Happy Valley Nutrition : Quarterly Activities Report and Appendix 4C - Dec-21

For personal use only

Happy Valley Nutrition Quarterly Activities Report and Appendix 4C

28 January 2022: Happy Valley Nutrition Limited (ASX: HVM; 'Happy Valley' or 'the Company') is pleased to provide its quarterly activities report and Appendix 4C for the quarter ending 31 December 2021.The Company plans to supply a range of high-quality, specialty nutritional powders to customers in the food & beverage sector.

Quarterly Highlights

Bulk Earthworks:

• The earthworks, which commenced earlier in the year, is now physically complete. The Company is targeting completion of paperwork associated with the earthworks (Practical Completion) in February 2022. This is a major milestone and means the site is ready to commence construction as soon as funding has been secured.

Financial:

• Expenditure for the December quarter 2021 from operating and investing activities was NZD 1.1 million, with cash on hand at 31 December 2021 of NZD 4 million.
• The Company is continuing positive discussions with strategic partners to secure funding for the construction of its world class manufacturing facility in Otorohanga, New Zealand.

Operational:

Gareth Jones resigned as CFO and left the Company at the end of November 2021. The Company has hired Richard Chew on an acting basis until a permanent CFO is appointed. Richard is a member of the Chartered Accountants of Australia and New Zealand (CAANZ) and holds a Bachelor of Commerce from Auckland University. He has more than two decades of senior management experience in sectors ranging from media, entertainment, advertising, marketing, manufacturing, retail, property and fintech.

As announced on the 20 December 2021 Greg Wood gave notice of his resignation as CEO and director for the Company. Greg continues to assist the Company in its focus to raise capital, whilst transitioning his responsibilities to the management team during his notice period.

Payments to related parties:

• The Company made payments to related parties of NZD 0.25m during the quarter. These include settlement of directors' fees and non-director services, payment to VCFO Group for tax services and rent, and payment to AOP Services for advisory services for capital raising.

Approved for release by the Board.

Greg Wood

For all shareholder enquiries please contact:

[e-mail]

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Appendix 4C

only			Quarterly cash flow report for entities
			subject to listing rule 4.7B
	Name of entity
	Happy Valley Nutrition Limited
use
ABN					Quarter ended ("current quarter")
ACN 636 597 101			31 December 2021
personal	Consolidated statement of cash flows		Current quarter		Year to date
					$NZ'000		(6 months)
							$NZ'000
	1.	Cash flows from operating activities
	1.1	Receipts from customers
	1.2	Payments for
		(a)	research and development
		(b) product manufacturing and operating		(626)		(1,160)
			costs
		(c)	advertising and marketing
		(d)	leased assets
		(e)	staff costs		(334)		(642)
		(f) administration and corporate costs
For	1.3	Dividends received (see note 3)
1.4	Interest received		0		1
1.5	Interest and other costs of finance paid
	1.6	Income taxes paid
	1.7	Government grants and tax incentives
	1.8	Other (provide details if material)		57		115
	1.9	Net cash from / (used in) operating		(904)		(1,686)
		activities

2. Cash flows from investing activities

2.1 Payments to acquire or for:

1. entities

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use only

1. 1. businesses
   2. property, plant, and equipment
   3. investments
   4. intellectual property
   5. other non-current assets
2. Proceeds from disposal of:
3. 1. entities
   2. businesses
   3. property, plant, and equipment
   4. investments
   5. intellectual property
   6. other non-current assets
4. Cash flows from loans to other entities
5. Dividends received (see note 3)
6. Other (provide details if material)
7. Net cash from / (used in) investing activities

(153)(1,475)

(153)(1,475)

For personal

3.	Cash flows from financing
	activities
3.1	Proceeds from issues of equity securities
	(excluding convertible debt securities)
3.2	Proceeds from issue of convertible debt
	securities
3.3	Proceeds from exercise of options
3.4	Transaction costs related to issues of
	equity securities or convertible debt
	securities
3.5	Proceeds from borrowings	1,100	1,100
3.6	Repayment of borrowings
3.7	Transaction costs related to loans and
	borrowings
3.8	Dividends paid
3.9	Other (provide details if material)
3.10	Net cash from / (used in) financing	1,100	1,100
	activities

4. Net increase / (decrease) in cash and cash equivalents for the period

4.1	Cash and cash equivalents at beginning	3,978	6,138
	of period

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only

4.2	Net cash from / (used in) operating	(904)	(1,686)
	activities (item 1.9 above)
4.3	Net cash from / (used in) investing	(153)	(1,475)
	activities (item 2.6 above)
4.4	Net cash from / (used in) financing	1,100	1,100
	activities (item 3.10 above)
4.5	Effect of movement in exchange rates on	26	(29)
	cash held
4.6	Cash and cash equivalents at end of	4,047	4,047
	period

personal use

5. Reconciliation of cash and cash equivalents

at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts

1. Bank balances
2. Call deposits
3. Bank overdrafts
4. Other (provide details)
5. Cash and cash equivalents at end of quarter (should equal item 4.6 above)

Current quarter	Previous quarter
$NZ'000	$NZ'000

4,0473,978

-

-

4,0473,978

6. Payments to related parties of the entity and their associates

1. Aggregate amount of payments to related parties and their associates included in item 1
2. Aggregate amount of payments to related parties and their associates included in item 2

Current quarter

$NZ'000

255

For

Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.

Payments to related parties include settlement of directors' fees (NZ$70,825), non-director services payment to VCFO Group for tax services and rent (NZ$98,171), and payment to AOP Services (NZ$85,834) for advisory and capital raising services.

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7.	Financing facilities	Total facility amount	Amount drawn at
	note: the term "facility' includes all forms of financing	at quarter end	quarter end
	arrangements available to the entity.	$NZ'000	$NZ'000
	Add notes as necessary for an understanding of the
	sources of finance available to the entity.
7.1	Loan facilities	10,300	9,063

7.2 Credit standby arrangements

7.3	Others (Convertible Notes $NZ 7.6m and	9,213	9,213
	Vendor Finance $NZ 1.5m)

7.4 Total financing facilities

7.5

Unused financing facilities available at quarter end

179

7.6 Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.

7.6 7.1

- $NZ 10,300,000 senior secured loan facility. 9.75% serviceable interest. Maturity date 15th December 2022. With serviceable interest being capitalised once earthworks achieve Practical Completion (targeted for the end of January 2022).

7.3

• $NZ 7,614,698 ($AU 7,390,064) Convertible Notes, or 35,000,000 Notes at $AU 0.21 per Note. Second ranking security over non-property assets of HVM and it's subsidiaries. Capitalised interest rate of 11%, capitalised each six months in arrears. Conversion or redemption by election of each Note holder. At the election of Note holder, will convert into ordinary shares at the lower of $AU 0.20 or a 20% discount to the pricing for the Main Capital Raising per share.
• $NZ 1,500,000 Vendor Financing on purchase of Waipa Meadows farm.

8.	Estimated cash available for future operating activities	$NZ'000
8.1	Net cash from / (used in) operating activities (item 1.9)	(904)
8.2	Cash and cash equivalents at quarter end (item 4.6)	4,047
8.3*	Unused finance facilities available at quarter end (item 7.5)	179
8.4	Total available funding (item 8.2 + item 8.3)	4,226
8.5**	Estimated quarters of funding available (item 8.4 divided by
	item 8.1)	5
	* 8.3: Gross unused financing available at quarter end of $NZ 1.2 million includes provision for
	interest capitalisation.

Note: if the entity has reported positive net operating cash flows in item 1.9, answer item 8.5 as "N/A". Otherwise, a figure for the estimated quarters of funding available must be included in item 8.5.

8.6 If item 8.5 is less than 2 quarters, please provide answers to the following questions:

8.6.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?

Answer:

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