4,546,887	 	 	 	7,340,959	 	 	 	172,083	 	 	 	11,887,846	 	 	 	412,405	 
	 Depreciation
	  	 	79,438	 	 	 	32,762	 	 	 	53,819	 	 	 	112,200	 	 	 	60,178	 
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Adjusted general and administrative expense
	  	$	(2,208,555	) 	 	$	(2,200,836	) 	 	$	(497,697	) 	 	$	(4,409,391	) 	 	$	(863,232	) 

  

	(1)	 Certain operating expenses such as share-based compensation and wages from the March 31, 2021 period had been
reclassified to conform to the change in presentation of expenditures adopted by the Company, which changed general and administrative expense from $10,522,987 to $9,574,356, share based compensation from $8,067,970 to $7,340,959 and adjusted
general and administrative expense from $2,422,255 to $2,200,835. 

 Revenue 

Revenue by geographic region 
  

																					
	 	  	Three months
ended
June 30,	 	  	Three months
ended
March 31,	 	  	Three months
ended
June 30,	 	  	Six months
ended
June 30,	 	  	Six months
ended
June 30,	 
	 	  	2021	 	  	2021	 	  	2020	 	  	2021	 	  	2020	 
	 Canada
	  	$	1,559,674	 	  	$	1,357,359	 	  	$	1,087,790	 	  	$	2,917,033	 	  	$	1,426,342	 
	 United States
	  	 	1,221,007	 	  	 	1,285,724	 	  	 	—  	 	  	 	2,506,731	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	2,780,681	 	  	$	2,643,083	 	  	$	1,087,790	 	  	$	5,423,764	 	  	$	1,426,342	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Revenue by channel 
  

																					
	 	  	Three months
ended
June 30,	 	  	Three months
ended
March 31,	 	  	Three months
ended
June 30,	 	  	Six months
ended
June 30,	 	  	Six months
ended
June 30,	 
	 	  	2021	 	  	2021	 	  	2020	 	  	2021	 	  	2020	 
	 eCommerce
	  	$	2,206,403	 	  	$	2,185,095	 	  	$	846,134	 	  	$	4,391,497	 	  	$	964,642	 
	 Wholesale and Meal Prep
	  	 	455,055	 	  	 	345,905	 	  	 	169,859	 	  	 	800,960	 	  	 	274,771	 
	 Butcher Shop & Restaurant and Other
	  	 	119,223	 	  	 	112,083	 	  	 	71,797	 	  	 	231,307	 	  	 	186,929	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	2,780,681	 	  	$	2,643,083	 	  	$	1,087,790	 	  	$	5,423,764	 	  	$	1,426,342	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

 Three Months Ended June 30, 2021 compared to March 31, 2021 

Revenue increased $137,598 (5%) to $2,780,681 in the second quarter of 2021, compared to $2,643,083 in the previous quarter ended March 31, 2021.
This increase was mainly due to higher Canadian wholesale revenue of $109,150 due to the Company’s scaling of production and distribution to meet demand. Overall, wholesale distribution points increased to 1,869 (37%) in the second quarter of
2021 compared to 1,356 in the previous quarter primarily due to new wholesale partnership agreements signed including Horizon Grocery + Wellness, 

  
 17 

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

  

 
UNFI USA and KeHE. The Company expects to continue to expand its reach to more grocery stores in both Canada and US in the third quarter of 2021. 

Three Months Ended June 30, 2021 compared to June 30, 2020 

Revenue increased $1,692,891 (156%) to $ 2,780,681 in the second quarter of 2021, compared to $1,087,790 in the same period in fiscal 2020. The growth in
revenue was primarily driven by an increase of $1,360,269 in eCommerce sales and $285,196 in wholesale revenue due to the Company’s scaling of production and distribution to meet demand in both sales channels. Of the increase in eCommerce
revenue, $1,221,007 was attributed to US sales with the introduction of the Company’s US website in the third quarter of 2020. 
 Six Months Ended
June 30, 2021 compared to June 30, 2020 
 Revenue increased $3,997,422 (280%) to $5,423,764 in the six months ended June 30, 2021,
compared to $1,426,342 in the same period in fiscal 2020. The growth in revenue was primarily driven by an increase of $3,426,855 in eCommerce sales and $526,189 in wholesale revenue due to the Company’s scaling of production and distribution
to meet demand in both sales channels. Of the increase in eCommerce revenue, $2,506,731 was attributed to US sales with the introduction of the Company’s US website in the third quarter of 2020. 

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 June 30, 2021 compared to March 31, 2021 

Procurement expense increased $50,576 (2%) to $2,102,822 in the second quarter of 2021, compared to $2,052,246 in the previous quarter ended
March 31, 2021. The increase in procurement expense was due to the Company’s scaling of production and distribution to meet demand in both sales channels. 

Three Months Ended June 30, 2021 compared to June 30, 2020 

Procurement expense increased $1,412,027 (204%) to $2,102,822 in the second quarter of 2021, compared to $690,795 in the same quarter in fiscal 2020. The
increase in procurement expense was primarily driven by increased sales and the Company ramping up production to meet demand for its products as well as $284,147 in higher share-based compensation expense incurred for production employees. 

Six Months Ended June 30, 2021 compared to June 30, 2020 

Procurement expense increased $3,007,221 (262%) to $4,155,068 in the six months ended June 30, 2021, compared to $1,147,847 in the same period in
fiscal 2020. The increase in procurement expense was primarily driven by higher sales and the Company ramping up production to meet demand for its products as well as $528,450 in higher share-based compensation expense incurred for production
employees. 
 Gross profit and adjusted gross profit 
 Gross
profit consists of revenue less procurement expense. Adjusted gross profit is a non-GAAP measure calculated as total revenue less procurement expense. See “Non-GAAP
Financial Measures” on page 15 for more information on management’s use of adjusted gross profit and a reconciliation thereof. 

  
 18 

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

  

 Three Months Ended June 30, 2021 compared to March 31, 2021 

Gross profit was $677,859 or 24% of revenue in the second quarter of 2021, compared to $590,837 or 22% of revenue in the previous quarter ended
March 31, 2021. Excluding the Butcher Shop & Restaurant procurement expense and share-based compensation, adjusted gross profit was $1,079,490 or 39% of revenue in the second quarter of 2021, compared to $979,008 or 37% of revenue in
the previous quarter of March 31, 2021. The increase in gross profit was primarily driven by increased sales volume achieved through maximizing the production footprint at the Victoria Facility. 

Three Months Ended June 30, 2021 compared to June 30, 2020 

Gross profit was $677,859 or 24% of revenue in the second quarter of 2021, compared to gross profit of $396,995 or 36% for the same period in fiscal
2020. 
 Excluding the Butcher Shop & Restaurant procurement expense and share-based compensation, adjusted gross profit was $1,079,490 or
39% of revenue in the second quarter of 2021, compared to adjusted gross profit of $468,570 or 43% in the second quarter of 2020. The decrease in adjusted gross profit was primarily driven by the timing of certain procurement expenses recorded in
the prior period. 
 Six Months Ended June 30, 2021 compared to June 30, 2020 

Gross profit was $1,268,696 or 23% of revenue in the six months ended June 30, 2021, compared to gross profit of $278,495 or 20% for the same period
in fiscal 2020. 
 Excluding the Butcher Shop & Restaurant procurement expense and share-based compensation, adjusted gross profit was
$2,058,496 or 38% of revenue in the six months ended June 30, 2021, compared to adjusted gross profit of $453,584 or 32% in the same period of 2020. The improvement in adjusted gross profit was primarily driven by increased sales volume
achieved through maximizing the production footprint at the Victoria Facility. 
 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 June 30, 2021 compared to
March 31, 2021 
 Fulfilment expense increased $62,819 (3%) to $2,045,714 in the second quarter of 2021, compared to $1,982,895 in the
previous quarter ended March 31, 2021. Fulfilment expense increased mainly due to higher packaging costs from increased production to meet the demand of for eCommerce and wholesale orders. During the second quarter of 2021, VERY GOOD shipped
24,025 eCommerce orders compared to 23,181 in the previous quarter. 
 Three Months Ended June 30, 2021 compared to June 30, 2020 

Fulfilment expense increased $1,630,580 (393%) to $2,045,714 in the second quarter of 2021, compared to $415,134 in the same quarter in fiscal 2020. The
increase in fulfilment expense was primarily driven by the ramp up of production and significantly higher eCommerce and wholesale sales 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. Fulfillment costs increased due to the processing of 24,025 eCommerce orders in the second quarter of 2021, compared to 11,194 in
the same quarter in fiscal 2020. 

  
 19 

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

  

 Six Months Ended June 30, 2021 compared to June 30, 2020 

Fulfilment expense increased $3,537,016 (720%) to $4,028,609 in the six months ended June 30, 2021, compared to $491,593 in the same period in
fiscal 2020. The increase in fulfilment expense was primarily driven by the ramp up of production and significantly higher eCommerce and wholesale sales 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. Fulfilment costs increased due to the processing of 47,206 eCommerce orders in the six months ended 2021,
compared to 13,635 in the same period in fiscal 2020. 
 General and administrative expense and adjusted 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. 

Adjusted general and administrative expense is a non-GAAP measure calculated as total general and administrative
expense less share-based compensation and depreciation. See “Non-GAAP Financial Measures” on page 15 for more information on management’s use of adjusted general and administrative expense and a
reconciliation thereof. 
 Three Months Ended June 30, 2021 compared to March 31, 2021 

General and administrative expense decreased $2,739,677 (29%) to $6,834,880 in the second quarter of 2021, compared to $9,574,557 in the previous quarter
ended March 31, 2021. The decrease in general and administrative expense was primarily due to share-based compensation which was lower by $2,794,072 compared to the previous quarter ended March 31, 2021 as a portion of stock options grants
to employees to create performance alignment with the aim of generating shareholder value had fully vested in Q1 2021. 
 Excluding share-based
compensation and depreciation expense, adjusted general and administrative expense was relatively flat at $2,208,555 in the second quarter of 2021, compared to $2,200,836 in the first quarter. 

Three Months Ended June 30, 2021 compared to June 30, 2020 

General and administrative expense increased $6,111,281 (845%) to $6,834,880 in the second quarter of 2021, compared to $723,599 in the same period in
fiscal 2020. The growth in general and administrative expense was primarily due to share-based compensation which was higher by $4,374,804 compared to the same period in fiscal 2020 because of stock option grants to employees to create alignment
with the aim of generating shareholder value, as well as increase of approximately $771,151 in wages and salaries related expenditures due to expansion of the management team to support planned growth. The Company also incurred additional accounting
and legal, and general office expenses due to the higher volume of business activities. 
 Excluding share-based compensation and depreciation
expense, adjusted general and administrative expense was $2,208,555 in the second quarter of 2021, compared to $497,697 in the same period in fiscal 2020. Adjusted general and administrative expense increased $1,710,858 (344%) in the second quarter
of 2021 compared to the same quarter in 2020 for the same reasons noted above. 

  
 20 

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

  

 Six Months Ended June 30, 2021 compared to June 30, 2020 

General and administrative expense increased $15,073,622 (1,128%) to $16,409,437 in the six months ended June 30, 2021, compared to $1,335,815 in
the same period in fiscal 2020. The growth in general and administrative expense was primarily due to share-based compensation which was higher by $11,475,441 compared to the same period in fiscal 2020 because of stock option grants to employees to
create alignment with the aim of generating shareholder value as well as increase of approximately $1,629,000 in wages and salaries related expenditures due to expansion of the management team to support planned growth. The Company also incurred
additional accounting and legal, and general office expenses due to the higher volume of business activities. 
 Excluding share-based compensation
and depreciation expense, adjusted general and administrative expense was $4,409,390 in the six months ended June 30, 2021, compared to $863,232 in the same period in fiscal 2020. Adjusted general and administrative expense increased $3,546,159
(411%) in the six months ended June 30, 2021 compared to the same period in 2020 for the same reasons noted above. 
 Marketing and investor relations expense

 Three Months Ended June 30, 2021 compared to March 31, 2021 

Marketing and investor relations expense increased $433,311 (20%) to $2,579,656 in the second quarter of 2021, compared to $2,146,345 in the previous
quarter ended March 31, 2021. The increase in marketing and investor relations expense was mainly due to the increase in digital marketing initiatives to raise brand awareness and increase eCommerce traffic and conversion, as well as increase
in share-based compensation and wages and salaries due to the expansion of the marketing team to support marketing initiatives. 
 Three Months Ended June 30,
2021 compared to June 30, 2020 
 Marketing and investor relations expense increased $1,839,425 (248%) to $2,579,656 in the second quarter of
2021, compared to $740,231 in the same quarter in fiscal 2020 for the same reasons noted above. 
 Six Months Ended June 30, 2021 compared to June 30,
2020 
 Marketing and investor relations expense increased $3,822,196 (423%) to $4,726,001 in the six months ended June 30, 2021, compared to
$903,805 in the same period in fiscal 2020 for the same reasons noted above. 
 Pre-production expense 

Pre-production expense includes wages and benefits expense, right-of-use assets and property and equipment depreciation expense and other operating expense related to the commissioning of the Rupert Facility, the Patterson Facility, the Mount Pleasant and the newly
located Victoria Flagship Stores which are not yet in operation. These pre-production expenses will be included as part of procurement expense once these sites are in operation. 

Three Months Ended June 30, 2021 compared to March 31, 2021 

Pre-production expense was $656,288 in the second quarter of 2021, compared to $885,535 in the previous quarter
ended March 31, 2021. The pre-production expense decreased $229,247 or 26% in the second quarter as compared to the first quarter as Rupert Facility has started producing limited salable product as of May
2021; therefore, decreasing certain pre-production costs as they are included in procurement expenses. 
 Three Months
Ended June 30, 2021 compared to June 30, 2020 
 Pre-production expense was $656,288 in the
second quarter of 2021, compared to $nil in the same quarter in fiscal 2020 due to the Company not taking possession of the Rupert Facility until January 2021. 

  
 21 

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

  

 Six Months Ended June 30, 2021 compared to June 30, 2020 

Pre-production expense was $1,541,823 in the six months ended June 30, 2021, compared to $nil in the same
period in fiscal 2020 for the same reason noted above. 
 Selected Financial Information 

 

									
	 As at
	  	June 30,
2021	 	  	December 31,
2020	 
	 Total assets
	  	$	49,143,043	 	  	$	35,182,597	 
	 Total liabilities
	  	 	29,982,653	 	  	 	7,540,254	 
	 Share capital
	  	 	44,848,614	 	  	 	39,335,150	 

 Total assets 
 Total assets
increased to $49,143,043 as at June 30, 2021 from $35,182,597, as at December 31, 2020; primarily due to the increase in right-of-use assets of $12,374,157 of
which $9,882,459 pertains to the Rupert Facility lease. Property and equipment increased by $5,047,138 mainly due to capital expenditures incurred for the commissioning of Line 1 of the Rupert Facility. In addition, prepaids and deposits increased
by $4,042,381 primarily for security deposits on equipment purchased for the Rupert Facility. During the six months ended June 30, 2021, the Company also recorded $3,479,535 in estimated goodwill related the acquisition of the Cultured Nut and
Lloyd-James, subject to the finalization of the purchase price allocation, as well as $5,073,283 deferred financing cost related to Credit Facility from Waygar Capital. These increases were partially offset by a decrease in cash and cash equivalents
of $19,158,016 primarily for cash used in operating activities of $14,052,481 and investing activities of $8,281,414 related to the commissioning of the Rupert Facility and acquisitions, which were offset by cash provided by financing activities of
$3,172,787 mainly from proceeds of loan payable and proceeds from exercise of warrants. As of June 30, 2021, the Company had cash and cash equivalents of $5,926,067. 

Total liabilities 
 Total liabilities increased to $29,982,653
as at June 30, 2021 from $7,540,254, as at December 31, 2020; primarily due to an increase of $12,542,197 in lease liabilities mainly pertaining to
right-of-use assets including the Rupert Facility. Accounts payable and accrued liabilities increased $4,962,322 from the ramp-up
of operations and financing cost related to the closing of the loan payable. The Company also recorded $1,048,000 in contingent consideration liabilities related the acquisition of The Cultured Nut and Lloyd-James and loan payable and other
liabilities of $3,976,773. 
 Share Capital 
 Share capital
increased to $44,848,614 at June 30, 2021, compared to $39,335,150 as at December 31, 2020; primarily due to $3,920,438 for the issuance of common shares and units for warrants exercised and $1,156,437 for common shares issued for the
acquisition of The Cultured Nut and Lloyd-James. 

  
 22 

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

  

 QUARTERLY RESULTS 

The following table presents certain unaudited financial information for each of the eight quarters up to and including the quarter ended June 30,
2021. The information has been derived from our unaudited quarterly condensed interim consolidated financial statements. 
  

																	
	 	  	Three Months Ended	 
	 	  	June 30,
2021	 	  	March 31,
2021	 	  	December 31,
2020	 	  	September 30,
2020 (1)	 
	 Revenue
	  	$	 2,780,681	 	  	$	 2,643,083	 	  	$	 1,836,682	 	  	$	 1,373,814	 
	 Net loss
	  	$	(12,500,733	) 	  	$	(15,028,576	) 	  	$	(5,813,132	) 	  	$	(4,497,027	) 
	 Comprehensive loss
	  	$	(12,496,272	) 	  	$	(15,024,102	) 	  	$	(5,806,392	) 	  	$	(4,497,107	) 
	 Loss per share (basic and diluted)
	  	$	 (0.13	) 	  	$	 (0.15	) 	  	$	 (0.06	) 	  	$	 (0.06	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Number of eCommerce orders
	  	 	24,025	 	  	 	23,181	 	  	 	13,580	 	  	 	13,107	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
		
	 	  	Three Months Ended	 
	 	  	June 30,
2020	 	  	March 31,
2020	 	  	December 31,
2019	 	  	September 30,
2019	 
	 Revenue
	  	$	 1,087,790	 	  	$	 338,552	 	  	$	 328,866	 	  	$	 229,921	 
	 Net loss and comprehensive loss
	  	$	(2,418,655	) 	  	$	(1,129,986	) 	  	$	 (829,059	) 	  	$	(1,030,739	) 
	 Loss per share (basic and diluted)
	  	$	 (0.05	) 	  	$	 (0.02	) 	  	$	 (0.02	) 	  	$	 (0.03	) 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 
	 Number of eCommerce orders
	  	 	11,194	 	  	 	2,441	 	  	 	1,511	 	  	 	416	 
		  	  
	  
	 	  	  
	  
	 	  	  
	  
	 	  	  
	  
	 

  

	(1)	 The September 30, 2020 quarterly revenue has 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
quarter. As a result of the adjustments recorded, revenue for the three month period ended September 30, 2020 has decreased from $1,393,234 to $1,373,814. 

Revenues have increased over the last eight quarters. The sales growth has been achieved in both the eCommerce and wholesale channels 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 partnered with new 3PL providers that allowed for increased production footprint at the Victoria Facility, while the Rupert Facility is testing production and is producing saleable product
effective May 2021. 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 Rupert Facility will continue to incur ramp-up and commissioning costs over the next few months as it continues to scale production
and commission Line 2. 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. Further fluctuations in net loss have been impacted by the timing and amount of share-base compensation expense related to the fair value of stock options and warrants
granted. The Company expects to incur further losses in the development of its business and has significant capital projects planned. The continued operations are dependent on management’s ability to manage cost, raise additional equity or
debt. During the second quarter of 2021, the Company has secured a Credit Facility to support its operations and capital purchases for expansion. 
 CAPITAL
MANAGEMENT 
 The Company’s primary objectives when managing capital is to maintain a capital structure that allows financing options to the
Company in order to benefit from potential opportunities as they arise. The Company manages its capital structure and adjusts it based on the funds available to the Company in order to maintain existing operations and fund expansion opportunities.
The Board of Directors does not establish quantitative return on 

  
 23 

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

  

 
capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. 

The Company is continually evaluating expansion opportunities both domestically and within certain international markets. Depending on the timing and
scope of expansion opportunities identified by the Company, there will be a requirement for the investment of additional capital for the Company to continue to successfully execute on its growth strategy. Based on the ongoing analysis of potential
growth opportunities, the Company is not able to currently quantify any specific non-committed future capital requirements. 

The Company has historically relied on debt and more recently the equity markets to fund its activities. Management reviews its capital management
approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable to ensure optimal capital structure to reduce cost of capital. 

The following table summarizes our cash flows as at June 30, 2021 and 2020:

 

									
	 	  	Six months ended June 30	 
	 	  	2021	 	  	2020	 
	 Operating activities
	  	$	(14,052,481	) 	  	$	(1,224,546	) 
	 Investing activities
	  	 	(8,281,414	) 	  	 	(112,507	) 
	 Financing activities
	  	 	3,172,787	 	  	 	4,440,269	 
	 Effect of foreign exchange on cash and cash equivalents
	  	 	3,092	 	  	 	—  	 
		  	  
	  
	 	  	  
	  
	 
	 Net changes in cash and cash equivalents
	  	$	(19,158,016	) 	  	$	3,103,216	 
		  	  
	  
	 	  	  
	  
	 

 Operating activities 
 Net
cash used in operating activities for the six months ended June 30, 2021 was $14,052,481 as a result of the net loss for the period of $27,529,309; partially offset by a change in non-cash expenses
related to share-based compensation of $14,609,998, finance expense of $764,182, depreciation of $841,652, and shares and units issued for services of $227,471. During the comparative period ending June 30, 2020, net cash used in operating
activities was $1,224,546 as a result of the net loss for period of $3,548,641; partially offset by a change in non-cash working capital of $765,000 related to loss on settlement of debt, non-cash expenses related to share-based compensation of $450,011, shares and units issued for services of $105,324, finance expense of $147,333 and depreciation of $154,717. 

Investing activities 
 Net cash used in investing activities
for the six months ended June 30, 2021 was $8,281,414 primarily attributed to capital expenditures and leasehold improvements incurred for the commissioning of the Rupert Facility. In addition, the Company paid $1,250,000 for the acquisition of
the Cultured Nut and Lloyd-James. During the comparative period ending June 30, 2020, net cash used in investing activities was $112,507 related to the restaurant and production equipment used in the Victoria Facility. 

Financing activities 
 Net cash received from financing
activities for the six months ended June 30, 2021 was $3,172,787 due to $2,262,957 received from proceeds from the exercise of warrants and stock options, $28,999 proceeds from subscription received, and proceeds from loans payable $1,891,092;
this was partially offset by payment of lease liabilities of $532,097, repayment of loans payable $240,000, and payment of deferred financing cost of $238,164. During the comparative period ended June 30, 2020, net cash received from financing
activities was $4,440,269 primarily due to proceeds of $3,635,634 received from issuance of common share units for cash, proceeds from exercise of warrants of $773,101, and proceeds from loans payable of $499,129, offset by

  
 24 

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

  

 
repayment of loan payable $236,128 and payment of non-current lease deposits $202,735 and repayment of loan payable to related parties of $411,728. 

During the six months ended June 30, 2021, the Company received total proceeds of $1,891,092 less deferred financing cost of $238,164 for net
proceeds of $1,652,928 pursuant to the Credit Facility from Waygar Capital. As at June 30, 2021, total loans payable and other liabilities of $3,976,773 is outstanding. 

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 June 30, 2021	 
	 Build out of Mount Pleasant (less tenant improvement allowance)
	  	$	1,147,000	 	  	$	 508,306	 
	 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	 	  	$	3,263,671	 
		  	  
	  
	 	  	  
	  
	 

 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 June 30, 2021	 
	 Expansion to the United States
	  	$	3,500,000	 	  	$	 792,723	 
	 Direct research and development expenses
	  	 	750,000	 	  	 	516,966	 
	 Accretive acquisitions
	  	 	1,500,000	 	  	 	1,250,000	 
	 General corporate & other working capital
	  	 	1,739,780	 	  	 	1,739,780	 
	 Offering expenses and underwriter fee
	  	 	1,031,720	 	  	 	798,553	 
		  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	8,521,500	 	  	$	5,098,021	 
		  	  
	  
	 	  	  
	  
	 

 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 June 30, 2021	 
	 Commencement of operations at Rupert Facility
	  	$	10,000,000	 	  	$	 9,844,072	 
	 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	 	  	$	13,060,132	 
		  	  
	  
	 	  	  
	  
	 

 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.

  
 25 

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

  

													
	 	  	As at August 18,	 	  	As at June 30,	 	  	As at December 31,	 
	 	  	2021	 	  	2021	 	  	2020	 
	 Common shares
	  	 	103,443,964	 	  	 	97,623,648	 	  	 	96,640,432	 
	 Warrants
	  	 	5,706,558	 	  	 	2,611,951	 	  	 	2,889,367	 
	 Stock options
	  	 	8,662,931	 	  	 	8,073,472	 	  	 	3,852,639	 

 Common Shares 
 Common shares
increased by 1.0 million during the six months ended June 30, 2021 primarily due to the following transactions: 
  

	 	•	 	 0.6 million shares and units issued for warrants exercised 

 

	 	•	 	 0.2 million shares issued for acquisitions 

 

	 	•	 	 0.1 million shares issued for stock options exercised 

Warrants 
 The number of outstanding warrants decreased during
the six months ended June 30, 2021 by 0.3 million due to the exercise of 0.6 million broker and agent warrants, including unit warrants exercisable for both shares and warrants, offset by the concurrent issuance of 0.1 million
warrants resulting from the exercise of such unit warrants and issuance of 0.2 million warrants to Waygar Capital related to the credit facility obtained during the quarter. 

Stock Options 
 Stock options increased by 4.2 million
during the six months ended June 30, 2021 due to the following transactions: 
  

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

 

	 	•	 	 0.1 million stock options exercised 

 

	 	•	 	 0.3 million stock options cancelled 

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, concentration of credit risk, liquidity risk, foreign currency risk, commodity price risk and equity 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 June 30, 2021, the Company had cash and cash equivalents of $5,926,067 (December 31, 2020 – 

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

  

 
$25,084,083) and a 1% change in interest rates would increase or decrease interest income by approximately $60,000 (December 31, 2020 – $250,000). 

Credit Risk
 Credit risk is the risk of an unexpected loss if
a customer or third party to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents,
security deposits and receivables. The carrying amount of cash and cash equivalents, security deposits, and trade and other receivables represent the maximum exposure to credit risk, and as at June 30, 2021, this amounted to $11,989,265
(December 31, 2020 – $26,826,938). 
 The Company’s cash and cash equivalents are held through large Canadian financial institutions and no
losses have been incurred in relation to these items. The Company’s receivables are comprised of trade accounts receivable and GST receivable. At June 30, 2021, the Company has $53,974 (December 31, 2020 – $43,153) in trade accounts
receivable outstanding over 60 days, of which the Company has recognized an allowance for doubtful accounts of $28,757 (December 31, 2020 – $39,917). 

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

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

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

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 

  
 27 

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

  

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

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

 EVENTS AFTER THE REPORTING PERIOD 

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

The Company paid a commission of $1,449,040 and 391,633 compensation warrants of the Company (the “Compensation Warrants”) being equal to 7%
of the aggregate number of Units sold pursuant to the offering. Each Compensation Warrant entitles the holder to purchase one additional Unit of the Company (each a “Compensation Unit”) at a price of $3.70 per Compensation Unit until
January 2, 2023. In addition, the Company also paid a corporate finance fee comprised of 30,000 Units to the agent. 
 Subsequent to
June 30, 2021, the Company issued a total of 109,400 common shares pursuant to the exercise of warrants with exercise prices ranging between of $1.51 and $2.00 per share for gross proceeds of $171,400. 

Subsequent to June 30, 2021, the Company issued a total of 86,166 common shares pursuant to the exercise of stock options with exercise prices
ranging between $0.25 and $1.74 per share for gross proceeds of $46,374, of which $28,999 was received as at June 30, 2021. 
 Subsequent to
June 30, 2021, the Company granted a total of 685,625 stock options. The stock options granted have an exercise price of $3.70 per share and expiry dates ranging between July 15, 2024, and July 15, 2026. 

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

  

 CRITICAL ACCOUNTING ESTIMATES 

The preparation of these condensed interim 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. 

  

	 	•	 	 Assessing whether an acquisition is a business combination or an asset acquisition and assessing whether the amount paid
on achievement of milestones represents contingent consideration or compensation for post-acquisition services. Accounting for acquisitions requires estimates with respect to the fair value of the assets acquired and liabilities assumed.

  

	 	•	 	 Impairment of non-financial assets such as goodwill, right of use assets and
property and equipment. This assessment includes a consideration of external and internal indicators that the asset may be impaired. 

  

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

 RISKS AND
UNCERTAINITIES 
 VERY GOOD is subject to a number of risks and uncertainties related to its businesses that may have adverse effects on its
results of operations and financial position. Details on some of these can be found in VERY GOOD’s most recent Annual Information Form (“AIF”) filed with Canadian securities regulatory authorities at www.sedar.com. Readers
should carefully review and evaluate these risk factors together with all of the other information contained in this discussion and analysis. Furthermore, it should be noted that the risk factors described in the AIF are not the only risk factors
facing VERY GOOD and it may be subject to risks and uncertainties not described therein or that it is not presently aware of or that it may currently deem insignificant. 

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

  

 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
condensed interim consolidated 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. 

  
 30 

 

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

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