VANCOUVER, BC,
March 16, 2022 /CNW/ -
The Very Good Food Company Inc. (NASDAQ: VGFC) (TSXV: VERY.V)
(FSE: OSI) ("VERY GOOD" or the "Company"), a leading
plant-based food technology company, today announced that the
Company is temporarily lowering production throughput and headcount
to manage inventory levels, and implementing initiatives such as
pausing non-critical capital expenditures and lowering SG&A
spending, to manage both short and long-term liquidity and to
establish a path towards profitability.
"As a result of the supply chain environment, we undertook
certain stock safety measures to protect against stock outages,"
stated Mitchell Scott, CEO, and
founder of VERY GOOD. "This, in conjunction with retailer reset
timing delays, has resulted in inventory being at levels that
require us to lower production at some of our locations. This
decision was made after a long and careful review of our options
and will impact some of our production team members. We are
thankful for their contributions."
VERY GOOD is taking this opportunity to implement additional
cost improvement measures as it transitions from a focus on top
line growth, to a focus of balancing top line growth and
profitability. As part of this shift, VERY GOOD expects to further
right-size its workforce across multiple business functions as it
streamlines operations.
VERY GOOD is currently reviewing its "go-to market" channels.
"Digital marketing costs to acquire new customers have increased
over the past year, largely related to structural changes of the
largest digital and social platforms," stated Mitchell Scott, CEO, and founder of VERY GOOD,
"This challenge has required us to review our online strategy and
marketing expenditures to optimize our return on investment. As
such, we expect our growth will slow down in the near-term in this
channel." VERY GOOD will continue to focus on the wholesale and
food service channels, particularly in the US, which the Company
views as critical to realizing its vision to scale.
VERY GOOD experienced a greater than expected cash burn in the
last several months as the Company scaled its operations to meet
its growth targets, which has reduced its cash position and has
strained its short-term liquidity. The initiatives VERY GOOD is
implementing, including pausing non-critical capex and
significantly lowering SG&A spending, will allow the Company to
manage both short-term and long-term liquidity and increase its
cash runway. Management will continue to evaluate ways to
increase its cash position and/or seek additional financings with
as little dilution as possible.
We thank our team members for their focus and dedication
throughout this process.
About The Very Good Food Company Inc.
The Very Good Food Company Inc. is an emerging plant-based food
technology company that produces nutritious and delicious
plant-based meat and cheese products under VERY GOOD's core brands:
The Very Good Butchers and The Very Good Cheese
Co. www.verygoodfood.com.
OUR MISSION IS LOFTY, BADASS BUT BEAUTIFULLY SIMPLE: GET
MILLIONS TO RETHINK THEIR FOOD CHOICES WHILE HELPING THEM DO THE
WORLD A WORLD OF GOOD. BY OFFERING PLANT-BASED FOOD OPTIONS SO
DELICIOUS AND NUTRITIOUS, WE'RE HELPING THIS KIND OF DIET BECOME
THE NORM.
ON BEHALF OF THE VERY GOOD FOOD COMPANY INC
Mitchell Scott
Founder and Chief Executive Officer
Forward-Looking Information
This news release contains "forward-looking information" within
the meaning of applicable securities laws in Canada and "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995, including Section 21E of the Securities
Exchange Act of 1934, as amended (collectively referred to as
"forward-looking information"), for the purpose of providing
information about management's current expectations and plans
relating to the future. Readers are cautioned that reliance on such
information may not be appropriate for other purposes.
Forward-looking information may be identified by words such as
"plans", "proposed", "expects", "anticipates", "intends",
"estimates", "may", "will", and similar expressions.
Forward-looking information contained or referred to in this news
release includes, but is not limited to, statements regarding the
Company's plans to lower throughput and headcount at some
locations, manage inventory levels and implement initiatives, such
as temporarily pausing non-critical capital expenditures and
lowering SG&A spending, to manage both short and long-term
liquidity and establish a path towards profitability; the Company's
intended transition from a focus on top line growth to balancing
top line growth and profitability; future workforce reductions; the
Company's strategic review of its go-to market channels and the
potential outcome of such review; the Company's focus on the
wholesale and food service channels; management's belief that the
initiatives being implemented will allow the Company to manage both
its short-term and long-term liquidity and increase its cash
runway; and management's efforts to evaluate ways to support the
business with as little dilution as possible. Forward-looking
information is based on a number of factors and assumptions which
have been used to develop such information, but which may prove to
be incorrect including, but not limited to, material assumptions
with respect to the Company's ability to successfully implement the
cost improvement initiatives and measures and achieve their
intended benefits, the availability of sufficient financing on
reasonable terms to fund VERY GOOD's capital and operating
requirements, the Company's ability to accurately forecast customer
demand for its products and manage its inventory levels, continued
demand for VERY GOOD's products, continued growth of the popularity
of meat alternatives and the plant-based food industry, the
successful placement of VERY GOOD's products in retail stores and
continued wholesale expansion in particular in the US, VERY GOOD's
ability to obtain necessary production equipment and human
resources as needed, VERY GOOD's relationship with its suppliers,
distributors and third-party logistics providers, and management's
ability to position VERY GOOD competitively. Although the Company
believes that the expectations reflected in such forward-looking
information are reasonable, undue reliance should not be placed on
forward-looking information because VERY GOOD can give no assurance
that such expectations will prove to be correct. Risks and
uncertainties that could cause actual results, performance or
achievements of VERY GOOD to differ materially from those expressed
or implied in such forward-looking information include, among
others, the impact of, uncertainties and risks associated with
negative cash flow and future financing requirements to sustain and
grow operations, limited history of operations and revenues and no
history of earnings or dividends, expansion of facilities,
competition, availability of raw materials, dependence on senior
management and key personnel, availability of labour, general
business risk and liability, regulation of the food industry,
change in laws, regulations and guidelines, compliance with laws,
unfavorable publicity or consumer perception, product liability and
product recalls, risks related to intellectual property,
difficulties with forecasts, management of growth and litigation as
well as the risks associated with the ongoing COVID-19 pandemic.
For a more comprehensive discussion of the risks faced by VERY
GOOD, please refer to VERY GOOD's most recent Annual Information
Form filed with Canadian securities regulatory authorities at
www.sedar.com and as an exhibit to the registration statement on
Form F-10 filed with the SEC and available at www.sec.gov. The
forward-looking information in this news release reflects the
current expectations, assumptions and/or beliefs of the Company
based on information currently available. Any forward-looking
information speaks only as of the date of this news release. VERY
GOOD undertakes no obligation to publicly update or revise any
forward-looking information whether because of new information,
future events or otherwise, except as otherwise required by law.
The forward-looking information contained in this news release is
expressly qualified by this cautionary statement.
None of the Nasdaq, TSX Venture Exchange, the SEC or any other
securities regulator has either approved or disapproved the
contents of this news release. None of the Nasdaq, the TSX Venture
Exchange or its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange), the SEC or
any other securities regulator accepts responsibility for the
adequacy or accuracy of this news release.
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SOURCE The Very Good Food Company Inc.