Form 20-F Very Good Food Co Inc. Due: December 31

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The very good food company | Management discussion and analysis

Quarters ended December 31, 2021 compared to December 31, 2020

General and administrative expenses increased by $4,772,502 (124%) to $8,630,775 in Q4 2021, compared to $3,858,273 in Q4 2020. Excluding stock-based compensation and amortization expense , adjusted general and administrative expenses increased by $3,586,646 (166%) in Q4 2021, compared to $2,154,364 in Q4 2020. The increase in adjusted general and administrative expenses is mainly due to the increase in expenses insurance of $578,215 due to increased directors and officers insurance, salaries and benefits of $1,963,715 due to annual premiums, filing and registration fees of $290,841 $ linked to the Company’s Nasdaq. listing, legal and professional fees of $857,673 due to additional regulatory and filing matters, including services related to the Company’s Nasdaq listing, and accounting and auditing fees of $294,480 $ due to the accrual of 2021 audit fees.

Year ended December 31, 2021 compared to December 31, 2020

General and administrative expenses increased by $25,044,694 (353%) to $32,129,489 in fiscal 2021 compared to $7,084,795 in fiscal 2020. Excluding compensation based on and amortization expense, adjusted general and administrative expenses increased by $9,630,208 (215%) in fiscal 2021 compared to $4,484,044 in fiscal 2020. adjusted general and administrative expenses is attributable to an increase in salaries and benefits of $4,470,302 and recruitment costs of $359,438, due to the expansion of the management and sales team to support the planned growth , legal and professional fees of $1,572,677 due to additional advisory fees, executive search services and other regulatory and filing matters, including services related to the Company’s Nasdaq listing, insurance of 854 $139 due to increased directors and officers insurance, filing and listing fees of $719,323 related to the Company’s Nasdaq listing, software license and subscription fees of $514,446 as the Company implements a new integrated management software package (“ERP”) system to support manufacturing and growth and purchases additional software subscriptions to support staff growth, general office expenses such as small equipment, repairs and maintenance, property tax, insurance and consumables of $1,086,621 due to higher volume of business activities and travel expenses of $250,060 as COVID-19[feminine] restrictions began to ease in the second half of 2021.

Marketing and investor relations expenses

Quarters ended December 31, 2021 compared to September 30, 2021

Marketing and investor relations expenses increased by $2,193,006 (101%) to $4,371,771 in Q4 2021 compared to $2,178,765 in Q3 2021. The increase in marketing and Investor Relations is mainly due to an increase of $905,701 in marketing expenses related to a change in service providers. in Canada that contribute to digital marketing initiatives to increase brand awareness, increase traffic and e-commerce conversion resulting in lower customer acquisition costs, $906,063 related to other marketing such as content creation, online advertising and brand development; investor relations fees increased by $306,369 to support the October 2021 offering.

Quarters ended December 31, 2021 compared to December 31, 2020

Marketing and investor relations expenses increased by $3,397,918 (349%) to $4,371,771 in Q4 2021 compared to $973,853 in Q4 2020. The increase in marketing and investor relations expenses with investors is primarily due to the $3,312,217 increase in digital marketing initiatives to drive brand awareness and increase e-commerce traffic and conversion as well as a $278,779 increase in salaries and benefits benefits and $115,808 in stock-based compensation due to the expansion of the marketing team to support sales growth.

Year ended December 31, 2021 compared to December 31, 2020

Marketing and investor relations expenses increased by $8,033,327 (248%) to $11,276,537 in fiscal 2021 compared to $3,243,210 in fiscal 2020, primarily due to an increase in digital marketing initiatives of $6,416,848, salaries and benefits of $764,068 and stock-based compensation expense of $856,481 for the same reasons discussed above.

Pre-production costs

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