EAT & BEYOND GLOBAL HOLDINGS INC. EAT & BEYOND GLOBAL HOLDINGS INC.
MANAGEMENT DISCUSSION AND ANALYSIS
FOR THE THREE MONTHS ENDED MARCH 31, 2022
Eat & Beyond Global Holdings Inc.
Management Discussion & Analysis
For the three months ended March 31, 2022
1.1 Date
This Management's Discussion & Analysis ("MD&A") of the financial condition and results of operations of Eat & Beyond Global Holdings Inc. (formerly Eat Beyond Global Holdings Inc.) (the "Company") should be read in conjunction with the Company's condensed interim financial statements for the three months ended March 31, 2022 and the accompanying notes and the audited financial statements for the year ended December 31, 2021, and the accompanying notes therein. This MD&A is dated May 30, 2022, which is the date that the Board of Directors of the Company (the "Board") approved the disclosure contained in this MD&A.
The results for the periods presented are not necessarily indicative of the results that may be expected for any future period. Except as otherwise indicated, all financial data in this MD&A have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").
This MD&A contains forward-looking information which reflects management's expectations regarding the Company's growth, results of operation, performance and business prospects and opportunities. The use of words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", believe", outlook", "forecast" and similar expressions are intended to identify forward-looking statements.
Forward-looking statements in this MD&A include, but not limited to, the Company's expectation of future activities and results, of its working capital needs and its ability to identify, evaluate and pursue suitable business opportunity. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results of events to differ materially from those anticipated in these forward-looking statements. Readers should not put undue reliance on forward-looking information. The Company has no policy for updating forward-looking information beyond the procedures required under applicable securities laws.
All amounts in this MD&A are presented in Canadian dollars ("CAD").
Historical results of operations and trends that may be inferred from the following discussion and analysis may not necessarily indicate future results from operations.
1.2 Overall Performance
The Company was incorporated on September 9, 2019 under the laws of the Province of British Columbia, Canada by a Certificate of Incorporation issued pursuant to the provisions of the Business Corporations Act (British Columbia) and changed its name from 1222554 B.C. Ltd. to Eat Beyond Global Holdings Inc. on September 17, 2019. The Company's head office and principal address is Suite 1570 - 505 Burrard Street, Vancouver BC, V6E 3P3. The registered and records office is 1500-1055 West Georgia Street, Vancouver, BC, V6E 4N7. The Company's common shares commenced trading on the Canadian Securities Exchange ("CSE") on November 17, 2020 under the symbol "EATS". On March 29, 2022, the Company changed its name to Eat & Beyond Global Holdings Inc.
The Company is an investment company primarily focusing on investments in the plant-based protein and meat alternative food industry. The Company's investments may include the acquisition of equity, debt or other securities of publicly traded or private companies or other entities, financing in exchange for pre-determined royalties or distributions and the acquisition of all or part of one or more businesses, portfolios or other assets, in each case that the Company believes will enhance value for the shareholders of the Company in the long term.
In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business or results of operations at this time.
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Eat & Beyond Global Holdings Inc.
Management Discussion & Analysis
For the three months ended March 31, 2022
The Company's business financial condition and results of operations may be further negatively affected by economic and other consequences from Russia's military action against Ukraine and the sanctions imposed in response to that action in late February 2022. While the Company expects any direct impacts, of the pandemic and the war in the Ukraine, to the business to be limited, the indirect impacts on the economy and on other industries in general could negatively affect the business and its investments.
The above material uncertainties cast significant doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent upon successful results from its investments, its ability to attain profitable operations to generate funds and/or its ability to raise equity capital or borrowings sufficient to meet its current and future obligations. Although the Company has been successful in the past in raising funds to continue operations, there is no assurance it will be able to do so in the future.
Investments
The Company had the following investments as at March 31, 2022 and December 31, 2021
Number of | |||||
shares/Units | Investment | Fair Value at | |||
Note | Held | Cost | March 31, 2022 | ||
# | $ | $ | |||
Public Companies | |||||
The Very Good Food Company Inc. | (i) | 25,000 | 6,250 | 16,000 | |
Good Natured Products Inc. | (i) | - | - | - | |
Plantfuel Life Inc. (formerly Sire | |||||
Biosciences Inc.) | (i) | 55,555 | 50,000 | 37,778 | |
Zoglo's Incredible Food Corp. | (i) | 500,000 | 50,000 | 62,500 | |
Nabati Foods Inc. | (i, ii) | 748,003 | 261,801 | 142,120 | |
1181718 BC Ltd. (aka Fresh Factory) | (i) | 50,000 | 63,500 | 44,000 | |
431,551 | 302,398 | ||||
Private Companies | |||||
TurtleTree Labs Pte. Ltd. | (i) | 21,923 | 200,205 | 736,612 | |
Beyond Moo | (iii) | 3,792,475 | 768,447 | 1,011,326 | |
Above Food | (i) | 25,000 | 50,000 | 50,000 | |
Plant Power Restaurant Group LLC | (i, ii) | 112,107 | 317,257 | 316,950 | |
Daydream Drinks (11270702 Canada Inc.) | (i) | 50,000 | 75,000 | 75,000 | |
Circular Solutions Inc. | (i) | 200,000 | 30,000 | 30,000 | |
Eat Just Inc. | (i) | 7,998 | 113,869 | 105,712 | |
1,554,778 | 2,325,600 | ||||
Investment in warrants | NA | - | 20,911 | ||
Total | 1,986,329 | 2,648,911 |
During the three months ended March 31, 2022 the Company sold all of its investments in Good Natured Products Inc. for total proceeds of $227,887 and realized a gain of $152,161.
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Eat & Beyond Global Holdings Inc.
Management Discussion & Analysis
For the three months ended March 31, 2022
Number of | Fair Value at | |||
shares/Units | Investment | December 31, | ||
Note | Held | Cost | 2021 | |
# | $ | $ | ||
Public Companies | ||||
The Very Good Food Company Inc. | (i) | 25,000 | 6,250 | 23,250 |
Good Natured Products Inc. | (i) | 5,186 | 726 | 3,786 |
Plantfuel Life Inc. (formerly Sire | ||||
Biosciences Inc.) | (i) | 55,555 | 50,000 | 66,111 |
Zoglo's Incredible Food Corp. | (i) | 500,000 | 50,000 | 102,500 |
Nabati Foods Inc. | (i, ii) | 748,003 | 261,801 | 336,601 |
1181718 BC Ltd. (aka Fresh Factory) | (i) | 50,000 | 63,500 | 56,500 |
432,277 | 588,748 | |||
Private Companies | ||||
TurtleTree Labs Pte. Ltd. | (i) | 21,923 | 200,205 | 736,613 |
Beyond Moo | (iii) | 3,792,475 | 768,447 | 1,011,326 |
Above Food | (i) | 25,000 | 50,000 | 50,000 |
Plant Power Restaurant Group LLC | (i, ii) | 112,107 | 317,257 | 316,950 |
Daydream Drinks (11270702 Canada | (i) | 50,000 | 75,000 | 75,000 |
Inc.) | ||||
Circular Solutions Inc. | (i) | 200,000 | 30,000 | 30,000 |
Eat Just Inc. | (i) | 7,998 | 113,869 | 105,713 |
1,554,778 | 2,325,602 | |||
Investment in warrants | NA | - | 168,717 | |
Total | 1,987,055 | 3,083,067 |
Note
- The Company owns less than 10% interest in the investee as at March 31, 2022 and December 31, 2021.
- A director and/or officer of the Company is a director and/or officer of the investee as at March 31, 2022 and December 31, 2021.
- The Company owns 32% of the outstanding common shares and the CEO is a director of the investee as at December 31, 2021. There are no contractual arrangements. Refer to Note 2 for details relating to the exemption to consolidating particular subsidiaries and the exemption from accounting for associates using the equity method for investment entities.
During the year ended December 31, 2021, the Company sold some of its investments in public companies for total proceeds of $977,923 and realized a gain of $626,849.
SingCell Tx Pte Ltd.
On September 18, 2020, the Company loaned $144,989 (US$113,878) through a convertible note in SingCell TX Pte Ltd. ("SingCell"). The Note earns interest at 5% per annum with a maturity date of September 16, 2023. Interest is payable on the maturity date. The Note will automatically convert into fully paid senior shares at the conversion price based on certain events. As at December 31, 2021, the Company recorded an impairment of the convertible note receivable of $152,998 as SingCell was unable to secure its license.
Singapore based Singcell is a leader in the stem-cell based development. Operating as a contract development and manufacturing organization, they are focused on helping cultured meat companies manufacture their products and scale their operations in the Asian market. Mr. Morris was appointed to the board of directors of Singcell until he resigned in March 2021.
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Eat & Beyond Global Holdings Inc.
Management Discussion & Analysis
For the three months ended March 31, 2022
On October 15, 2021, Michael Aucoin was appointed to Singcells Advisory Board. Mr. Aucoin has over 25 years of experience in food sales management and the consumer-packaged goods industry.
TurtleTree Labs Pte. Ltd.
TurtleTree is a leader in the development of cell-based dairy and expects to soon launch its first products in the U.S. using its cell-based dairy ingredients through multiple B2B partnerships, and fully commercialize its cultured milk within the next four to five years.
TurtleTree recently completed a $30 million series "A" financing and are using the proceeds to build a R&D and large- scale manufacturing facility in West Sacramento, California as well as fuel its continued development of IP technologies, research on new applications, and team expansion to include world-class scientists, product management and business development associates.
The Company is represented by Michael Aucoin who sits on TurtleTree Advisory Board.
Beyond Moo
Launched in 2021, Beyond Moo is a branded oat-based yogurt, kefir, and butter manufacturer headquartered in Mississauga, Ontario. The Company completed two transactions investing in alternative oat-based dairy alternative start-up, Beyond Moo Ltd. For an aggregate investment of $768,446.50, the Company acquired a 32.1% share of the outstanding common shares of Beyond Moo. The proceeds of the investment will be used to expand distribution on the brand's current line-up of products as well as launch a single-serve drinkable kids' oat-based yogurt.
Eat Beyond is currently represented at Beyond Moo by Michael Aucoin as a member of the Board of Directors and Michael Owen and Diane Jang who both sit on the advisory committee. Mr. Owen has over 30 years of experience and is a senior marketing and sales executive. Ms. Jang is an experienced business executive, specializing in strategic planning for sustainable success, growth and profitability for companies.
Plant Power Restaurant Group LLC
California-based Plant Power Fast Food is known as an innovator in the quick service restaurant (QSR) field with its 100- per-cent-plant-based offerings and biodegradable packaging. Plant Power features a menu that ranges from burgers, fries, shakes and "chicken" tenders to wraps, salads, juices, raw items and a kids menu. Plant Power has often been referred to as a vegan version of McDonalds and other similar fast-food concepts.
The Company's investment was a portion of a $7.5 million Series "A" capital round to fund increased store location expansion. In 2021, Plant Power expanded from 7 to 10 outlets, including new locations in Las Vegas, Sacramento, and the University of California, San Diego as well as announcing the upcoming opening of an 11th outlet, located in Hollywood district of Los Angeles, California. (The Hollywood location officially opened in Q1 2022). The Company has announced its intention to continue its expansion with possible upcoming locations in the Pacific Northwest, Arizona, Texas, Utah, Colorado and New Mexico with the ultimate goal to be a national chain with locations coast to coast.
The Company is currently represented on the Plant Power board of directors by its Chairman, Don Robinson.
Daydream Drinks (11270702 Canada Inc.)
Founded in 2019, Daydream is Canada's first adaptogen-infused sparkling water with no sugar or caffeine. Our unique blend of ingredients work with the body's immune system making it a go-to beverage to increase focus, reduce stress and fatigue. Daydream is calm in a can.
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Eat Beyond Global Holdings Inc. published this content on 01 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 June 2022 18:01:10 UTC.
