2019
ANNUAL REPORT
1
PROFILE
is a leading online grocery company in Canada. We deliver
fresh meals and grocery products coast to coast and make it easier
for our members to enjoy delicious meals at home, every week.
Goodfood’s mission is to make the impossible come true, from farm
to kitchen, and we achieve that by empowering our members to
complete their weekly meal planning and grocery shopping in less
than 1 minute. Goodfood members have access to a unique selection
of products online and exclusive pricing made possible by our world-
class fulfilment ecosystem that nearly eliminates food waste and the
expensive grocery store brick-and-mortar overhead.
2
2
AT A GLANCE
GOODFOOD’S NATIONAL OPERATING FOOTPRINT REACHES
95% OF THE CANADIAN POPULATION
$750M of sales capacity and 302,000 sq. ft in four production facilities
1
2
WESTERN CANADA
Capacity to serve
150-200K subscribers(1)
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3
EASTERN CANADA
Capacity to serve
300-400K subscribers(1)
1. VANCOUVER, BC
2. CALGARY, AB
3. MONTREAL, QC - BREAKFAST
4. MONTREAL, QC
84,000 sq. ft production
and distribution facility
($50M sales capacity)
Opening in FY2020
43,000 sq. ft production
and distribution facility
($200M sales capacity)
20,000 sq. ft production and distribution
facility for breakfast meal solutions
($100M sales capacity)
HQ & 155,000 sq. ft production
and distribution facility
($400M sales capacity)
1,800
200,000
4
$161,333
$200,830
EMPLOYEES
SUBSCRIBERS1
PRODUCTION
FACILITIES
REVENUE
(in thousands of
Canadian $)
GMS1
(in thousands of
Canadian $)
(1) This is a metric or non-IFRS financial measure which does not have a standardized meaning prescribed by IFRS and may therefore not be comparable to similar
measures presented by other issuers. Please refer to the Metrics and Non-IFRS financial measures section in the Management’s Discussion and Analysis.
3
3
3-YEAR FINANCIAL HIGHLIGHTS
(In thousands of Canadian dollars except active subscribers, margins and per share data)
For the years ended August 31,
2019
% ∆
2018
% ∆
2017
OPERATING RESULTS
Active subscribers(1)
Revenue
Gross merchandise sales(1)
Gross profit
Gross margin
Adjusted gross profit(1)
Adjusted gross margin(1)
Net loss being comprehensive loss
Basic and diluted loss per share
FINANCIAL POSITION
Cash(2)
Fixed assets
Total assets
Total debt(3)
Shareholders’ equity
CASH FLOWS PROVIDED BY (USED IN)
Operating activities
Financing activities
Investing activities
200,000
$161,333
200,830
40,310
125%
129%
139%
175%
89,000
187%
$70,502
256%
84,093
264%
14,660
308%
25.0%
4.2 pp
20.8%
2.7 pp
79,807
39.7%
(20,937)
(0.38)
$47,649
13,545
80,783
14,031
17,401
$880
29,555
(7,239)
182%
6.1 pp
28,251
311%
33.6%
3.8 pp
(9,434)
(0.19)
$24,453
6,006
34,309
2,592
16,456
$176
10,901
(4,171)
31,000
$19,796
23,081
3,590
18.1%
6,875
29.8%
(9,866)
(0.32)
$17,548
2,300
21,310
512
16,352
$(1,885)
20,767
(1,853)
(1) This is a metric or non-IFRS financial measure which does not have a standardized meaning prescribed by IFRS and may therefore not be comparable to similar
measures presented by other issuers. Please refer to the Metrics and Non-IFRS financial measures section in the Management’s Discussion and Analysis.
(2) Includes cash, cash equivalents and restricted cash.
(3) Includes the line of credit and the current and non-current portion of the long-term debt.
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KEY HIGHLIGHTS OF 2019
NEW MEAL SOLUTIONS
• Launched 75+ private-label grocery products and rapidly increasing our offering
• Launched 27+ new breakfast meal solutions
• Launched ready-to-eat meal solutions inspired by Goodfood’s best-rated recipes
• Launched value-positioned meal kit brand Yumm.ca
• Launched Clean 15 meal kit plan
EXPANDING PRODUCTION AND SALES CAPACITY
• Expanded main Montreal facility to 155,000 sq. ft
• Leased 84,000 sq. ft facility in Vancouver
• Leased 20,000 sq. ft facility for breakfast meal solutions in Montreal
• Expanded production section of Calgary facility
• Invested significantly in automation to drive operating efficiency and improve
cost structure
• $750 million of sales capacity across 4 production facilities
Jonathan Ferrari, Co-Founder, Chairman
of the Board and CEO, featuring the new
eco-friendly reusable box.
NEW FINANCING
• Obtained new bank and secured debt financing for a total of $25.5 million
• Completed equity financing for gross proceeds of $26.3 million
IMPROVING MEMBER EXPERIENCE
• Launched proprietary eco-friendly reusable box to help eliminate several million
single-use packaging items
• Developed and launched mobile App to simplify members’ ordering process
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EVOLUTION OF KEY METRICS
SUBSCRIBERS(1)
+125%
159,000
189,000
200,000
126,000
89,000
Q4-18
Q1-19
Q2-19
Q3-19
Q4-19
REVENUE AND GMS(1) TRAILING 12 MONTHS
(in thousands of Canadian $)
GMS(1) GROWTH
+139%
200,830
170,664
161,333
107,923
109,804
135,618
137,445
84,093
88,884
70,502
Q4-18
Q1-19
Q2-19
Q3-19
Q4-19
Revenue
GMS(1)
GROSS PROFIT (%) AND ADJUSTED GROSS PROFIT (%)(1)
35.0%
37.7%
37.8%
21.5%
21.9%
20.9%
41.6%
40.7%
28.3%
26.7%
+5.7
pp
+5.2
pp
Q4-18
Q1-19
Q2-19
Q3-19
Q4-19
Gross profit (%)
Adjusted gross profit (%)(1)
(1) This is a metric or non-IFRS financial measure which does not have a standardized meaning prescribed by IFRS and may therefore
not be comparable to similar measures presented by other issuers. Please refer to the Metrics and Non-IFRS financial measures
6
section in the Management’s Discussion and Analysis.
MESSAGE TO SHAREHOLDERS
Jonathan Ferrari
Co-Founder, Chairman of the Board and CEO
Neil Cuggy
Co-Founder, Director, President and COO
Goodfood continues to attain key milestones on its journey to become Canada’s
leading online grocer. In 2014, we founded the Company by combining our passion
for food and technology. Five years later, we are an industry disrupter and leading
player in the Canadian online grocery market, with an impressive growth profile,
a unique customer experience, a diverse product offering, and state-of-the-art
operations across Canada.
CONTINUED GROWTH
Over the past year, we have demonstrated our ability to stay at the forefront of today’s food industry,
contributing to its rapid evolution. Leveraging our unique platform and obsession with member
experience, we have more than doubled our active Goodfood subscribers(1) – from 89,000 a year ago
to 200,000 at the end of Fiscal 2019. Growing our subscriber(1) base by 125% has translated in gross
merchandise sales(1) growth of 139%, allowing us to surpass the $200 million mark for the first time.
To support our continued growth, we have undertaken important strategic initiatives to expand our
operations and improve our efficiency. In Montreal and Calgary, our recently completed expansions
have more than doubled our production capacity. With the addition of a new facility in Montreal,
focusing on breakfast meal solutions, and the upcoming opening of a facility in Vancouver, Goodfood
is well positioned to continue on its growth trajectory and support sales of up to $750 million with the
existing operating footprint.
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(1) This is a metric or non-IFRS financial measure which does not have a standardized meaning prescribed by IFRS and may
therefore not be comparable to similar measures presented by other issuers. Please refer to the Metrics and Non-IFRS
financial measures section in the Management’s Discussion and Analysis.
MESSAGE TO SHAREHOLDERS
With profitability in mind, we have invested significantly in automation, dedicating capital and
resources to improve the efficiency of our operations and cost structure. Automation is leading to
substantial optimization of our labor cost in addition to moving our fulfilment operations to world-
class level.
MORE AND BETTER CHOICES, FOR A BETTER EXPERIENCE
Our growth this year has been in large part driven by the exceptional experience we offer our members.
Goodfood’s mission is to make the impossible come true, from farm to kitchen, and we have taken
important steps forward in achieving this mission with our subscriber experience. In addition to our
growing meal kit offering, we have introduced key new products:
• Breakfast: Delicious smoothies, artisanal oat bowls and chef-inspired omelettes
• Ready-to-eat: Meals ready to be enjoyed in 2-4 minutes, inspired by Goodfood-developed,
highly rated recipes
• Private-label grocery items: Products of high quality, priced at a ~15% discount to the grocery-
store branded equivalents by eliminating expensive overhead, waste and the need for brick-
and-mortar stores
To lead these initiatives, we have hired exceptionally talented people who align closely with our core
values of dedication to Goodfood and our members, hunger for improvement and the pursuit of doing
more with less. Their strong profiles and work experience at internationally renowned institutions
will go a long way in building successful new product lines and continuing to improve our members’
experience.
Our new product offerings are a core part of Goodfood’s strategy and our goal of being the Canadian
leader in online grocery delivery. The food grocery retail industry in Canada is valued at approximately
$124 billion and we are working to capture a large part of its growing online portion, estimated by
industry analysts to increase from below $2 billion to more than $13 billion in the near term.
Our new product offerings have also been developed to respond to our members’ demands. We are
completely focused on our customers’ happiness and believe that their satisfaction is the clearest
driver of returns for our shareholders. Every day, our team works tirelessly to improve member
experience, offer better choices and drive our mission forward.
A GREEN VISION FOR GOODFOOD
Each and everyone of us has a level of responsibility towards the environment. Goodfood, as a rapidly
growing company, industry disruptor and corporate citizen, has taken concrete action to ensure that
we do our part for the planet and for the generations to come. Not only do we collect cardboard boxes
in major Canadian cities, but we have also launched a new and proprietary reusable box and ice pack
to eliminate several million of single-use packaging. Moreover, we are committed to reducing our
use of plastic inside our delivery boxes by 50% in the upcoming 12 months. Together, these initiatives
confirm our green vision while still providing a positive return on investment for our shareholders.
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MESSAGE TO SHAREHOLDERS
2020 AND BEYOND
Fiscal year 2019 has been a resounding success. By reaching the 200,000 subscribers(1) mark, we
have cemented our market leadership and opened new possibilities for Goodfood. As we embark in a
new year, our successful strategy could not provide us with a clearer path for growth and profitability.
In Fiscal 2020 and beyond, our strategy will build on the firm belief that our meal solutions will be
at the center of the Canadian digital grocery basket and be completed by our private label product
offering. We will continue to build a presence in home meal solutions and put our efforts into
becoming the leading Canadian online grocer. We will also further invest in automation to make our
operations more cost-efficient and make fulfilment not only a core competency, but a competitive
advantage for Goodfood.
With our strong operating footprint and exceptional team of professionals, we are gearing for
another successful year in 2020, and well beyond.
MOST IMPORTANTLY
Having grown our workforce by 1,000 employees, our exceptional performance this year reflects the
dedication of our people and the unwavering confidence of our shareholders, members, suppliers
and other stakeholders. We want to express our deep appreciation for your trust and support.
Our Board of Directors also plays a key role in providing guidance and bolstering our corporate
governance. We would like to thank Guy Leblanc, who stepped down this year to become Head of
Investissement Québec, for his contribution and extend a warm welcome to Terry Yanofsky and
François Vimard, who joined the Board in May and August, respectively. Their combined experience
will be instrumental in guiding Goodfood to its next level of growth.
When we put together our first meal kits in 2014, we envisioned continuously improving the
experience of Canadians in the kitchen. Our goal to be in every kitchen, every day, is ever closer. As
we continue to build towards that ambitious goal, it is with great pride that we share with you our
exceptional Fiscal year 2019 financial results.
Sincerely,
Jonathan Ferrari
Neil Cuggy
Co-Founder, Chairman of the Board
Co-Founder, Director, President
and CEO
and COO
9
(1) This is a metric or non-IFRS financial measure which does not have a standardized meaning prescribed by IFRS and may
therefore not be comparable to similar measures presented by other issuers. Please refer to the Metrics and Non-IFRS
financial measures section in the Management’s Discussion and Analysis.
BOARD OF DIRECTORS
JONATHAN FERRARI
NEIL CUGGY
Co-Founder, Chairman of the
Co-Founder, Director, President and
Board & CEO
COO
HAMNETT HILL
Director
DONALD OLDS
Director
TERRY YANOFSKY
Director
FRANÇOIS VIMARD
Director
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MANAGEMENT DISCUSSION AND
ANALYSIS
GOODFOOD
MARKET
CORP.
YEAR ENDED AUGUST 31, 2019
Goodfood Market Corp.
TABLE OF CONTENTS
Management’s Discussion and Analysis
Year ended August 31, 2019
BASIS OF PRESENTATION ....................................................................................................................... 13
FORWARD-LOOKING STATEMENTS ....................................................................................................... 13
NON-IFRS MEASURES .............................................................................................................................. 14
COMPANY OVERVIEW .............................................................................................................................. 14
FINANCIAL OUTLOOK ............................................................................................................................... 14
FISCAL 2019 HIGHLIGHTS........................................................................................................................ 15
SELECTED ANNUAL FINANCIAL INFORMATION ................................................................................... 18
METRICS AND NON-IFRS FINANCIAL MEASURES ................................................................................ 18
RESULTS OF OPERATIONS – FISCAL 2019 AND 2018 ......................................................................... 22
RESULTS OF OPERATIONS – THREE-MONTH PERIODS ENDED AUGUST 31, 2019 AND 2018 ...... 23
FINANCIAL POSITION ............................................................................................................................... 25
LIQUIDITY AND CAPITAL RESOURCES .................................................................................................. 26
SELECTED QUARTERLY INFORMATION AND RECONCILIATION OF QUARTERLY NON-IFRS
MEASURES ................................................................................................................................................ 29
TRENDS AND SEASONALITY ................................................................................................................... 29
FINANCIAL RISK MANAGEMENT ............................................................................................................. 30
BUSINESS RISK ......................................................................................................................................... 30
ADDITIONAL FINANCING REQUIREMENTS ............................................................................................ 30
OFF-BALANCE SHEET ARRANGEMENTS .............................................................................................. 30
FINANCIAL INSTRUMENTS ...................................................................................................................... 31
RELATED PARTY TRANSACTIONS ......................................................................................................... 31
OUTSTANDING SHARE DATA .................................................................................................................. 31
USE OF PROCEEDS FROM PUBLIC OFFERINGS .................................................................................. 32
SEGMENT REPORTING ............................................................................................................................ 33
DIVIDEND POLICY ..................................................................................................................................... 33
CRITICAL ACCOUNTING ESTIMATES ..................................................................................................... 33
ADOPTION OF NEW ACCOUNTING STANDARDS ................................................................................. 33
STANDARDS ISSUED BUT NOT YET EFFECTIVE .................................................................................. 34
DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL
REPORTING ............................................................................................................................................... 35
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Goodfood Market Corp.
BASIS OF PRESENTATION
Management’s Discussion and Analysis
Year ended August 31, 2019
The following has been prepared for the purposes of providing Management’s Discussion and Analysis
(“MD&A”) of the financial condition of Goodfood Market Corp. and its subsidiary (also referred to in this
MD&A as “we”, “our”, “Goodfood” or “the Company”) as at August 31, 2019, and the operating results of
the Company for the year then ended. In March 2019, the Company created a wholly-owned subsidiary,
Yumm Meal Solutions Corp. This MD&A is dated November 14, 2019, and reflects information available at
this date. All references in this MD&A to Fiscal 2019 and to Fiscal 2018 are to the fiscal year ended
August 31, 2019, and August 31, 2018, respectively. This document should be read in conjunction with the
Company’s Consolidated Annual Audited Financial Statements and notes thereto for the year ended
August 31, 2019. All amounts herein are expressed in Canadian dollars unless otherwise indicated.
The Company’s Consolidated Annual Audited Financial Statements were prepared in accordance with
International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards
Board (“IASB”) and the financial information herein was derived from those statements. Goodfood has
applied IFRS 15, Revenue from Contracts with Customers (“IFRS 15”), and IFRS 9, Financial instruments
(“IFRS 9”) and has early adopted IFRS 16, Leases (“IFRS 16”).
Management determines whether information is material based on whether they believe a reasonable
investor’s decision to buy, sell or hold securities of the Company would likely be influenced or changed
should the information be omitted or misstated, and discloses material information accordingly.
FORWARD-LOOKING STATEMENTS
This MD&A contains “forward-looking information” within the meaning of applicable Canadian securities
legislation. Such forward-looking information includes, but is not limited to, information with respect to our
objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs,
plans, expectations, anticipations, estimates and intentions. This forward-looking information is identified
by the use of terms and phrases such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”,
“anticipate”, “plan”, “foresee”, “believe”, and “continue”, as well as the negative of these terms and similar
terminology, including references to assumptions, although not all forward-looking information contains
these terms and phrases. Forward-looking information is provided for the purposes of assisting the reader
in understanding the Company and its business, operations, prospects and risks at a point in time in the
context of historical and possible future developments and therefore the reader is cautioned that such
information may not be appropriate for other purposes. Forward-looking information is based upon a
number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond
our control, which could cause actual results to differ materially from those that are disclosed in, or implied
by, such forward-looking information. These risks and uncertainties include, but are not limited to, the
following risk factors which are discussed in greater detail under “Risk Factors” in the Company’s Annual
Information Form for the year ended August 31, 2019 available on SEDAR at www.sedar.com: limited
operating history, negative operating cash flow, food industry, quality control and health concerns,
regulatory compliance, regulation of the industry, public safety issues, product recalls, damage to
Goodfood’s reputation, transportation disruptions, product liability, ownership and protection of intellectual
property, evolving industry, unionization activities, reliance on management, factors which may prevent
realization of growth targets, competition, availability and quality of raw materials, environmental and
employee health and safety regulations, online security breaches and disruption, reliance on data centers,
open source license compliance, future capital requirements, operating risk and insurance coverage,
management of growth, limited number of products, conflicts of interest, litigation, catastrophic events, risks
associated with payments from customers and third parties, being accused of infringing intellectual property
rights of others and, climate change and environmental risks. Although the forward-looking information
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Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
contained herein is based upon what we believe are reasonable assumptions, readers are cautioned
against placing undue reliance on this information since actual results may vary from the forward-looking
information. Certain assumptions were made in preparing the forward-looking information concerning the
availability of capital resources, business performance, market conditions, and customer demand.
Consequently, all of the forward-looking information contained herein is qualified by the foregoing
cautionary statements, and there can be no guarantee that the results or developments that we anticipate
will be realized or, even if substantially realized, that they will have the expected consequences or effects
on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise
indicates, the forward-looking information contained herein is provided as of the date hereof, and we do not
undertake to update or amend such forward-looking information whether as a result of new information,
future events or otherwise, except as may be required by applicable law.
NON-IFRS MEASURES
Certain financial measures used in this MD&A do not have any standardized meaning under IFRS, including
“Gross merchandise sales”, “Adjusted gross profit”, “Adjusted gross margin”, “EBITDA”, “Adjusted EBITDA”
and “Adjusted EBITDA margin”. For the definition and reconciliation of these non-IFRS financial measures
to the most comparable IFRS financial measures, as applicable, see the “Metrics and Non-IFRS Financial
Measures” section of this MD&A.
COMPANY OVERVIEW
Goodfood is a leading online grocery company in Canada, delivering fresh meal solutions and grocery items
that make it easy for members from coast to coast to enjoy delicious meals at home every week. Goodfood’s
mission is to make the impossible come true, from farm to kitchen, by enabling members to do their weekly
meal planning and grocery shopping in less than 1 minute. Goodfood members get access to a unique
selection of products online as well as exclusive pricing made possible by its world-class direct-to-consumer
fulfilment ecosystem that cuts out food waste and expensive retail overhead. The Company has its main
production facility and administrative offices based in Montreal, Quebec, and two secondary production
facilities in Alberta and Quebec, with an additional production facility scheduled to open in January 2020 in
British Columbia. Goodfood had 200,000 active subscribers as at August 31, 2019.
FINANCIAL OUTLOOK
The online grocery industry is one of the fastest growing industries in the world. As a result, Goodfood
believes that there are significant opportunities and advantages to rapidly grow its subscriber base by
continuing to invest in highly targeted marketing campaigns, capacity expansion through additional facilities
and investments in automation, increasing its product offering and in continuing to expand its national
platform. Goodfood's strategy is in part to delay short-term profitability in order to invest in long-term
shareholder value creation. Growing Goodfood's market share, scale and product offering will allow the
Company to deliver greater value to its customers while attaining high returns on invested capital. As the
Company grows its subscriber base, we are confident that Goodfood will achieve economies of scale and
additional efficiencies which will lead to improvements in profitability while maintaining an unrivalled
experience for subscribers.
These objectives are based upon assumptions and are subject to risks and uncertainties, many of which
are beyond our control. These risks and uncertainties could cause actual results to differ materially from
these objectives. See the ‘‘Forward-Looking Statements’’ and ‘‘Business Risk” sections of this MD&A.
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Goodfood Market Corp.
FISCAL 2019 HIGHLIGHTS
Management’s Discussion and Analysis
Year ended August 31, 2019
HIGHLIGHTS OF FISCAL 2019 COMPARED TO FISCAL 2018 (1)
Revenue reached $161.3 million, an increase of $90.8 million, or 129%.
Gross margin reached 25.0%, an improvement of 4.2 percentage points.
Gross profit reached $40.3 million, an increase of $25.7 million, or 175%.
Net loss reached $20.9 million, an increase of $11.5 million, resulting in net loss per share of $0.38.
Cash provided by operating activities reached $0.9 million, an increase of $0.7 million.
Cash and cash equivalents and restricted cash as at August 31, 2019 reached $47.6 million, an
increase of $23.2 million compared to August 31, 2018.
Gross merchandise sales reached $200.8 million, an increase of $116.7 million, or 139%.
Adjusted gross margin reached 39.7%, an improvement of 6.1 percentage points.
Adjusted gross profit reached $79.8 million, an increase of $51.6 million, or 182%.
Active subscribers reached 200,000 as at August 31, 2019, an increase of 111,000, or 125%, compared
to August 31, 2018.
HIGHLIGHTS OF THE THREE-MONTH PERIOD ENDED AUGUST 31, 2019 COMPARED TO THE
THREE-MONTH PERIOD ENDED AUGUST 31, 2018 (1)
Revenue reached $45.3 million, an increase of $23.9 million, or 112%.
Gross margin reached 26.7%, an improvement of 5.2 percentage points.
Gross profit reached $12.1 million, an increase of $7.5 million, or 163%.
Net loss reached $5.9 million, an increase of $2.9 million, resulting in net loss per share of $0.10.
Cash used in operating activities reached $2.7 million, a decrease of $3.6 million.
Gross merchandise sales reached $56.0 million, an increase of $30.2 million, or 117%.
Adjusted gross margin reached 40.7%, an improvement of 5.7 percentage points.
Adjusted gross profit reached $22.8 million, an increase of $13.8 million, or 152%.
(1) The transition to IFRS 16 on September 1, 2018 had an impact on gross margin, adjusted gross margin,
gross profit, adjusted gross profit, net loss and cash provided by operating activities. Refer to the related
sections of this MD&A for the impact of the transition to IFRS 16.
KEY HIGHLIGHTS OF FISCAL 2019 AND SUBSEQUENT EVENTS
Expansion of Main Production Facility Located in Quebec, Canada
On September 24, 2018, the Company signed an amendment to the lease of the main production facility
located in Montreal, to renew and extend the term of the initial premises and lease an additional
72,000 square-feet area, expanding to a total of 155,000 square feet, which doubles the production capacity
of the facility. The initial lease term ends in October 2023 with renewal options for a further fifteen years.
The leasehold improvements were substantially completed by August 31, 2019. It allowed the Company to
efficiently manage its continued strong growth through added meal kit production capabilities and capacity
to provide additional grocery products to its customers.
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Goodfood Market Corp.
Debt Financing
Management’s Discussion and Analysis
Year ended August 31, 2019
In November 2018, the Company signed an agreement with a leading Canadian financial institution for a
secured three-year term loan of $10 million, a $2.5 million revolving line of credit and $1 million in other
short-term financing. In April 2019, the Canadian financial institution increased the amount in other
short-term financing from $1 million to $3 million.
In August 2019, the Company obtained a commitment from the same Canadian financial institution for an
additional secured term loan of $2.5 million, bearing the same terms as the agreement signed in
November 2018. The Canadian financial institution also increased the amount of the revolving line of credit
from $2.5 million to $10 million and the amount of other short-term financing from $3 million to $5 million.
The term loan and the revolving line of credit bear variable interest at the Canadian Dollar Offered Rate
(“CDOR”) plus 2.50%. The term loans are repayable in quarterly installments of $125 thousand and
$31 thousand beginning on December 4, 2020 and August 31, 2020, respectively, with a bullet repayment
of the balance at the end of the term in November 2021.
As at August 31, 2019, $1.5 million of the revolving line of credit was disbursed and $12.5 million of the
term loans were disbursed with proceeds used to fund expansion capital expenditures, invest in automation
and refinance the Company’s long-term debt.
In March 2019, the Company signed two interest rate swap agreements with the same leading Canadian
financial institution. With these agreements, the Company effectively fixed the interest rate on notional
amounts of $2.5 million and $1.3 million, at rates of 4.72% and 4.57%, respectively, of the Company’s
long-term debt until maturity in November 2021.
Equity Issuance
On February 22, 2019, the Company completed a public offering and issued 6,019,212 common shares for
gross proceeds of $21.1 million. The Company has used a portion of these proceeds and will continue to
use the proceeds for investments in automation, the expansion of the Alberta production facility, the
development and rollout of breakfast and ready-to-eat meal solutions, the development of sustainable
packaging, working capital and general corporate purposes. Refer to the “Use of Proceeds from Public
Offerings” section of this MD&A for more information on use of proceeds.
Expansion of Alberta, Canada Production Facility
During the second half of Fiscal 2019, the Company undertook major leasehold improvements in its Alberta,
Canada production facility in order to increase the production capacity of this facility. The leasehold
improvements were substantially completed by August 31, 2019. The added capacity will contribute to fulfill
the growing demand for Goodfood products in Alberta and Western Canada in general.
Yumm.ca
On May 16, 2019, the Company announced the launch of Yumm.ca, a value meal solutions option targeting
cost-conscious customers available nationwide.
Breakfast Meal Solutions and Production Facility
On June 10, 2019, the Company announced that its first breakfast meal solution, ready-to-blend superfood
smoothies, was now available across Canada. Since then, the Company has expanded the breakfast
product offering through the development of artisanal oat bowls and savoury omelettes.
On June 18, 2019, the Company signed a five-year lease with a renewal option of three years for a
20,000 square-feet breakfast production facility located in Quebec, Canada. Fixed rent payments represent
a total commitment of $895 thousand. Operations began in the new facility in August 2019.
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Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
British Columbia, Canada Production Facility
On July 3, 2019, the Company signed a ten-year lease with a renewal option of five years for an
84,000 square-feet production facility located in British Columbia, Canada. The facility’s delivery date was
October 1, 2019, and the payment commencement date is January 15, 2020. Leasehold improvements in
the facility began on October 1, 2019, and management intends to begin operations in the new facility in
the beginning of calendar year 2020. Fixed rent payments represent a total commitment of $14.6 million.
The facility will be used to service customers in British Columbia, and offers flexibility in operational
capabilities with space available for ready-to-cook products and possibly additional product offerings.
Ready-to-Eat Meal Solutions
In July 2019, the Company launched its ready-to-eat meal solutions in the province of Quebec and is
gradually expanding its distribution across Canada. The ready-to-eat product offering is comprised of
prepared meals inspired by our internally-developed, original and highest rated ready-to-cook recipes, fresh
salads, and hearty soups. The ready-to-eat product offering aims to expand the Company’s offering to
existing and prospective customers in order to provide full home meal solutions across the different meals
of the day.
Active Subscribers
As at August 31, 2019, we reached the 200,000 active subscribers mark. The new milestone resulted from
the addition of 11,000 net new active subscribers in the fourth quarter and 111,0000 net new active
subscribers for the fiscal year.
Private Label Offerings
In the fourth quarter of Fiscal 2019, the Company launched its private label products in the province of
Quebec and is gradually expanding its distribution across Canada. The Company offers everyday grocery
essentials with exclusive prices, including extra virgin olive oil, sea salt, a variety of premium proteins,
peanut butter, tea and more.
New Board Members
Terry Yanofsky and François Vimard joined Goodfood's Board of Directors in May and August of 2019,
respectively. Ms. Yanofsky is the Senior Vice-President, General Manager of Sephora Canada and a
seasoned retail executive. Mr. Vimard joined as Chair of the Audit Committee and is currently an
independent Corporate Director. He spent over 22 years at Empire Ltd/Sobeys Inc., where he was most
recently Interim President and CEO of both organizations and held the position of CFO from 2007 to 2016.
Reusable Delivery Box Launch
On October 16, 2019, the Company launched its reusable delivery box in Alberta and Quebec, positioning
the Company as a leader in the industry with respect to environmental sustainability initiatives.
17 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
SELECTED ANNUAL FINANCIAL INFORMATION
The selected financial information below was derived from the Company’s Consolidated Annual Audited
Financial Statements for the years ended August 31, 2019 and 2018, prepared in accordance with IFRS.
(In thousands of Canadian dollars)
August 31, 2019
August 31, 2018
Financial position
Cash and cash equivalents and restricted cash
$
47,649
$ 24,453
Fixed assets
Total assets
Total debt (1)
Shareholders’ equity
13,545
80,783
14,031
17,401
6,006
34,309
2,592
16,456
(1) Total debt consists of the line of credit and the current and non-current portion of long-term debt.
(In thousands of Canadian dollars)
Comprehensive loss
Revenue
Gross profit
Net loss, being comprehensive loss
Basic and diluted loss per share
Cash flows provided by (used in):
Operating activities
Financing activities
Investing activities
Years ended August 31,
2018
2019
$ 161,333
$ 70,502
40,310
(20,937)
(0.38)
14,660
(9,434)
(0.19)
$
880
$
176
29,555
(7,239)
10,901
(4,171)
METRICS AND NON-IFRS FINANCIAL MEASURES
This section describes metrics and non-IFRS financial measures used by the Company throughout this
MD&A. It also provides a reconciliation between non-IFRS financial measures and the most comparable
IFRS financial measures, where applicable. Non-IFRS financial measures do not have standard definitions
prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other
companies. Non-IFRS financial measures are provided as additional information to complement IFRS
measures and to provide a further understanding of the Company’s results of operations from our
perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our
financial information reported under IFRS and should be read in conjunction with the respective financial
statements for the periods indicated.
18 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
Metrics
Active
subscribers
Definitions
An account that is scheduled to receive a delivery or has elected to skip delivery
in the subsequent weekly delivery cycle. Active subscribers exclude cancelled
accounts. For greater certainty, an Active subscriber is only accounted for once,
although different products might have been ordered in a given weekly delivery
cycle. While active subscribers is not an IFRS or Non-IFRS Financial Measure,
and therefore, does not appear in, and cannot be reconciled to, a specific line item
in our consolidated financial statements, we believe that active subscribers is a
useful metric for investors because it is indicative of potential future revenues. The
Company reports the number of active subscribers at the beginning and end of
the period, rounded to the nearest thousand.
Non-IFRS
financial
measures
Gross
merchandise
sales (“GMS”)
Adjusted gross
profit
&
Adjusted gross
margin
EBITDA,
Adjusted EBITDA
&
Adjusted EBITDA
margin
Definitions
Gross merchandise sales measures the total retail value of goods sold by the
Company and is calculated before taking into account all incentives and credits
included in revenue. Incentives and credits, presented at retail value, are
principally comprised of sign-up inducements, which typically provide new active
subscribers with a discount on their first delivery. GMS is a non-IFRS financial
measure. We believe that GMS is a useful revenue measure because the
exclusion of incentives and credits provides a picture that is more indicative of
future revenue.
Adjusted gross profit and adjusted gross margin measure gross profit and gross
margin on a retail value basis. Adjusted gross profit is calculated by subtracting
the cost of goods sold from GMS. Adjusted gross margin is expressed in
percentage terms and calculated as adjusted gross profit divided by GMS.
Adjusted gross profit and adjusted gross margin are non-IFRS financial measures.
We believe that adjusted gross profit and adjusted gross margin are useful
measures of financial performance because GMS is indicative of future revenues
and therefore, of future gross profit and gross margin.
EBITDA is defined as net income or loss before net finance expenses (income),
depreciation and amortization expense and income tax expense. Adjusted
EBITDA is defined as EBITDA excluding share-based payments as they are an
equity compensation item and other items that we believe do not necessarily arise
as part of the Company’s normal day-to-day operations and could distort the
analysis of trends in business performance. Adjusted EBITDA margin is defined
as adjusted EBITDA divided by revenue. EBITDA, adjusted EBITDA, and adjusted
EBITDA margin are non-IFRS financial measures. We believe that EBITDA,
adjusted EBITDA, and adjusted EBITDA margin are useful measures of financial
performance because these measures are useful to assess the Company’s ability
to seize growth opportunities in a cost-effective manner, to finance its ongoing
operations and to service its long-term debt. They also allow comparisons
between companies with different capital structures.
19 | P a g e
Goodfood Market Corp.
ACTIVE SUBSCRIBERS
Active subscribers, beginning of period
Net change in active subscribers
Active subscribers, end of period
Management’s Discussion and Analysis
Year ended August 31, 2019
Three-month periods
ended August 31,
Years ended
August 31,
2019
189,000
11,000
200,000
2018
76,000
13,000
89,000
2019
89,000
111,000
200,000
2018
31,000
58,000
89,000
GROSS MERCHANDISE SALES
The reconciliation of revenue to GMS is as follows:
Three-month periods
ended August 31,
Years ended
August 31,
(In thousands of Canadian dollars)
2019
2018
2019
2018
Revenue
$ 45,259
$
21,371
$ 161,333
$ 70,502
Credits removed from cancelled accounts
-
-
(638)
-
Incentives and credits
10,718
4,441
40,135
13,591
Gross merchandise sales
$ 55,977
$
25,812
$ 200,830
$ 84,093
For the three-month period and year ended August 31, 2019, GMS increased by $30.2 million and
$116.7 million, respectively, surpassing the $200 million mark for the year. The increase in GMS was
primarily driven by the continued growth in the number of active subscribers, the expansion of the national
platform reaching new geographies in Canada, and increase in our product offering, including the launch
of breakfast and ready-to-eat meal solutions, as well as planned strategic marketing activities.
ADJUSTED GROSS PROFIT AND ADJUSTED GROSS MARGIN
The reconciliation of adjusted gross profit and adjusted gross margin is as follows:
Three-month periods
ended August 31,
Years ended
August 31,
(In thousands of Canadian dollars)
2019
2018
2019
2018
Gross merchandise sales
$ 55,977
$ 25,812
$ 200,830
$ 84,093
Cost of goods sold
Adjusted gross profit
Adjusted gross margin
33,182
16,778
121,023
55,842
$ 22,795
$
9,034
$
79,807
$ 28,251
40.7%
35.0%
39.7%
33.6%
For the three-month period and year ended August 31, 2019, the adjusted gross margin improved by
5.7 percentage points and 6.1 percentage points, respectively. The increase in the adjusted gross margin
resulted primarily from lower production labour costs as a percentage of GMS driven by continued
investments in automation, lower unit costs with regards to packaging and shipping due to additional
operational efficiencies, increased density among the delivery zones, and purchasing power with key
suppliers. Food cost as a percentage of GMS has remained stable throughout the year driven by a strategy
adopted by the Company, as Goodfood is trying to increase the value proposition to members in order to
grow its subscriber base and revenue.
20 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
For the three-month period and year ended August 31, 2019, as a result of early adopting IFRS 16, adjusted
gross profit and adjusted gross margin were
0.4 percentage points, and $536 thousand and 0.3 percentage points, respectively.
impacted by $209
favourably
thousand and
EBITDA, ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN
The reconciliation of net loss to EBITDA, adjusted EBITDA and then to adjusted EBITDA margin is as
follows:
(In thousands of Canadian dollars)
Three-month periods
ended August 31,
2018
2019
Years ended
August 31,
2018
2019
Net loss
$
(5,887)
$
(2,956) $
(20,937)
$
(9,434)
Net finance expenses (income)
Depreciation and amortization expense
81
874
(50)
202
346
2,617
(98)
461
EBITDA
$
(4,932)
$
(2,804) $
(17,974)
$
(9,071)
Loss on disposal of fixed assets
Share-based payments
-
541
-
158
-
1,810
113
458
Adjusted EBITDA
Revenue
$
$
(4,391)
45,259
$
$
(2,646) $
(16,164)
$
(8,500)
21,371 $
161,333
$ 70,502
Adjusted EBITDA margin (%)
(9.7%)
(12.4%)
(10.0%)
(12.1%)
For the three-month period and year ended August 31, 2019, adjusted EBITDA margin improved by
2.7 percentage points and 2.1 percentage points, respectively. For the three-month period and year ended
August 31, 2019, the increase in adjusted EBITDA margin, resulted primarily from higher revenues and
operating leverage, lower production labour costs as a percentage of revenue, and lower unit costs with
regards to packaging and shipping which generated a higher gross profit, offset by an increase in selling,
general and administrative expenses.
EBITDA and adjusted EBITDA were also affected positively by $510 thousand and $1.4 million,
respectively, during the three-month period and year ended August 31, 2019, due to the early adoption of
IFRS 16. EBITDA, adjusted EBITDA, and adjusted EBITDA margin would have been ($5.4) million and
($19.4) million, ($4.9) million and ($17.6) million, and (10.8%) and (10.9%), respectively for the three-month
period and year ended August 31, 2019 without the early adoption of IFRS 16.
For the year ended August 31, 2018, adjusted EBITDA excludes the non-cash loss on the disposal of fixed
assets as we believe this item does not reflect the performance of the underlying business of the Company.
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Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
RESULTS OF OPERATIONS – FISCAL 2019 AND 2018
The following table sets forth the components of the Company’s Consolidated Annual Audited Statement
of Loss and Comprehensive Loss for the years ended August 31, 2019 and 2018:
(In thousands of Canadian
dollars, except share
information)
AS REPORTED
YEARS ENDED
AUGUST 31,
Variance
AMOUNT WITHOUT IFRS 16
YEARS ENDED
AUGUST 31,
Variance
2019
2018
($) (1)
(%) (2)
2019
2018
($) (1)
(%) (2)
Revenue
$ 161,333 $ 70,502 $ 90,831 129% $ 161,333 $ 70,502 $ 90,831 129%
Cost of goods sold
121,023 55,842
(65,181) 117% 121,559
55,842
(65,717) 118%
Gross profit
$
40,310 $ 14,660 $ 25,650
175% $ 39,774 $ 14,660 $ 25,114 171%
Gross margin (3)
Selling, general and
administrative expenses
Depreciation and amortization
$
25.0%
20.8%
N/A
N/A
24.7%
20.8%
N/A
N/A
58,284 $ 23,618 $(34,666) 147% $ 59,171 $ 23,618 $ (35,553) 151%
expenses
2,617
461
(2,156) 468%
1,276
Loss on disposal of fixed assets
Net finance expenses (income)
Net loss, being
-
346
113
(98)
113 100%
-
(444) 453%
(286)
461
113
(98)
(815)
177%
113 100%
188 192%
comprehensive loss
Basic and diluted net loss
$ (20,937) $ (9,434) $(11,503) 122% $ (20,387) $ (9,434) $ (10,953) 116%
per share
$
(0.38) $
(0.19) $
(0.19) 100% $
(0.37) $
(0.19) $
(0.18)
95%
(1) A positive variance represents a reduction to net loss and a negative variance represents an increase in net loss.
(2) Percentage change is presented in absolute values.
(3) Gross margin is calculated as gross profit divided by revenue and is expressed in percentage terms.
EXPLANATION OF VARIANCES FOR REPORTED AMOUNTS FOR FISCAL 2019 COMPARED TO
2018
The increase in revenue was primarily driven by the continued growth in the number of active
subscribers, the expansion of the national platform to reach new geographies in Canada and the
increase in our product offering, including the launch of breakfast and ready-to-eat meal solutions.
The increase in gross profit was primarily driven by the increase in revenue and to a higher gross
margin.
While the Company’s early adoption of IFRS 16 had a positive impact of 0.3% on gross margin, the
increase in gross margin primarily resulted from lower production costs as a percentage of revenue,
lower unit costs for packaging and shipping due to increased operational efficiencies, additional
automation investments, increased density among the delivery zones and purchasing power with key
suppliers. This was partially offset by an increase in incentives and credits included in revenue primarily
driven by the increase in active subscribers, the expansion of our national platform, the increase in our
product offering, including the launch of breakfast and ready-to-eat meal solutions and planned
strategic marketing activities. The Company expects that fixed costs as a percentage of revenues will
continue to decrease with the Company’s continued growth which should further increase gross margin
in the future.
22 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
The increase in selling, general and administrative expenses is primarily due to planned strategic
increases in marketing costs based on successful client acquisition strategies and higher wage costs
due to the addition of administrative personnel to support the Company’s growth and increase in our
product offering, partially offset by the classification of rent expense associated with leases previously
classified as operating leases under IAS 17 as depreciation and interest expense pursuant to the
Company’s early adoption of IFRS 16.
The increase in depreciation and amortization expenses resulted from the acquisition of fixed assets
across all asset classes, mainly for the expansion of production facilities, investments in automation,
and from the recognition of right-of-use assets recognized pursuant to the Company’s early adoption
of IFRS 16.
The decrease in loss on disposal of fixed assets resulted from the disposal of fixed assets that occurred
in Fiscal 2018. No other disposals of fixed assets have occurred during Fiscal 2019.
The increase in net finance expenses (income) resulted primarily from the interest expense on lease
obligations associated with the recognition of lease obligations pursuant to the Company’s early
adoption of IFRS 16, effective September 1, 2018, partially offset by higher interest income earned due
to increased interest rates and cash position provided by operating and financing activities.
The increase in net loss is mainly attributable to higher selling, general and administrative expenses
and depreciation and amortization expenses, offset by higher gross profit.
RESULTS OF OPERATIONS – THREE-MONTH PERIODS ENDED AUGUST 31, 2019 AND 2018
The following table sets forth the components of the Company’s Consolidated Statement of Loss and
Comprehensive Loss for the three-month periods ended August 31, 2019 and 2018:
(In thousands of Canadian
dollars, except share
information)
AS REPORTED
THREE-MONTH PERIODS ENDED
AUGUST 31,
AMOUNT WITHOUT IFRS 16
THREE-MONTH PERIODS ENDED
AUGUST 31,
Variance
Variance
2019
2018
($) (1)
(%) (2)
2019
2018
($) (1)
(%) (2)
Revenue
$ 45,259 $ 21,371 $ 23,888 112% $ 45,259 $ 21,371 $ 23,888 112%
Cost of goods sold
33,182
16,778
(16,404)
98%
33,391
16,778
(16,613)
99%
Gross profit
$ 12,077 $
4,593 $
7,484 163% $ 11,868 $ 4,593 $ 7,275 158%
Gross margin (3)
Selling, general and
administrative expenses
Depreciation and amortization
expenses
Net finance expenses (income)
Net loss, being
comprehensive loss
Basic and diluted net loss
26.7%
21.5%
N/A
N/A
26.2%
21.5%
N/A N/A
$ 17,009 $
7,397 $ (9,612) 130% $ 17,310 $ 7,397 $ (9,913) 134%
874
81
202
(50)
(672) 333%
(131) 262%
464
(91)
202
(50)
(262) 130%
41
82%
$ (5,887) $ (2,956) $ (2,931)
99% $ (5,815) $ (2,956) $ (2,859)
97%
per share
$
(0.10) $
(0.06) $
(0.04)
67% $
(0.10) $
(0.06) $ (0.04)
67%
(1) A positive variance represents a reduction to net loss and a negative variance represents an increase in net loss.
(2) Percentage change is presented in absolute values.
(3) Gross margin is calculated as gross profit divided by revenue and is expressed in percentage terms.
23 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
EXPLANATION OF VARIANCES FOR REPORTED AMOUNTS FOR THE THREE-MONTH PERIOD
ENDED AUGUST 31, 2019 COMPARED TO 2018
The increase in revenue was primarily driven by the continued growth in the number of active
subscribers, the expansion of the national platform to reach new geographies in Canada and the
increase in our product offering, including the launch of breakfast and ready-to-eat meal solutions.
The increase in gross profit was primarily driven by the increase in revenue and to a higher gross
margin.
While the Company’s early adoption of IFRS 16 had a positive impact of 0.5% on gross margin, the
increase in gross margin primarily resulted from lower production costs as a percentage of revenue,
lower unit costs for packaging and shipping due to increased operational efficiencies, additional
automation investments, increased density among the delivery zones and purchasing power with key
suppliers. This was partially offset by an increase in incentives and credits included in revenue primarily
driven by the increase in active subscribers, the expansion of our national platform, the increase in our
product offering, including the launch of breakfast and ready-to-eat meal solutions and planned
strategic marketing activities. The Company expects that fixed costs as a percentage of revenues will
continue to decrease with the Company’s continued growth which should further increase gross margin
in the future.
The increase in selling, general and administrative expenses is primarily due to planned strategic
increases in marketing costs based on successful client acquisition strategies and higher wage costs
due to the addition of administrative personnel to support the Company’s growth and increase in
product offering, partially offset by the classification of rent expense associated with leases previously
classified as operating leases under IAS 17 as depreciation and interest expense pursuant to the
Company’s early adoption of IFRS 16.
The increase in depreciation and amortization expenses resulted from the acquisition of fixed assets
across all asset classes, mainly for the expansion of production facilities, investments in automation,
and from the recognition of right-of-use assets recognized pursuant to the Company’s early adoption
of IFRS 16.
The increase in net finance expenses (income) resulted primarily from the interest expense on lease
obligations associated with the recognition of lease obligations pursuant to the Company’s early
adoption of IFRS 16 partially offset by higher interest income earned due to increased interest rates
and cash position provided by operating and financing activities.
The increase in net loss is mainly attributable to higher selling, general and administrative expenses
and depreciation and amortization expenses, offset by higher gross profit.
24 | P a g e
Goodfood Market Corp.
FINANCIAL POSITION
Management’s Discussion and Analysis
Year ended August 31, 2019
The following table provides an analysis of the variances in the Company’s Consolidated Annual Audited
Statement of Financial Position as at August 31, 2019 compared to August 31, 2018:
(In thousands of Canadian
dollars)
Total Assets
Variance mainly due to:
August 31,
2019
AS REPORTED
August 31,
2018 Variance
2018 Variance
AMOUNT WITHOUT IFRS 16
August 31,
August 31,
2019
$ 80,783
$ 34,309 $ 46,474
$ 70,212
$ 34,309 $ 35,903
Cash and cash equivalents
45,149
24,453
20,696
45,149
24,453
20,696
Inventories
Restricted cash
Fixed assets
Right-of-use-assets
Total Liabilities
Variance mainly due to:
Line of credit
Accounts payable and accrued
4,735
2,500
13,545
11,089
1,585
-
6,006
3,150
2,500
7,539
4,735
2,500
1,585
-
14,053
6,006
-
11,089
-
-
3,150
2,500
8,047
-
$ 63,382
$ 17,853 $ 45,529
$ 52,261
$ 17,853 $ 34,408
1,540
500
1,040
1,540
500
1,040
liabilities
30,704
11,343
19,361
30,704
11,343
19,361
Deferred revenue
Long-term debt, including
current portion
Lease obligations, including
current portion
Total Shareholders’ Equity
Variance mainly due to:
5,923
2,522
3,401
5,923
2,522
3,401
12,491
2,092
10,399
12,787
2,092
10,695
12,724
-
12,724
-
-
-
$ 17,401
$ 16,456 $
945
$ 17,951
$ 16,456 $
1,495
Common shares
56,598
36,283
20,315
56,598
36,283
20,315
Deficit
(41,546)
(20,609)
(20,937)
(40,996)
(20,609)
(20,387)
EXPLANATION OF VARIANCES FOR REPORTED AMOUNTS FROM AUGUST 31, 2018 TO
AUGUST 31, 2019
The increase in cash and cash equivalents is the result of increased net cash provided by operating
and financing activities as cash flow from operations contributed $880 thousand, in addition to the equity
and debt financing transactions completed during this fiscal year.
The increase in inventories is due to the Company’s growth, where the increase in food inventory and
packaging inventory generally follows weekly and monthly revenue trends, respectively.
The increase in restricted cash is the result of a covenant from the August 2019 debt financing where
the bank amended the existing financing agreement to provide the Company with $12 million in further
term loans, revolving line of credit and other short-term financing but required a cash collateral account
of $2.5 million.
The increase in fixed assets is primarily due to investments in the capacity expansions and automation
of the Company’s production facilities in order to increase production capacity.
The increase in right-of-use assets and lease obligations reflects the Company’s early adoption of
IFRS 16.
25 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
The increase in accounts payable and accrued liabilities is primarily due to higher purchases resulting
from the Company’s growth, increase in the Company’s corporate credit cards limits and more
favourable payment terms as a result of increased purchasing power with key suppliers as the
Company increases its scale.
The increase in deferred revenue is due to Company’s growth and to the timing of period-end within
the Company’s weekly delivery cycle.
The increase in long-term debt resulted from the secured financing closed in November 2018, where
the Company obtained a commitment from a leading Canadian financial institution for a $10 million
three-year term loan, a $2.5 million revolving line of credit and other short-term financing with favourable
repayment terms. In August 2019, the Company obtained a commitment from the same Canadian
financial institution to an additional secured term loan of $2.5 million, bearing the same terms as the
agreement signed in November 2018, which further explains the increase in long-term debt. The
Canadian financial institution also increased the amount of the revolving line of credit from $2.5 million
to $10 million. As at August 31, 2019, $10 million and $2.5 million of the term loans were disbursed,
respectively, and the proceeds were used to fund expansion capital expenditures, invest in automation,
and refinance the Company’s long-term debt.
The increase in common shares is mainly due to the public offering completed on February 22, 2019,
where 6,019,212 commons shares were issued for gross proceeds of $21.1 million, less share issuance
costs of $1.5 million. In addition, a portion of the agent compensation options granted in connection
with the private placement completed in June 2017 was exercised during the third quarter of Fiscal
2019 resulting in the issuance of 299,064 common shares for gross proceeds of $598 thousand.
The increase in deficit is due to the net loss incurred for Fiscal 2019.
LIQUIDITY AND CAPITAL RESOURCES
CAPITAL MANAGEMENT
The Company’s objective in managing its capital is to ensure sufficient liquidity position to finance its
operations, to maximize the preservation of capital and deliver competitive returns on invested capital. To
fund its activities, the Company has relied on public and private placements, convertible notes and
short-term and long-term senior debt, which are included in the Company’s definition of capital. The
Company manages its excess cash such that it has sufficient reserve to fund its operations and capital
expenditures.
CASH FLOWS
A summary of net cash flows by activity for years ended August 31, 2019 and 2018 is presented below:
(In thousands of Canadian dollars)
Years ended August 31,
2018
2019
Variance
Net cash provided by operating activities
$
880
$
176
$
704
Net cash provided by financing activities
Net cash used in investing activities
29,555
(7,239)
10,901
(4,171)
18,654
(3,068)
Net change in cash and cash equivalents
$ 23,196
$
6,906
$ 16,290
Cash and cash equivalents, beginning of period
Cash and cash equivalents and restricted cash,
24,453
17,547
6,906
end of period
$ 47,649
$ 24,453
$ 23,196
26 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
The positive variance in net cash provided by operating activities is due to a favorable change in non-cash
operating working capital, mostly driven by the Company’s growth and more favourable payment terms with
key suppliers, and to a lesser extent, the classification of lease payments under IFRS 16 of $1.8 million as
financing activities instead of as operating activities ($641 thousand for the year ended August 31, 2018),
partially offset by a higher net loss.
The positive variance in net cash provided by financing activities is primarily due to the issuance of
$21.1 million of common shares and $12.5 million in proceeds from issuance of long-term debt during
Fiscal 2019, partially offset by the issuance of $10 million of common shares and $2.5 million in proceeds
from issuance of long-term debt during Fiscal 2018.
The negative variance in net cash used in investing activities is primarily due to the increase in capital
expenditures in Fiscal 2019 relating to investments in automation and the expansion of production facilities
in order to increase operational efficiencies and production capacity.
A summary of net cash flows by activity for the three-month periods ended August 31, 2019 and 2018 is
presented below:
(In thousands of Canadian dollars)
Three-month periods ended August 31,
2018
2019
Variance
Net cash (used in) provided by operating activities
$ (2,710)
$
939
$ (3,649)
Net cash provided by (used in) financing activities
Net cash used in investing activities
3,307
(2,661)
(175)
(298)
3,482
(2,363)
Net change in cash and cash equivalents
$ (2,064)
$
466
$ (2,530)
Cash and cash equivalents, beginning of period
Cash and cash equivalents and restricted cash,
49,713
23,987
25,726
end of period
$ 47,649
$ 24,453
$ 23,196
The negative variance in net cash provided by operating activities is primarily due to a higher net loss, a
less favorable change in non-cash operating working capital and a $1 million tenant allowance that
reimbursed a significant portion of the capital expenditures for the production facility in Alberta, Canada
received in the fourth quarter of Fiscal 2018, partially offset by the classification of lease payments under
IFRS 16 of $580 thousand as financing activities instead of as operating activities ($228 thousand for the
three-month period ended August 31, 2018).
The positive variance in net cash provided by financing activities is primarily due to proceeds received from
the $2.5 million term loan disbursement and the $1 million disbursement from the revolving line of credit in
August 2019.
The negative variance in net cash used in investing activities is primarily due to the higher capital
expenditures in the fourth quarter of Fiscal 2019 relating to investments in automation and the expansion
of production facilities in order to increase operational efficiencies and production capacity.
CREDIT FACILITY
Significant financing transactions that took place in Fiscal 2019 were as follows:
In November 2018, the Company obtained, from a leading Canadian financial institution, a secured
three-year term loan of $10 million, a $2.5 million revolving line of credit and $1 million in other
short-term financing. The credit facility is secured by a first-ranking hypothec on all of the Company’s
movable and immovable assets.
27 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
In April 2019, the Canadian financial institution increased the amount in other short-term financing from
$1 million to $3 million.
In August 2019, the Company obtained, from the same Canadian financial institution, an additional
secured term loan of $2.5 million, bearing the same terms as the commitment made in November 2018.
The Canadian financial institution also increased the amount of the revolving line of credit from
$2.5 million to $10 million and the amount of other short-term financing from $3 million to $5 million.
As at August 31, 2019, $10 million and $2.5 million of the term loans were disbursed, respectively, as
well as $1.5 million of the revolving line of credit, bearing variable interest at CDOR plus 2.50% (4.46%
as at August 31, 2019). The proceeds were used to fund the expansion of capital expenditures, invest
in automation, and refinance the Company’s long-term debt. The term loan is repayable in quarterly
installments of $125 thousand and $31 thousand, beginning on December 4, 2020 and August 31,
2020, respectively, with a bullet repayment of the balance at the end of the term in November 2021.
In March 2019, the Company signed two interest rate swap agreements with the same leading
Canadian financial institution. With these agreements, the Company effectively fixed the interest rate
on notional amounts of $2.5 million and $1.3 million, at a rate 4.72% and 4.57%, respectively, of the
Company’s long-term debt until maturity in November 2021.
As at August 31, 2019, the Company has corporate credit cards used for business purposes with
authorised limits totaling $7.9 million. Amounts owing with respect to credit cards are included in
accounts payable and accrued liabilities.
The credit facility includes a collateral requirement of $2.5 million placed in a restricted cash account
and financial covenants with which the Company was in compliance as at August 31, 2019.
CONTRACTUAL OBLIGATIONS
The following are amounts due on contractual maturities of financial liabilities, including estimated interest
payments, as well as commitments with respect to leases as at August 31, 2019:
(In thousands of Canadian dollars)
Total
Less than 1
year
1 to 5
years
More than 5
years
Line of credit
$
1,540
$
1,540
$
Accounts payable and accrued liabilities
30,704
30,704
Long-term debt, including current portion
13,755
597
Leases (1) (2)
15,868
1,874
-
-
13,158
7,050
$
-
-
-
6,944
$ 61,867
$ 34,715
$ 20,208
$ 6,944
(1) As at August 31, 2019, future lease payments of $5.6 million for which the Company is reasonably
certain to exercise the renewal options have been recognized in lease obligations included in the
Consolidated Annual Audited Statement of Financial Position as at August 31, 2019, representing an
amount of $6.4 million of undiscounted cash flows.
(2) With the exception of future cash flows associated with the British Columbia facility described in the
“Fiscal 2019 Highlights” section of this MD&A, there are no future cash outflows related to lease
agreements to which the Company is potentially exposed that are not reflected in the measurement of
lease obligations.
28 | P a g e
Goodfood Market Corp.
COMMON SHARES
Management’s Discussion and Analysis
Year ended August 31, 2019
In connection with the public offering completed on February 22, 2019, the Company issued
6,019,212 common shares (of which 26,500 common shares were purchased by Board members and key
management personnel) at a price of $3.50 per share for gross proceeds of $21.1 million, less share
issuance costs of $1.5 million. Refer to the “Use of Proceeds from Public Offerings” section of this MD&A
for information on use of proceeds by the Company.
SELECTED QUARTERLY INFORMATION AND RECONCILIATION OF QUARTERLY NON-IFRS
MEASURES
The table below presents active subscribers, gross merchandise sales, revenue, net loss and basic and
diluted net loss per share for the last eight fiscal quarters:
Aug. 31,
2019 (1)
May 31,
2019 (1)
Feb. 28,
2019 (1)
Nov. 30,
2018 (1)
Aug. 31,
2018
May 31,
2018
Feb. 28,
2018
Nov. 30,
2017
Three-month periods ended
Active subscribers
200,000 189,000
159,000
126,000
89,000
76,000
61,000
45,000
(in thousands of Canadian dollars)
Gross merchandise
sales
$ 55,977 $ 61,212 $ 46,535 $ 37,105 $ 25,812 $ 26,166 $ 18,840 $ 13,275
Credits removed from
cancelled accounts
-
-
638
-
-
-
-
-
Incentives and credits
(10,718)
(11,348)
(10,580)
(7,488)
(4,441)
(3,943)
(3,167)
(2,039)
Revenue
45,259
49,864
36,593
29,617
21,371
22,223
15,673
11,236
Net loss
Basic and diluted net
loss per share (2)
(5,887)
(3,639)
(6,560)
(4,851)
(2,956)
(1,564)
(2,393)
(2,520)
(0.10)
(0.06)
(0.13)
(0.09)
(0.06)
(0.03)
(0.05)
(0.05)
(1) The transition to IFRS 16 had an impact on net loss and basic and diluted net loss per share. Refer to the related
sections of this MD&A for the impact of the transition to IFRS 16.
(2) The sum of Basic and diluted net loss per share on a quarterly basis may not equal basic and diluted net loss per
share on a year-to-date basis due to rounding.
TRENDS AND SEASONALITY
The Company’s revenues and expenses are affected by seasonality. During holiday and popular vacation
periods, the Company anticipates revenues to be lower as a higher proportion of active subscribers elect
to skip their delivery. The Company also anticipates the growth rate of active subscribers to be lower during
these periods. During periods with warmer weather, the Company anticipates packaging costs to be higher
due to the additional packaging required to maintain food freshness and quality. The Company also
anticipates food cost to be positively affected due to improved availability during periods with warmer
weather.
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Goodfood Market Corp.
FINANCIAL RISK MANAGEMENT
CREDIT RISK
Management’s Discussion and Analysis
Year ended August 31, 2019
Credit risk is the risk of an unexpected loss if a counterparty to a financial instrument fails to meet its
contractual obligation. The Company regularly monitors credit risk exposure and takes steps to mitigate the
likelihood of this exposure resulting in losses. The Company's exposure to credit risk is primarily attributable
to its cash and cash equivalents, amounts receivable included in other current assets, restricted cash, and
security deposits included in other assets. The Company's maximum credit exposure corresponds to the
carrying amount of these financial assets. Management believes the credit risk is limited because the
Company deals with major North American financial institutions and an internationally established payment
processor.
INTEREST RATE RISK
The Company’s long-term debt and revolving line of credit bear interest at variable rates which are
determined by a base rate set by the lender plus a margin. As a result, the Company is exposed to interest
rate risk due to fluctuations in lenders’ base rates. The Company manages its interest rate risk by using
variable-to-fixed interest rate swaps as described in the “Liquidity and Capital Resources” section of the
MD&A and in detail in Note 13 to its Consolidated Annual Audited Financial Statements for year ended
August 31, 2019.
LIQUIDITY RISK
Liquidity risk is the risk that the Company will be unable to fulfill its obligations on a timely basis or at a
reasonable cost. The Company manages its liquidity risk by monitoring its operating requirements. The
Company prepares budgets and short and long-term detailed cash forecasts to ensure it has sufficient
funds to fulfill its obligations.
For the fiscal year ending August 31, 2020, anticipated operating losses, as the Company continues to
grow its active subscriber base, and additional capital expenditures are expected to reduce the Company’s
cash balance and liquidity position compared to August 31, 2019, absent additional financing. We believe
that the Company’s cash on hand and financing capacity will provide adequate sources of funds to meet
short-term requirements, finance planned capital expenditures and fund any operating losses.
BUSINESS RISK
For a detailed discussion of the Company’s risk factors, please refer to the Company’s Annual Information
Form for the year ended August 31, 2019 available on SEDAR at www.sedar.com.
ADDITIONAL FINANCING REQUIREMENTS
As a result of realized and anticipated growth in the number of active subscribers, planned investment in
operations, logistics, automation and technology, new product development, as well as the potential for
continued operating losses, the Company may require additional financing in the future to realize the goals
outlined in the “Financial Outlook” section of this MD&A.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not currently have any off-balance sheet arrangements that have, or are reasonably
likely to have, a current or future effect on the Company’s financial condition, changes in revenue or
expenses, results of operations, liquidity, capital expenditures, or capital resources that are material, with
the exception of the new lease that was signed for the British Columbia, Canada production facility and is
described in the “Fiscal 2019 Highlights” section of this MD&A.
30 | P a g e
Goodfood Market Corp.
FINANCIAL INSTRUMENTS
INVESTMENT POLICY
Management’s Discussion and Analysis
Year ended August 31, 2019
The Company invests its excess cash with varying terms to maturity selected with regards to the expected
timing of investments or expenditures for continuing operations.
DERIVATIVES
The Company entered into two interest rate swap agreements during the year ended August 31, 2019, as
described in the “Liquidity and Capital Resources” section of the MD&A and in detail in Note 13 to the
Company’s Consolidated Annual Audited Financial Statements for year ended August 31, 2019.
FINANCIAL COVENANTS
As discussed in the “Liquidity and Capital Resources” section of the MD&A, the Company’s secured a credit
facility that includes financial covenants which may restrict the Company’s ability to pursue future
transactions or opportunities. As at August 31, 2019, the Company was in compliance with these financial
covenants.
RELATED PARTY TRANSACTIONS
The chief executive officer ("CEO") and the president and chief operating officer ("President and COO") are
controlling shareholders of the Company and are members of the Board of the Company. The CEO is also
Chairman of the Board.
During the year ended August 31, 2019, the Company had the following related party transaction:
On February 22, 2019, in connection with the public offering described in “Liquidity and Capital
Resources” section of this MD&A, 26,500 common shares were purchased by Board members and key
management personnel at a price of $3.50 per share.
This transaction is recorded at the amount of consideration paid as established and agreed to by the related
parties.
KEY MANAGEMENT PERSONNEL
Key management personnel includes the members of the Board as well as the CEO, COO and Chief
Financial Officer (“CFO”).
During the year ended August 31, 2019, the Company had the following transaction with key management
personnel:
The Company incurred an expense of $2.0 million with respect to short-term employee benefits paid to
key management personnel (including directors’ fees);
The Company incurred share-based payments of $1.1 million with respect to stock option awards
granted to key management personnel;
1,156,766 stock options were granted to key management personnel and members of the board.
OUTSTANDING SHARE DATA
As at August 31, 2019, the Company had 58,144,400 common shares issued and outstanding and
3,910,169 stock options outstanding. The basic weighted average number of common shares as at
August 31, 2019 was 55,069,384.
31 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
As at November 14, 2019, the Company had 58,144,400 common shares issued and outstanding and
3,976,697 stock options outstanding.
For additional information with respect to stock options, refer to Note 19 to the Company’s Consolidated
Annual Audited Financial Statements for the year ended August 31, 2019.
USE OF PROCEEDS FROM PUBLIC OFFERINGS
MAY 2018 PUBLIC OFFERING
On May 7, 2018, the Company completed a public offering and issued 4,000,000 common shares for net
proceeds of $9.1 million.
The following table compares the estimated use of proceeds presented in the Company's final short form
prospectus dated May 2, 2018 with the actual use of proceeds as at August 31, 2019:
(In thousands of Canadian dollars)
Actual Use of
proceeds
Estimated Use
of proceeds
Variance
Western Canada expansion
$
Process automation
Expansion of product offering and development of
new meal solutions
Working capital and general corporate purposes
Total net proceeds
Share issuance costs
Gross proceeds
FEBRUARY 2019 PUBLIC OFFERING
3,657
1,711
1,037
2,669
9,074
926
$
4,000
$ (343)
2,000
1,000
2,087
9,087
913
(289)
37
582
(13)
13
-
$
10,000
$ 10,000
$
On February 22, 2019, the Company completed a public offering and issued 6,019,212 common shares for
net proceeds of $19.6 million (including proceeds from over-allotment option).
The following table compares the estimated use of proceeds presented in the Company's final short form
prospectus dated February 18, 2019 with the actual use of proceeds as at August 31, 2019:
(In thousands of Canadian dollars)
Capital expenditures and process automation
Expansion of product offering and development of
new meal solutions
Implementation of reusable packaging initiatives
Working capital and general corporate purposes
Remaining as at August 31, 2019
Total net proceeds
Share issuance costs
Gross proceeds
Actual use of
proceeds
Estimated use
of proceeds (1)
Variance
$
4,311
$
10,000
$ (5,689)
2,246
83
4,065
8,865
19,570
1,497
5,000
500
4,065
N/A
19,565
1,502
$
21,067
$
21,067
$
(2,754)
(417)
-
8,865
5
(5)
-
(1)
Included in the estimated use of proceeds for Working capital and general corporate purposes is the
additional net proceeds from the exercise of the Treasury Over-Allotment Option.
32 | P a g e
Goodfood Market Corp.
SEGMENT REPORTING
Management’s Discussion and Analysis
Year ended August 31, 2019
The Company has one reportable segment as our principal business activity is focused on developing and
servicing the Canadian home meal solutions market.
DIVIDEND POLICY
Since its incorporation, the Company has not paid any dividend on its common shares. The Company’s
current policy is to retain future earnings to finance its growth. Any future determination to pay dividends is
at the discretion of the Company’s Board of Directors and will depend on the Company’s financial condition,
results of operations, capital requirements and other such factors as the Board of Directors of the Company
may deem relevant.
CRITICAL ACCOUNTING ESTIMATES
The preparation of the Consolidated Annual Audited Financial Statements in conformity with IFRS requires
management to make judgments, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, revenues and expenses. Actual results may differ
from these estimates.
The Company’s significant accounting estimates and assumptions for the year ended August 31, 2019,
include the estimation of the redemption percentage for sales and referral credits included in deferred
revenue and the recoverability of deferred income taxes. The Company uses judgment in determining the
date at which fixed assets are available for their intended use. The significant accounting judgements and
estimates are disclosed in Note 4 of its Consolidated Annual Audited Financial Statements for the year
ended August 31, 2019.
ADOPTION OF NEW ACCOUNTING STANDARDS
IFRS 16
Effective September 1, 2018, the Company early adopted IFRS 16, Leases, using the modified
retrospective approach. Accordingly, comparative figures as at and for the year ended August 31, 2018 and
the three-month period and year ended August 31, 2018, have not been restated and continue to be
reported under IAS 17, Leases (“IAS 17”) and IFRIC 4, Determining Whether an Arrangement Contains a
Lease.
IFRS 16 specifies how to recognize, measure, present and disclose leases. The standard introduces a
single lessee accounting model and requires a lessee to recognize a right-of-use asset representing its
right to use the underlying asset and a lease liability representing its obligation to make lease payments.
For information with regards to the Company’s specific application of IFRS 16 and the impact of this
transition, refer to Note 5 to the Company’s Consolidated Annual Audited Financial Statements for the year
ended August 31, 2019.
IFRS 15
Effective September 1, 2018, the Company adopted IFRS 15, Revenue from Contracts with Customers,
using the cumulative effect method, with the effect of adopting this standard recognized on September 1,
2018, the date of initial application. Accordingly, comparative figures as at August 31, 2018, and for the
three-month period and year ended August 31, 2018, have not been restated.
33 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
IFRS 15 replaces IAS 11, Construction Contracts, IAS 18, Revenue, IFRIC 13, Customer Loyalty
Programmes, IFRIC 15, Agreements for the Construction of Real Estate, IFRIC 18, Transfer of Assets from
Customers, and SIC 31, Revenue - Barter Transactions Involving Advertising Services. The standard
contains a single model that applies to contracts with customers and two approaches to recognizing
revenue: at a point in time or over time. The model features a contract-based five-step analysis of
transactions to determine whether, how much and when revenue is recognized. Under IFRS 15, revenue
is recognized when a customer obtains control of the goods and services. Determining the timing of the
transfer of control, at a point in time or over time, requires judgment.
The Company generates revenue from the sale of meal solutions. IFRS 15 did not have an impact on the
Company’s accounting policies for revenue recognition since, under both IFRS 15 and previous standards,
the Company recognizes revenue upon delivery of the meal solutions.
For information with regards to the Company’s specific application of IFRS 15 and the impact of this
transition, refer to Note 5 to the Company’s Consolidated Annual Audited Financial Statements for the year
ended August 31, 2019.
IFRS 9
Effective September 1, 2018, the Company adopted IFRS 9, Financial Instruments.
IFRS 9 sets out requirements for recognition and measurement, impairment, derecognition and general
hedge accounting. The standard simplifies the classification of a financial asset as either at amortized cost
or at fair value and requires the use of a single impairment method. The approach is based on how an entity
manages financial instruments in the context of its business model and the contractual cash flow
characteristics of financial assets. The standard also adds guidance on the classification and measurement
of financial liabilities.
The Company’s cash and cash equivalents, security deposits and amounts receivable, previously classified
as loans and receivables under IAS 39, are classified as financial assets subsequently measured at
amortized cost under IFRS 9. There is thus no change to the initial measurement of the Company’s financial
assets.
The Company’s accounts payable and accrued liabilities, and long-term debt, previously classified as other
financial liabilities under IAS 39, are classified as financial liabilities subsequently measured at amortized
cost under IFRS 9. There is thus no change in the initial measurement of the Company’s financial liabilities.
There was no impact of transition to IFRS 9 on the Company’s Statement of Financial Position as at
September 1, 2018.
For information with regards to the Company’s specific application of IFRS 9 and the impact of this
transition, refer to Note 5 to the Company’s Consolidated Annual Audited Financial Statements for the year
ended August 31, 2019.
STANDARDS ISSUED BUT NOT YET EFFECTIVE
Please refer to Note 26 of the Company’s Consolidated Annual Audited Financial Statements for the year
ended August 31, 2019. The amended standards and interpretations are not expected to have a significant
impact on the Company’s Consolidated Annual Audited Financial Statements.
34 | P a g e
Goodfood Market Corp.
Management’s Discussion and Analysis
Year ended August 31, 2019
DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL
REPORTING
In accordance with National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim
Filings, the Company has filed certificates signed by the Chief Executive Officer and the Chief Financial
Officer (“Certifying Officers”) that, among other things, report on the design and effectiveness of disclosure
controls and procedures (“DC&P”) and the design and effectiveness of internal control over financial
reporting.
DISCLOSURE CONTROLS AND PROCEDURES
The Company has designed DC&P to provide reasonable assurance that material information relating to
the Company is made known to the Certifying Officers, particularly during the period in which the annual
filings are being prepared, and that information required to be disclosed to satisfy the Company’s
continuous disclosure obligations is recorded, processed, summarized and reported within the time periods
specified by applicable Canadian securities legislation.
Management, under the supervision of the Certifying Officers, has evaluated the effectiveness of the DC&P
and based on that evaluation, the Certifying Officers have concluded that the DC&P were effective as at
August 31, 2019.
INTERNAL CONTROLS OVER FINANCIAL REPORTING (“ICFR”)
The Certifying Officers have designed ICFR or have caused them to be designed under their supervision,
in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with IFRS. In designing and evaluating internal
controls, it should be recognized that due to inherent limitations, any controls, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired control objectives and may
not prevent or detect misstatements.
The control framework used to design the Company’s ICFR is based on the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) on Internal Control –
Integrated Framework (2013 framework).
In addition, management, under the supervision of the Certifying Officers, has evaluated the effectiveness
of ICFR and based on that evaluation, the Certifying Officers have concluded that the Company`s ICFR
was effective as at August 31, 2019.
No changes were made to the Company’s ICFR that have materially affected, or are reasonably likely to
materially affect, the Company’s ICFR.
35 | P a g e
CONSOLIDATED FINANCIAL STATEMEN TS
GOODFOOD
MARKET CORP.
YEARS ENDED AUGUST 31, 2019 AND 2018
GOODFOOD MARKET CORP.
Table of Contents
Independent Auditors’ Report
Consolidated Financial Statements
Consolidated Statements of Financial Position
Consolidated Statements of Loss and Comprehensive Loss
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Page
42
43
44
45
46 - 72
KPMG LLP
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Suite 1500, Tour KPMG
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Canada
Telephone
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(514) 840-2100
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www.kpmg.ca
INDEPENDENT AUDITORS' REPORT
To the Shareholders of Goodfood Market Corp.
Opinion
We have audited the consolidated financial statements of Goodfood Market Corp. (the "Entity"), which
comprise:
•
•
•
•
the consolidated statements of financial position as at August 31, 2019 and 2018;
the consolidated statements of loss and comprehensive loss for the years then ended;
the consolidated statements of changes in equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
• notes to the consolidated financial statements, including a summary of significant accounting
policies.
(Hereinafter referred to as the "financial statements").
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Entity as at August 31, 2019 and 2018, and its
consolidated financial performance and its consolidated cash flows for the years then ended in
accordance with International Financial Reporting Standards ("IFRS").
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the "Auditors’ Responsibilities for the
Audit of the Financial Statements" section of our auditors’ report.
We are independent of the Entity in accordance with the ethical requirements that are relevant to our
audit of the financial statements in Canada and we have fulfilled our other responsibilities in accordance
with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG International Cooperative
("KPMG International"), a Swiss entity.
KPMG Canada provides services to KPMG LLP.
Page 2
Other Information
Management is responsible for the other information. Other information comprises:
•
•
the information included in Management’s Discussion and Analysis filed with the relevant Canadian
Securities Commissions;
the information, other than the financial statements and the auditors’ report thereon, included in a
document likely to be entitled "Annual Report".
Our opinion on the financial statements does not cover the other information and we do not and will not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit and remain alert for indications that the
other information appears to be materially misstated.
We obtained the information included in Management’s Discussion and Analysis filed with the relevant
Canadian Securities Commissions and the Annual Report as at the date of this auditors’ report. If,
based on the work we have performed on this other information, we conclude that there is a material
misstatement of this other information, we are required to report that fact in the auditors’ report.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with International Financial Reporting Standards (IFRS), and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Entity’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the
going concern basis of accounting unless management either intends to liquidate the Entity or to cease
operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Canadian generally accepted auditing standards will always detect a material
misstatement when it exists.
Page 3
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit.
We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Entity's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Entity's ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’
report to the related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditors’ report. However, future events or conditions may cause the Entity to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• Communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
• Provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
Page 4
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the group entity to express an opinion on the financial statements. We
are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
The engagement partner on the audit resulting in this auditors’ report is Alain Bessette.
Montréal, Canada
November 13, 2019
*CPA auditor, CA, public accountancy permit No. A115894
GOODFOOD MARKET CORP.
Consolidated Statements of Financial Position
August 31, 2019 and 2018
(In thousands of Canadian dollars)
Notes
2019
2018
Assets
Current assets:
Cash and cash equivalents
Sales tax receivable
Inventories
Other current assets
Non-current assets:
Restricted cash
Fixed assets
Right-of-use assets
Intangible assets
Other non-current assets
Liabilities and Shareholders’ Equity
Current liabilities:
Line of credit
Accounts payable and accrued liabilities
Deferred revenue
Current portion of long-term debt
Current portion of lease obligations
Non-current liabilities:
Long-term debt
Lease obligations
Other non-current liabilities
Shareholders’ equity:
Common shares
Contributed surplus
Deficit
6
7
13
8
9
10
11
13
12
13
14
13
14
5
15
See accompanying notes to the consolidated financial statements.
On behalf of the Board:
______________________ Director
______________________ Director
$ 45,149
2,012
4,735
839
52,735
2,500
13,545
11,089
512
402
$
24,453
1,657
1,585
204
27,899
–
6,006
–
55
349
$ 80,783
$
34,309
$
1,540
30,704
5,923
31
1,273
39,471
12,460
11,451
–
63,382
56,598
2,349
(41,546)
17,401
$
500
11,343
2,522
528
–
14,893
1,564
–
1,396
17,853
36,283
782
(20,609)
16,456
$ 80,783
$
34,309
42 | P a g e
GOODFOOD MARKET CORP.
Consolidated Statements of Loss and Comprehensive Loss
Years ended August 31, 2019 and 2018
(In thousands of Canadian dollars, except share information)
Notes
2019
2018
Revenue
Cost of goods sold
Gross profit
Expenses:
Selling, general and administrative
Depreciation and amortization
Loss on disposal of fixed assets
Net finance expenses (income)
16
$ 161,333
121,023
$ 70,502
55,842
40,310
14,660
58,284
2,617
–
60,901
346
23,618
461
113
24,192
(98)
Net loss, being comprehensive loss for the period
$
(20,937)
$
(9,434)
Basic and diluted loss per share
17
$
(0.38)
$
(0.19)
See accompanying notes to the consolidated financial statements.
43 | P a g e
GOODFOOD MARKET CORP.
Consolidated Statements of Changes in Equity
Years ended August 31, 2019 and 2018
(In thousands of Canadian dollars, except share information)
Common Shares
Contributed
Notes
Number
Amount
Surplus
Deficit
Total
Balance as at August 31, 2017
47,753,832
$ 27,144
$
382 $ (11,175) $ 16,351
Net loss
Share issuance
Share issuance costs
Share-based payments
Stock options exercised
15
15
19
19
–
4,000,000
–
–
71,413
–
10,000
(926)
–
65
–
–
–
458
(58)
(9,434)
–
–
–
–
(9,434)
10,000
(926)
458
7
Balance as at August 31, 2018
51,825,245 $ 36,283
$
782 $ (20,609) $ 16,456
Net loss
Share issuance
Share issuance costs
Share-based payments
Stock options exercised
Stock options settled in
cash
Exercise of agent
15
15
19
19
19
– $
6,019,212
–
–
879
–
21,067
(1,497)
–
5
$
– $ (20,937) $ (20,937)
21,067
–
–
(1,497)
–
–
1,810
–
1,810
3
–
(2)
compensation options
15
299,064
740
(142)
–
–
(99)
–
–
(99)
598
Balance as at August 31, 2019
58,144,400 $ 56,598
$ 2,349 $ (41,546) $ 17,401
See accompanying notes to the consolidated financial statements.
44 | P a g e
GOODFOOD MARKET CORP.
Consolidated Statements of Cash Flows
Years ended August 31, 2019 and 2018
(In thousands of Canadian dollars)
Cash provided by (used in):
Operating:
Net loss
Adjustments for:
Depreciation and amortization
Share-based payments
Stock options settled in cash
Loss on disposal of fixed assets
Net finance expenses (income)
Other non-current assets
Other non-current liabilities
Change in non-cash operating working capital:
Sales tax receivable
Inventories
Other current assets
Accounts payable and accrued liabilities
Deferred revenue
Notes
2019
2018
$
(20,937)
$
(9,434)
19
19
16
2,617
1,810
(99)
–
346
(91)
–
(355)
(3,150)
(543)
17,881
3,401
880
461
458
–
113
(98)
(165)
1,173
(883)
(1,203)
(34)
8,107
1,681
176
Financing:
Net borrowing under line of credit
Proceeds from issuance of long-term debt
Debt issue costs
Repayment of long-term debt
Proceeds from exercise of stock options
Proceeds from exercise of agent compensation options 15
15
Proceeds from issuance of common shares
15
Share issuance costs
Interest paid
5
Payments of lease obligations
13
13
13
Investing:
Interest received
Acquisition and deposits on fixed assets
Acquisition of intangible assets
5
8
10
Increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
1,040
12,500
(64)
(1,983)
3
598
21,067
(1,497)
(911)
500
2,500
(13)
(1,007)
7
–
10,000
(926)
(160)
(1,198) –
29,555
10,901
647
(7,640)
(246)
(7,239)
23,196
24,453
263
(4,431)
(3)
(4,171)
6,906
17,547
Cash and cash equivalents and restricted cash, end of year
$
47,649
$ 24,453
See accompanying notes to the consolidated financial statements.
45 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
NOTE 1
REPORTING ENTITY
Goodfood Market Corp. (the "Company") is incorporated under the Canada Business Corporations Act and
is listed on the Toronto Stock Exchange. The Company has its main production facility and administrative
offices based in Montreal, Quebec, and two secondary production facilities in Alberta and Quebec with an
additional production facility scheduled to open in the beginning of calendar year 2020 in British Columbia.
The Company is a leading online grocery company in Canada, delivering fresh meal solutions that make it
easy for members from coast to coast to enjoy delicious meals at home every week. The Company’s
members get access to a unique selection of products online as well as exclusive pricing made possible by
its direct to consumer fulfilment eco-system that cuts out food waste and expensive retail overhead.
In March 2019, the Company created a wholly-owned subsidiary, Yumm Meal Solutions Corp.
(the "Subsidiary"). These financial statements are prepared on a consolidated basis since the creation of
the Subsidiary.
NOTE 2
BASIS OF ACCOUNTING
The consolidated financial statements of the Company have been prepared in accordance with International
Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board
("IASB"). Details of the Company’s accounting policies are included in Note 25.
As at September 1, 2018, the Company has applied IFRS 15, Revenue from Contracts with Customers
("IFRS 15") and IFRS 9, Financial Instruments ("IFRS 9"), effective for annual reporting periods beginning
on or after January 1, 2018, and has early adopted IFRS 16, Leases ("IFRS 16"). Changes to significant
accounting policies are described in Note 5.
The consolidated financial statements of the Company for the years ended August 31, 2019 and 2018 were
authorized for issue by the Board of Directors ("Board") on November 13, 2019.
NOTE 3
FUNCTIONAL AND PRESENTATION CURRENCY
The consolidated financial statements are presented in Canadian dollars, which is also the Company’s
functional currency.
NOTE 4
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Company’s consolidated financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses and the accompanying disclosures. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying
amount of assets or liabilities affected in future periods. These assumptions and estimates are reviewed on
an ongoing basis. Revisions to accounting estimates are recognized prospectively.
The Company’s main judgements, estimates, and assumptions are presented below:
4.1
MEASUREMENT OF REVENUES
Revenues are presented net of refunds, sales incentives and credits, including referral credits. Credit
amounts are estimated based on the Company’s history and experience of the redemption percentage of
those credits. The corresponding estimated liability for credits is included in deferred revenue.
46 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
4.2
FIXED ASSETS
Judgement is necessary in determining the date at which fixed assets are available for their intended use.
Also, at each reporting date, management determines whether fixed assets and intangible assets present
indicators of impairment. For the purposes of its analysis, management uses its judgement considering
factors such as the economic environment and the market in which the Company operates, budget
forecasts and physical obsolescence.
4.3
DEFERRED INCOME TAX
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilized. Significant management judgement is required to
determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the
level of future taxable profits, together with future tax planning strategies. The Company has determined
that it cannot recognize deferred tax assets on the tax losses carried forward (further details are given in
Note 20).
NOTE 5
CHANGE IN SIGNIFICANT ACCOUNTING POLICIES
5.1
IFRS 16, LEASES
Effective September 1, 2018, the Company early adopted IFRS 16 using the modified retrospective
approach. Accordingly, comparative figures as at and for the year ended August 31, 2018 have not been
restated and continue to be reported under IAS 17, Leases ("IAS 17") and IFRIC 4, Determining whether
an arrangement contains a lease ("IFRIC 4"). Refer to Note 25.6 for further information on accounting policy
effective before and after September 1, 2018.
On initial application, for leases previously classified as operating leases under IAS 17, the Company has
elected to record right-of-use assets based on the corresponding lease liability of $7,456, adjusted for any
deferred lease inducements and any lease payments made at or before the commencement date that were
recorded in other non-current liabilities and other current assets and other assets, on the statement of
financial position as at August 31, 2018. For leases previously classified as finance leases under IAS 17,
the Company measured the right-of-use asset and lease liability at the previous carrying amount of the
finance lease asset of $100 and finance lease liability of $100, respectively.
As such, as at September 1, 2018, the Company recorded lease obligations of $7,556 and right-of-use
assets of $6,173, which are net of the deferred lease inducements and lease payments made at or before
the commencement of the lease of $1,396 and $13, respectively, with no net impact on deficit.
When measuring lease liabilities for those leases previously classified as operating leases under IAS 17,
the Company discounted
incremental borrowing rate as at
its
future
September 1, 2018. The weighted-average rate applied is 5.53%.
lease payments using
The Company has elected to apply the practical expedient to grandfather the assessment of which
transactions are leases on the date of initial application, as previously assessed under IAS 17 and
IFRIC 4. The Company applied the definition of a lease under IFRS 16 to contracts entered into or changed
on or after September 1, 2018. The Company has also elected to apply the practical expedient on facility
leases, not to separate non-lease components from lease components, and instead account for each lease
component and any associated non-lease components as a single lease component. Additionally, the
Company applied the practical expedient to rely on its assessment if leases were onerous under IAS 37,
47 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
Provisions, contingent liabilities and contingent assets and therefore adjusted the right-of-use asset at the
date of initial application by the onerous lease provision rather than conduct an impairment test. No loss
was recognized at the date of transition.
The following table reconciles the Company’s operating lease commitments as at August 31, 2018, as
previously disclosed in the Company’s annual audited financial statements, to the lease obligations
recognized on initial application of IFRS 16 on September 1, 2018.
Operating lease commitments as at August 31, 2018
Discounted using the incremental borrowing rate as at September 1, 2018
Variable lease payments excluded under IFRS 16
Renewal options reasonably certain to be exercised
Minimum lease payments on finance lease liabilities as at August 31, 2018
Lease obligations recognized as at September 1, 2018
5.2
IFRS 15, REVENUE FROM CONTRACTS WITH CUSTOMERS
$
6,946
5,361
(742)
2,837
100
$
7,556
Effective September 1, 2018, the Company adopted IFRS 15, using the cumulative effect method, with the
effect of adopting this standard recognized on September 1, 2018, the date of initial application.
Accordingly, comparative figures as at August 31, 2018 have not been restated. Refer to Note 25.13 for
additional information on the accounting policy applied by the Company.
IFRS 15 replaces IAS 11, Construction Contracts, IAS 18, Revenue ("IAS 18"), IFRIC 13, Customer Loyalty
Programmes, IFRIC 15, Agreements for the Construction of Real Estate, IFRIC 18, Transfer of Assets from
Customers, and SIC 31, Revenue – Barter Transactions Involving Advertising Services. IFRS 15 contains
a single model that applies to contracts with customers and two approaches to recognizing revenue: at a
point in time or over time. The model features a contract-based five-step analysis of transactions to
determine whether, how much and when revenue is recognized. Under IFRS 15, revenue is recognized
when a customer obtains control of the goods and services. Determining the timing of the transfer of control,
at a point in time or over time, requires judgment.
The Company generates revenue from the sale of meal solutions. IFRS 15 did not have an impact on the
Company’s accounting policies for revenue recognition, as under both IFRS 15 and IAS 18, the Company
recognizes revenue at a point in time, which is upon delivery of meal solutions, as it meets the criteria to
satisfy the performance obligation. The Company records deferred revenue until the delivery, as
subscribers pay in advance. These deferred revenue are recognized within a short period of time as the
meal solutions are paid by customer shortly before delivery.
Having completed the five-step analysis, the Company identified contracts with customers and performance
obligations therein, determined transaction price and its allocation to performance obligation and confirmed
the appropriateness of its revenue recognition policy being at a point in time as it is the moment the
Company transfers control over the product to the customers.
5.3
IFRS 9, FINANCIAL INSTRUMENTS
Effective September 1, 2018, the Company adopted IFRS 9, which sets out requirements for recognition
and measurement, impairment, derecognition and general hedge accounting. This standard simplifies the
classification of a financial asset as either at amortized cost or at fair value as opposed to the multiple
classifications which were permitted under IAS 39, Financial Instruments: Recognition and Measurement
48 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
("IAS 39"). This standard also requires the use of a single impairment method as opposed to the multiple
methods in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in
the context of its business model and the contractual cash flow characteristics of the financial assets. The
standard also adds guidance on the classification and measurement of financial liabilities.
Cash and cash equivalents, security deposits and amounts receivable that were classified as loans and
receivables under IAS 39 are classified as financial assets subsequently measured at amortized cost. There
is no change to the initial measurement of the Company’s financial assets.
Accounts payable and accrued liabilities, and long-term debt that were classified as other financial liabilities
under IAS 39 are classified as financial liabilities subsequently measured at amortized cost. There is no
change in the initial measurement of the Company’s financial liabilities.
There was no impact of transition to IFRS 9 on the Company’s statement of financial position as at
September 1, 2018.
5.4
CHANGE IN ACCOUNTING POLICY FOR INTEREST CLASSIFICATION
The Company has decided to change its accounting policy in relation to the classification of interest paid
and received in its consolidated statement of cash flows. Interests paid are classified in financing activities
and interests received are classified in investing activities whereas both were classified in operating
activities before. To reflect this change in accounting policy, the Company has recast the 2018 figures. The
Company believes the new policy is preferable as it more closely aligns the interest payment with the use
of proceeds from financing. Also, interest payments increased as a result of the increase in debt and the
adoption of IFRS 16 which are not related to operating activities.
NOTE 6
INVENTORIES
The cost of inventories recognized as an expense within cost of goods sold during the year ended
August 31, 2019 was $99,234 (2018 – $45,274).
Food
Packaging supplies
Work in process
NOTE 7
OTHER CURRENT ASSETS
Amounts receivable
Prepaid expenses
Other
2019
$ 2,835
1,523
377
$ 4,735
$
2018
889
570
126
$ 1,585
2019
606
180
53
839
$
$
2018
121
71
12
204
$
$
49 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
NOTE 8
FIXED ASSETS
Furniture
and fixtures
Machinery and
equipment
Computer
hardware
Leasehold
improvements
Assets under
construction
Total
Cost:
Balance as at
August 31, 2017
Additions
Transfers
Disposal
Balance as at
August 31, 2018
Additions
Transfers
Reclassification to
right-of-use assets
Balance as at
August 31, 2019
$
56
$
222
$ 108
$
7
$
1,951 $
2,344
144
23
–
667
1,014
(128)
126
–
–
121
4,117
–
3,203
(5,154)
–
4,261
–
(128)
$ 223
$
1,775
$ 234
$
4,245
$
– $
6,477
493
–
4,827
–
440
–
55
2,779
3,011
(2,779)
8,826
–
–
(122)
–
–
–
(122)
$ 716
$
6,480
$ 674
$
7,079
$
232 $ 15,181
Accumulated depreciation:
Balance as at
August 31, 2017
$
6
$
26
$
27
–
$
33
$
97
–
128
(15)
139
390
12
56
–
$
–
$
– $
44
231
–
–
–
442
(15)
$
68
$
231
$
– $
471
148
(22)
–
552
–
–
1,187
–
(22)
$ 130
$
507
$ 216
$
783
$
– $
1,636
Depreciation
Disposals
Balance as at
August 31, 2018
Depreciation
Reclassification to
right-of-use assets
Balance as at
August 31, 2019
Net carrying amounts:
Balance as at
August 31, 2018
Balance as at
August 31, 2019
$ 190
$
1,636
$ 166
$
4,014
$
– $
6,006
586
5,973
458
6,296
232
13,545
50 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
As at August 31, 2019, $1,273 (August 31, 2018 – $111) of fixed asset additions are included in accounts
payable and accrued liabilities and $38 (August 31, 2018 – $147) of leasehold improvement transfers
relates to capitalized depreciation expense.
As at August 31, 2019, $115 (August 31, 2018 – $101) of deposits on fixed assets are included in other
non-current assets. During 2019, $101 of deposits on fixed assets included in other non-current assets as
at August 31, 2018 were transferred to fixed assets.
As at August 31, 2018, $100 of machinery and equipment additions related to finance leases.
NOTE 9
RIGHT-OF-USE ASSETS
Balance as at September 1, 2018
Additions
Disposals
Depreciation
Balance as at August 31, 2019
NOTE 10
INTANGIBLE ASSETS
Facilities
$
5,835
5,614
−
(1,101)
Automotive
equipment
Other
equipment
$
100
421
−
(231)
$
$
238
357
(39)
(105)
Total
6,173
6,392
(39)
(1,437)
$ 10,348
$
290
$
451
$
11,089
Software
Intellectual
property
Intangible in
development
Total
Cost:
Balance as at August 31, 2017
Additions
Balance as at August 31, 2018
Additions
Balance as at August 31, 2019
Accumulated amortization:
Balance as at August 31, 2017
Amortization
Balance as at August 31, 2018
Amortization
Balance as at August 31, 2019
Net carrying amounts:
Balance as at August 31, 2018
Balance as at August 31, 2019
$
91
3
94
130
$ 224
$
$
–
–
–
74
$ 74
$
$
–
–
–
284
$ 284
$
$
91
3
94
488
$ 582
$
$
$
$
20
19
39
31
70
$
55
$ 154
$
$
$
–
–
–
–
–
$
–
$ 74
$
$
–
–
–
–
–
$
$
$
20
19
39
31
70
$
–
$ 284
$
55
$ 512
As at August 31, 2019, $242 (August 31, 2018 – nil) of intangible asset additions are included in accounts
payable and accrued liabilities.
51 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
NOTE 11 OTHER NON-CURRENT ASSETS
Security deposits
Deposits on fixed assets
Other
NOTE 12 ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable
Accrued liabilities
NOTE 13 DEBT
2019
287
115
−
402
$
$
2018
229
101
19
349
$
$
2019
23,961
6,743
30,704
$
$
$
2018
9,366
1,977
$
11,343
Notes
2019
2018
Interest-bearing financing:
Secured term loan, variable interest at bank prime plus
2.5%, maturing in November 2021
Secured term loan, variable interest at bank prime plus
2.5%, maturing in November 2021
13.1
$ 10,000
$
−
13.1
2,500
−
Finance leases:
Finance leases at implicit rates, nil (2018 – 6.28% to
6.79%), maturing from January 2020 to March 2023
5.1
Matured borrowings:
Unsecured term loan, variable rate (2018 – 6.80%)
Secured term loan, variable interest at bank prime
plus 3.25%
−
−
−
Interest rate swaps
Unamortized financing costs
Current portion of long-term debt
100
2
$
2,000
2,102
−
(10)
13.2
$ 12,500
46
(55)
$ 12,491
$
2,092
(31)
(528)
$ 12,460
$
1,564
52 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
13.1
CREDIT FACILITY
In September 2017, the Company obtained a commitment from a Canadian chartered bank for a secured
credit facility which includes a five-year variable-rate term loan of $2,500, a $500 revolving line of credit and
$500 in credit card availability. The credit facility was secured by inventory and a first-ranking movable
hypothec on the Company’s assets.
On October 12, 2017, the term loan of $2,500 was disbursed, bearing variable interest at bank prime plus
3.25% (6.95% as at August 31, 2018). The term loan was repayable in equal quarterly instalments of $125
beginning on November 30, 2017 and ending August 31, 2022. The proceeds of the term loan were used
to refinance the Company’s long-term debt, finance capital expenditures, and for general corporate
purposes. As at August 31, 2018, the term loan had a balance of $2,000 and the operating line of credit
was fully drawn. As at August 31, 2019, the secured credit facility obtained from the Canadian chartered
bank was completely replaced by the credit facility obtained from the Canadian financial institution
described below.
In November 2018, the Company obtained from a Canadian financial institution a secured three-year term
loan of $10,000, a $2,500 revolving line of credit and $1,000 in other short-term financing. This credit facility
is secured by a first-ranking hypothec on all of the Company’s movable and immovable assets. The
proceeds were used to fund expansion capital expenditures, invest in automation, and refinance the
Company’s long-term debt. In April 2019, the Canadian financial institution increased the amount in other
short-term financing from $1,000 to $3,000. In August 2019, the Company obtained from the same
Canadian financial institution an additional secured term loan of $2,500, bearing the same terms as the
term loan obtained in November 2018. The Canadian financial institution also increased the amount of the
revolving line of credit from $2,500 to $10,000 and the amount of other short-term financing from $3,000 to
$5,000.
As at August 31, 2019, $12,500 of the term loans were disbursed, bearing variable interest at the Canadian
Dollar Offered Rate ("CDOR") plus 2.50% (4.46% as at August 31, 2019). The term loans are repayable in
quarterly installments of $125 and $31, beginning on December 4, 2020 and August 31, 2020, respectively,
with a bullet repayment of the balance at the end of the term ending in November 2021. As at
August 31, 2019, $1,540 of the revolving line of credit was disbursed, bearing variable interest at the
Canadian Dollar Offered Rate (“CDOR”) plus 2.50% (4.46% as at August 31, 2019). Debt issuance costs
of $64 were incurred and recorded against the debt at the inception date of the debt. For the year ending
August 31, 2019, debt issuance costs of $9 (2018 – $2) were amortized and recorded in net finance
expenses.
As at August 31, 2019, the Company has corporate credit cards used for business purposes with authorised
limits totaling $7,875 (August 31, 2018 – $1,365), including the $5,000 in other short-term financing secured
from a Canadian financial institution. Amounts owing with respect to credit cards are included in accounts
payable and accrued liabilities.
The credit facility includes a collateral requirement of $2,500 placed in a restricted cash account and
financial covenants with which the Company was in compliance as at August 31, 2019.
53 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
13.2
INTEREST RATE SWAPS
Effective March 1, 2019, the Company signed a swap agreement with the same Canadian financial
institution whereby the Company fixed the annual interest rate at 2.22% plus 2.50% on a notional amount
of $2,500 until November 2021. With this agreement, the Company effectively fixed the interest rate at
4.72% for this portion of the Company’s long-term debt.
Effective March 14, 2019, the Company signed a second swap agreement with the same Canadian financial
institution whereby the Company fixed the annual interest rate at 2.07% plus 2.50% on a notional amount
of $1,263 until November 2021. With this agreement, the Company effectively fixed the interest rate at
4.57% for this portion of the Company’s long-term debt.
As at August 31, 2019, the Company’s interest rate swaps are classified as derivative financial liabilities
not designated as hedging instruments. In accordance with IFRS 9, the Company’s swap agreements are
measured at fair value with gains and losses in fair value presented in net finance expenses in the
Company’s consolidated statements of loss and comprehensive loss. For the period ended August 31,
2019, a loss in fair value of $46 is presented in net finance expenses (Note 16) with a corresponding liability
presented in long-term debt.
13.3
PRINCIPAL PAYMENTS
Principal payments due on the long-term debt in each of the following years are as follows:
2020
2021
2022
NOTE 14 LEASE OBLIGATIONS
The following table presents the lease obligations of the Company:
Balance as at September 1, 2018
Additions
Disposals
Payment of lease obligations
Interest expense on lease obligations
Lease obligations as at August 31, 2019
$
Principal
payments
31
500
11,969
August 31, 2019
$
7,556
6,392
(26)
(1,840)
642
$ 12,724
54 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
The following table presents an analysis of the contractual undiscounted cash flows from lease obligations:
Maturity analysis – contractual undiscounted cash flows
Less than one year
One to five years
More than five years (1)
Total undiscounted lease obligations as at August 31, 2019
Lease obligations as at August 31, 2019
Current portion
Non-current portion
August 31, 2019
$
1,874
7,050
6,944
$ 15,868
$ 12,724
1,273
11,451
(1) As at August 31, 2019, future lease payments of $5,591 for which the Company is reasonably certain to
exercise the renewal options have been recognized in lease obligations, representing an amount of
$6,443 of undiscounted cash flows.
With the exception of future cash flows associated with the British Columbia facility described below, there
are no future cash outflows related to lease agreements to which the Company is potentially exposed that
are not reflected in the measurement of lease obligations.
British Columbia facility
On July 3, 2019, the Company signed a ten-year lease with a renewal option of five years for an
84,000 square-feet production facility located in Vancouver, British Columbia, Canada. The expected
delivery date of the facility is October 1, 2019 and payment commencement date is January 15, 2020.
Management intends to begin operations in the new facility in the beginning of calendar year 2020. Fixed
rent payments represent a total commitment of $14,630. Considering that as at August 31, 2019, the
Company did not have a right-of-use asset, the facility was not reflected as a right-of-use asset and no
corresponding lease liability was recorded.
NOTE 15 SHARE CAPITAL
15.1
SHARE ISSUANCES
The Company is authorized to issue an unlimited number of no par value common shares.
In connection with the public offering completed on May 7, 2018, the Company issued 4,000,000 common
shares (of which 60,000 common shares were purchased by Board members and key management
personnel) at a price of $2.50 per share for gross proceeds of $10,000, less share issuance costs of $926.
In connection with the public offering completed on February 22, 2019, the Company issued
6,019,212 common shares (of which 26,500 common shares were purchased by Board members and key
management personnel) at a price of $3.50 per share for gross proceeds of $21,067, less share issuance
costs of $1,497.
During the period ended August 31, 2019, 879 common shares (2018 – 71,413 common shares) of the
Company were issued following the exercise of stock options (refer to Note 19).
55 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
15.2
EXERCISE OF AGENT COMPENSATION OPTIONS
In connection with the Company’s private placement completed on June 1, 2017, the Company granted
405,002 two-year compensation options to the agents to purchase common shares of the Company at a
price of $2.00 per common share. During the period that ended August 31, 2019, 299,064 options were
exercised for gross proceeds of $598. The remaining balance of agent compensation options that were not
exercised expired on June 1, 2019.
NOTE 16 NET FINANCE EXPENSES (INCOME)
Interest expense on long-term debt
Interest expense on lease obligations
Interest income
Foreign exchange loss
Fair value loss on interest rate swaps (Note 13.2)
2019
2018
$
292
$
162
642
(687)
53
46
−
(280)
20
−
$
346
$
(98)
NOTE 17 LOSS PER SHARE
2019
2018
Net loss
Basic weighted average number of common shares
Loss per share – basic and diluted
$
$
(20,937)
$
(9,434)
55,069,384
49,068,678
(0.38)
$
(0.19)
The exercise of stock options and share issuance is weighted from the transaction date.
Stock options were excluded from the diluted weighted average number of common shares calculation
because such inclusion would have been antidilutive due to the net loss reported by the Company.
NOTE 18 ADDITIONAL INFORMATION ON THE CONSOLIDATED STATEMENT OF LOSS AND
COMPREHENSIVE LOSS
Short-term employee benefit expense
Operating lease expense
2019
2018
$ 39,419
$
18,753
–
816
56 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
NOTE 19 STOCK OPTION PLAN
The stock option plan was established by the Company to attract and retain employees, consultants,
directors and officers. The plan provides for the granting of options to purchase common shares where at
any given time the number of stock options reserved for issuance is equal to 7.5% of the Company’s issued
and outstanding common shares. Under the plan, options generally vest over a period of four years and
expire eight years from the grant date. As at August 31, 2019, 450,661 stock options were available for
issuance (2018 – 1,165,791).
Total share-based payments recognized under the stock option plan amounted to $1,810 for the year ended
August 31, 2019 (2018 – $458).
During the period that ended August 31, 2019, 2,661,531 options (2018 – 787,666 options) were granted
at a weighted average exercise price of $2.89 (2018 – $2.55) per option, of which 1,156,766 options
(2018 – 300,000) were granted to key management personnel and members of the Board.
The weighted average fair value of stock options granted during the year ended August 31, 2019 was $1.36
(2018 – $1.42) and was estimated at the date on which the options were granted using the Black-Scholes
option pricing model with the following weighted-average assumptions:
2019
2018
Volatility
Risk-free interest rate
Expected life of options
Common share value at grant date
Exercise price
53%
1.84%
5.1 years
2.89
$
2.89
$
Information concerning the movement in stock options is as follows:
Number of
options
1,425,471
2,661,531
(879)
(74,740)
(101,214)
3,910,169
2019
Weighted
average
exercise price
$
1.96
2.89
2.62
1.62
2.85
2.57
Number of
options
751,581
787,666
(71,413)
−
(42,363)
1,425,471
Outstanding, beginning of year
Granted
Exercised
Stock options settled in cash(1)
Forfeited
Outstanding, end of year
65%
2.07%
5.1 years
2.55
2.55
$
$
2018
Weighted
average
exercise price
$
1.07
2.55
0.10
−
0.30
1.96
Exercisable, end of year
639,039
$
1.60
322,483
$
1.02
(1) On December 4, 2018, the Company exceptionally agreed to settle in cash a specific number of vested
stock options with two members of management. The net cash settled amount was $99 and represents
the difference between the fair value of the stock on the date of settlement and the exercise stock price.
There are no other stock options that can be or are intended to be net settled in cash in the future.
For the year ended August 31, 2019, the weighted average share price of the Company’s common shares
upon the exercise date of stock options was $2.94 (2018 – $2.94).
57 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
Summary of options outstanding as at August 31, 2019 and 2018 is as follows:
Balance as at August 31, 2019:
Exercise price
Less than $1.00
$
$
$
$
1.00 – 1.99
2.00 – 2.49
2.50 – 2.99
3.00 – 3.49
Balance as at August 31, 2018:
Less than $1.00
1.00 – 1.99
$
2.00 – 2.49
$
2.50 – 2.99
$
NOTE 20
INCOME TAXES
Number of
options
outstanding
Weighted
average
contractual life
outstanding
Exercisable
options
178,834
283,718
203,325
2,313,573
930,719
3,910,169
178,834
347,820
215,082
683,735
1,425,471
6.81
5.98
6.87
7.08
7.67
7.12
6.75
6.98
6.98
7.71
7.30
178,834
109,808
143,050
207,347
–
639,039
146,236
86,955
89,292
–
322,483
The following table reconciles income taxes computed at the Company’s statutory rate of 26.6%
(2018 – 26.7%) and the total tax expense for the years ended August 31:
2019
2018
Loss before income taxes
Income tax benefit at the combined Canadian statutory rate
Decrease resulting from:
Change in unrecognized deferred income tax assets
Permanent differences
Other
Total income expense
$
(20,937)
$
(5,569)
(9,434)
(2,519)
5,045
520
4
–
$
2,387
132
–
–
$
58 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
Movement in temporary differences during the year ended August 31, 2019 is detailed as follows:
Deferred income tax assets:
Lease obligation
Deferred income tax liabilities:
Fixed assets
Balance as at
August 31, 2018
Recognized in
Profit or loss
Balance as at
August 31, 2019
$
1,748
$
988
$
2,736
(1,748)
$
−
$
(988)
−
(2,736)
$
−
As at August 31, 2019 and 2018, the Company had unrecognized deferred income tax assets as follows:
Deferred income tax assets:
Net operating loss carry forwards
$
8,241
$
3,398
2019
2018
Fixed assets
Share issuance costs
Intangible assets
Other non-current liabilities
Other
636
689
254
−
47
−
506
246
258
20
Unrecognized deferred income tax assets
$
9,867
$
4,428
The Company has operating tax losses carried forward of $31,097 (2018 – $12,824) and unrecognized
deductible temporary differences of $6,133 (2018 – $3,885) that are available to reduce taxable income.
Deferred income tax assets have not been recognized in respect of these items because it is not probable
that future taxable profit will be available against which the Company can utilize the benefits therefrom. As
at August 31, 2019, the amounts and expiry dates of the tax losses carried forward were as follows:
2035
2036
2037
2038
2039
$
49
712
3,547
8,516
18,273
$
31,097
59 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
NOTE 21 FINANCIAL INSTRUMENTS
The Company has determined that the fair values of cash and cash equivalents, amounts receivable
included in other current assets, restricted cash, security deposits included in other assets, line of credit,
and accounts payable and accrued liabilities approximate their respective carrying amounts at the
consolidated statement of financial position date, due to the short-term maturity of those instruments.
The Company determined that the fair value of its long-term debt approximates its carrying amount as it
bears interest at market interest rates for financial instruments with similar terms and risks.
The fair value of interest rate swaps as at August 31, 2019 was estimated using Level 2 inputs.
NOTE 22 FINANCIAL RISKS
Credit risk:
Credit risk is the risk of an unexpected loss if a counterparty to a financial instrument fails to meet its
contractual obligation. The Company regularly monitors credit risk exposure and takes steps to mitigate the
likelihood of this exposure resulting in losses. The Company's exposure to credit risk is primarily attributable
to its cash and cash equivalents, amounts receivable included in other current assets, restricted cash, and
security deposits included in other assets. The Company's maximum credit exposure corresponds to the
carrying amount of these financial assets. Management believes the credit risk is limited because the
Company deals with major North American financial institutions and an internationally established payment
processor.
Interest rate risk:
The Company’s long-term debt and revolving line of credit bear interest at variable rates which are
determined by a base rate set by the lender plus a margin. As a result, the Company is exposed to interest
rate risk due to fluctuations in lenders’ base rates. The Company manages its interest rate risk by using
variable-to-fixed interest rate swaps as described in Note 13.
Sensitivity analysis for interest rate risk
An increase or decrease of 100 basis points in the interest rate would not have a significant impact on the
Company’s net loss.
Liquidity risk:
Liquidity risk is the risk that the Company will be unable to fulfill its obligations on a timely basis or at a
reasonable cost. The Company manages its liquidity risk by monitoring its operating requirements. The
Company prepares budgets and cash forecasts to ensure it has sufficient funds to fulfill its obligations.
Capital management
The Company's objective in managing its capital is to ensure a sufficient liquidity position to finance its
operations, to maximize the preservation of capital and to deliver competitive returns on invested capital.
To fund its activities, the Company has relied on public and private placements, convertible notes, and
long-term and short-term debt, which are included in the Company's definition of capital. The Company
manages its excess cash to ensure that it has sufficient reserves to fund its operations and capital
expenditures.
60 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
The following are amounts due on contractual maturities of financial liabilities, including estimated interest
payments as at August 31:
Total carrying
amount
Contractual
cash flows (3)
Less than 1
year
1 to 5
years
2019
More than 5
years
Line of credit
Accounts payable and
accrued liabilities
$
1,540
$
1,540
$
1,540
$
−
$
30,704
30,704
30,704
−
−
−
Long-term debt, including
current portion (1), (2)
12,491
13,755
597
13,158
−
$
44,735
$
45,999
$
32,841
$ 13,158 $
−
Total carrying
amount
Contractual
cash flows
Less than 1
year
1 to 5
years
2018
More than 5
years
Line of credit
Accounts payable and
accrued liabilities
$
500
$
500
$
500
$
11,343
11,343
11,343
$
−
−
−
−
Long-term debt, including
current portion (1), (2)
2,092
2,415
658
1,757
−
$
13,935
$
14,258
$
12,501
$
1,757
$
−
(1) In November 2018, the Company signed a new debt agreement with proceeds partially used to
refinance the long-term debt as at August 31, 2018 (see further details in Note 13).
(2) As at August 31, 2019, an interest rate of 4.46% (2018 – 6.95%) was used to determine the
estimated interest payments on the Company’s variable-rate portion of the Company’s long-term
debt, and interest rates of 4.72% and 4.57% were used to determine the interest payments on the
fixed-rate portion of the Company’s long-term debt.
(3) See Note 14 for contractual payments due on lease obligations.
61 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
NOTE 23 RELATED PARTIES
The chief executive officer ("CEO") and the president and chief operating officer ("President and COO") are
controlling shareholders of the Company and are members of the Board of the Company. The CEO is also
Chairman of the Board.
23.1
RELATED PARTIES
The Company’s related party transactions are as follows:
On February 22, 2019, in connection with the public offering described in Note 15, 26,500 common
shares were purchased by Board members and key management personnel at a price of $3.50 per
share;
On May 7, 2018, in connection with the public offering described in Note 15, 60,000 common shares
were purchased by Board members and key management personnel at a price of $2.50 per share.
These transactions are recorded at the amount of consideration paid as established and agreed to by the
related parties.
23.2
KEY MANAGEMENT PERSONNEL
Key management personnel includes the members of the Board as well as the CEO, President and COO,
and chief financial officer.
The following table presents the compensation of the key management personnel recognized in net loss:
Short-term employee benefits (includes
directors’ fees)
Share-based payments
NOTE 24 BASIS OF MEASUREMENT
2019
$ 1,963
1,062
$
2018
867
356
The consolidated financials statements have been prepared on the historical cost basis except for financial
instruments at fair value through profit or loss.
NOTE 25 SIGNIFICANT ACCOUNTING POLICIES
25.1
BASIS OF CONSOLIDATION
The consolidated financial statements of the Company include the accounts of the Company and of the
Subsidiary.
Subsidiary
A subsidiary is an entity controlled by the Company. Control is achieved where the Company has power
over the investee, exposure or rights to variable returns from its involvement with the investee, and the
ability to use its power over the investee to affect the amount of these returns. The Company reassesses
whether it controls an entity if facts and circumstances indicate that one or more of the aforementioned
points have changed. A subsidiary is consolidated from the date the Company obtains control and continues
to be consolidated until the date that such control ceases.
62 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
25.2
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash held in financial institutions, outstanding deposits and short-term
deposits with a maturity of three months or less, which are subject to an insignificant risk of changes in
value.
25.3
INVENTORIES
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is determined
using the first-in, first-out method. Cost includes acquisition costs net of discounts, and other costs incurred
to bring inventories to their present location and condition. Net realizable value is the estimated selling price
in the ordinary course of business, less the estimated selling expenses.
25.4
RESTRICTED CASH
Restricted cash is cash where specific restrictions exist on the Company’s ability to use this cash. Restricted
cash consists primarily of cash held as collateral, which is subject to the terms of the financing agreement
(see Note 13).
25.5
FIXED ASSETS
25.5.1 RECOGNITION AND MEASUREMENT
Items of fixed assets are recognized at cost less accumulated depreciation and any accumulated
impairment losses. Cost includes expenditures that are directly attributable to acquiring and bringing the
assets to a working condition for their intended use.
When parts of an item of fixed assets have different useful lives, they are accounted for as separate items
(major components).
Gains and losses on disposal of an item of fixed assets are determined by comparing the proceeds from
disposal with the carrying amount and are recognized in net loss.
25.5.2 SUBSEQUENT EXPENDITURE
The cost of replacing a part of an item of fixed assets is recognized in the carrying amount of the item if it
is probable that the future economic benefits embodied within the part will flow to the Company and its cost
can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the
day-to-day servicing of property and equipment are recognized in net loss as incurred.
25.5.3 DEPRECIATION
Depreciation is calculated over the cost of the asset less its residual value and is recognized in net loss on
a straight-line basis over the estimated useful lives of each part of an item of fixed assets, since this most
closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.
Assets under construction are not depreciated and reflect the cost of fixed assets, which are not yet
available for their intended use. Assets under construction will start to be depreciated when they are
available for their intended use. Estimates for depreciation methods, useful lives and residual values are
reviewed at each reporting date and adjusted prospectively, if appropriate.
63 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:
Asset
Furniture and fixtures
Machinery and equipment
Computer hardware
Leasehold improvements
25.6
LEASES
Period
3 to 5 years
3 to 20 years
3 to 5 years
Shorter of lease term and useful life
The Company has applied IFRS 16 using the modified retrospective approach and therefore the
comparative information has not been restated and continues to be reported under IAS 17 and IFRIC 4.
The details of accounting policies under IAS 17 and IFRIC 4 are disclosed separately.
Policy applicable from September 1, 2018
Effective September 1, 2018, the Company early adopted IFRS 16, Leases, which specifies how to
recognize, measure, present and disclose leases. The standard introduces a single lessee accounting
model and requires a lessee to recognize a right-of-use asset representing its right to use the underlying
asset and a lease liability representing its obligation to make lease payments. The Company’s accounting
policy under IFRS 16 is as follows:
At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on
whether the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. This policy is applied to contracts entered into, or changed, on or after
September 1, 2018.
Right-of-use asset
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
The right-of-use assets are subsequently depreciated from the commencement date to the earlier of the
end of the useful life of the right-of-use asset or the end of the lease term using the straight-line method.
The lease term includes consideration of an option to renew or to terminate if the Company is reasonably
certain to exercise that option. Lease terms, including options to renew for which the Company is
reasonably certain to exercise, range from 0 to 11 years for facilities, automotive equipment and other
equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and
adjusted for certain remeasurements of the lease liability.
Lease liability
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental
borrowing rate as the discount rate.
64 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
The Company determines its incremental borrowing rate by obtaining interest rates from external financing
sources and makes certain adjustments to reflect the terms of the lease and the type of the asset leased.
Lease payments included in the measurement of the lease liability comprise fixed payments (including in-
substance fixed payments), the exercise price under a purchase option that the Company is reasonably
certain to exercise, and lease payments in an optional renewal period if the Company is reasonably certain
to exercise a renewal option.
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when
there is a change in future lease payments arising mainly if the Company changes its assessment of
whether it will exercise a purchase, renewal or termination option, or if there is a revised in-substance fixed
lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
Policy applicable before September 1, 2018
Under IAS 17, the Company’s accounting policy was as follows:
The determination of whether an arrangement was (or contained) a lease was based on the substance of
the arrangement at the inception of the lease. The arrangement was, or contained, a lease if fulfilment of
the arrangement was dependent on the use of a specific asset and the arrangement conveyed a right to
use the asset, even if that asset was not explicitly specified in an arrangement.
A lease was classified at the inception date as a finance lease or an operating lease. A lease that transferred
substantially all the risks and rewards incidental to ownership to the Company was classified as a finance
lease.
Finance leases were capitalized at the commencement of the lease at the inception date fair value of the
leased property or, if lower, at the present value of the minimum lease payments. Lease payments were
apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate
of interest on the remaining balance of the liability. Finance charges were recognized in net finance
expenses (income) in net loss.
A leased asset was depreciated over the useful life of the asset. However, if there was no reasonable
certainty that the Company would obtain ownership by the end of the lease term, the asset was depreciated
over the shorter of the estimated useful life of the asset and the lease term.
An operating lease was a lease other than a finance lease. Operating lease payments were recognized in
net loss on a straight-line basis over the lease term. Lease incentives received were recognized as an
integral part of the total lease expense, over the term of the lease.
25.7
INTANGIBLE ASSETS
25.7.1 RECOGNITION AND MEASUREMENT
Intangible assets that have finite useful lives are measured at cost less accumulated amortization and any
accumulated impairment losses.
65 | P a g e
GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
25.7.2 SUBSEQUENT EXPENDITURE
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure is recognized in net loss as incurred.
25.7.3 AMORTIZATION
Amortization is recognized in net loss on a straight-line basis over the estimated useful lives of the finite life
of intangible assets. Intangible assets in development are not amortized and reflect the cost of developing
the intangible asset, which are not yet available for their intended use. Intangible assets in development
will start to be depreciated when they are available for their intended use.
The estimated useful lives for the current year and comparative periods are as follows:
Asset
Software
Intellectual property
Period
5 years
5 years
Amortization methods, useful lives and residual values are reviewed at each reporting and adjusted
prospectively, if appropriate.
25.8
IMPAIRMENT OF NON-FINANCIAL ASSETS
The Company reviews the carrying amount of its non-financial assets, which include intangible assets with
a finite useful life and fixed assets on each reporting date, in order to determine if specific events or changes
in circumstances indicate that their carrying amounts may not be recoverable.
For impairment testing purposes, assets that cannot be tested individually are aggregated into a cash
generating unit ("CGU"). An impairment loss is recognized if the carrying amount of an asset or a CGU
exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs
to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. Impairment losses are recognized in net loss.
25.9
FINANCIAL INSTRUMENTS
Effective September 1, 2018, the Company adopted IFRS 9, which sets out requirements for recognition
and measurement, impairment, derecognition and general hedge accounting. This standard simplifies the
classification of a financial asset as either at amortized cost or at fair value as opposed to the multiple
classifications which were permitted under IAS 39. This standard also requires the use of a single
impairment method as opposed to the multiple methods in IAS 39. The approach in IFRS 9 is based on
how an entity manages its financial instruments in the context of its business model and the contractual
cash flow characteristics of the financial assets. The standard also adds guidance on the classification and
measurement of financial liabilities.
25.9.1 RECOGNITION AND INITIAL MEASUREMENT
Financial assets and financial liabilities are recognized when the Company becomes party to the contractual
provisions of the financial instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value
through profit or loss ("FVTPL"), transaction costs that are directly attributable to its acquisition or issue.
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GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
25.9.2 CLASSIFICATION AND SUBSEQUENT MEASUREMENT
Financial assets – Policy applicable from September 1, 2018
On initial recognition, a financial asset is classified as measured at amortised cost, fair value through other
comprehensive income ("FVOCI") – debt investment, FVOCI – equity investment, or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its
business model for managing financial assets, in which case all affected financial assets are reclassified
on the first day of the first reporting period following the change in the business model.
Amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not
designated as FVTPL: (1) it is held within a business model whose objective is to hold assets to collect
contractual cash flows; and (2) its contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Debt investment
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated
at FVTPL: (1) it is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets, and (2) its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding.
All financial assets not classified as measured at amortised cost or FVOCI are measured at FVTPL. The
Company has not designated any financial assets at fair value through profit or loss and does not have any
financial assets at FVOCI.
Financial assets at amortised costs are subsequently measured at amortised cost using the effective
interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange
gains and losses and impairment are recognised in net loss. Any gain or loss on derecognition is recognised
in net loss.
Financial assets – Policy applicable before September 1, 2018
Financial assets were classified in four categories:
Financial assets at fair value through profit or loss
A financial asset was classified at FVTPL if it was classified as held for trading or was designated as such
on initial recognition. Directly attributable transaction costs were recognized in net loss as incurred.
Financial assets at FVTPL were measured at fair value and changes therein, including any interest or
dividend income, were recognized in net loss. The Company did not designate any financial assets at fair
value through profit or loss.
Loans and receivables
These assets were initially measured at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, they were measured at amortized cost using the effective interest method.
The Company classified its cash and cash equivalents, security deposits and amounts receivable as loans
and receivables.
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GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
Held-to-maturity investments
These assets were initially measured at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, they were measured at amortized cost using the effective interest method.
The Company had no financial assets as held-to-maturity.
Available-for-sale financial assets
These assets were initially measured at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, they were measured at fair value and changes therein, other than
impairment losses and foreign currency differences on debt instruments, were recognized in other
comprehensive loss and accumulated in the fair value reserve. When these assets were derecognized, the
gain or loss accumulated in equity is reclassified to net loss. The Company did not have financial assets as
available for sale.
Financial liabilities
Financial liabilities are classified as measured at cost or FVTPL. A financial liability is classified as FVTPL
if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial
liabilities at FVTPL are measured at fair value and net gains and losses, including interest expenses, are
recognized in net loss. Any gain or loss on derecognition is also recognized in net loss.
The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows.
Swaps are measured at FVTPL with the gains and losses recognized in the consolidated statements of
loss and comprehensive loss.
25.9.3 DERECOGNITION
Financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset
expire, or it transfers the rights to receive the contractual cash flows of the financial asset in a transaction
in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which
the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does
not retain control of the financial asset.
Financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled,
or expire. The Company also derecognizes a financial liability when its terms are modified and the cash
flows of the modified liability are substantially different, in which case a new financial liability based on the
modified terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in net
loss.
25.9.4 OFFSETTING
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated
statements of financial position if there is a currently enforceable legal right to offset the recognized amounts
and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
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GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
25.9.5
IMPAIRMENT
With respect to impairment of financial assets, IFRS 9 requires applying the expected credit losses model
instead of the incurred credit losses model set out in IAS 39. Under the expected credit losses model, the
Company must recognize expected credit losses and changes in such losses at each reporting date to
reflect changes in credit risk since the initial recognition of the financial assets. Although cash and cash
equivalents and restricted cash are subject to the IFRS 9 impairment requirements, the expected credit
losses identified were not significant.
25.9.6 FAIR VALUE MEASUREMENT
In establishing the fair value, the Company uses a fair value hierarchy based on levels as defined below:
Level 1: defined as observable inputs such as quoted prices in active markets.
Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly
observable.
Level 3: defined as inputs that are based on little or no observable market data and, therefore, requiring
entities to develop their own assumptions.
25.10
PROVISIONS
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability. The unwinding of the discount is recognized as net finance expenses.
Contingent liability
A contingent liability is a possible obligation that arises from past events and of which the existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not within the
control of the Company, or a present obligation that arises from past events (and therefore exists), but is
not recognized because it is not probable that a transfer or use of assets, provision of services or any other
transfer of economic benefits will be required to settle the obligation, or the amount of the obligation cannot
be estimated reliably.
25.11
SHORT-TERM EMPLOYEE BENEFITS
Short-term employee benefits are measured on an undiscounted basis and are expensed as the related
service is provided. A liability is recognized for the amount expected to be paid if the Company has a present
legal or constructive obligation to pay this amount as a result of past service provided by the employee and
the obligation can be estimated reliably.
25.12
SHARE-BASED PAYMENTS
Employees and directors of the Company receive remuneration in the form of share-based payments,
whereby employees render services as consideration for equity instruments (equity-settled transactions).
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GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made
using an appropriate valuation model, further details of which are given in Note 19. That cost is recognized
as a compensation expense, together with a corresponding increase in equity (contributed surplus), over
the period in which the service and the performance conditions are fulfilled (the vesting period). The
cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired. The expense or credit in the statements of loss
and comprehensive loss for a period represents the movement in cumulative expense recognized at the
beginning and end of that period.
25.13
REVENUE FROM CONTRACTS WITH CUSTOMERS
Effective September 1, 2018, the Company adopted IFRS 15, using the cumulative effect method, with the
effect of adopting this standard recognized on September 1, 2018, the date of initial application.
Accordingly, comparative figures as at August 31, 2018 have not been restated. The effect of initially
applying IFRS 15 is described in Note 5.2.
Revenue from the sale of goods is measured at the fair value of consideration received, net of refunds,
sales incentives and credits. Revenue is recognized at a point in time, which is upon delivery of meal
solutions, as it meets the criteria to satisfy the performance obligation. Deferred revenue is recognized for
consideration received in advance of the related revenue. Sales and referral credits are also included in
deferred revenue and are measured based on the fair value of the sales and referral credits granted, taking
into consideration the estimated redemption percentage. Sales and referral credits are recognized as
revenue upon redemption and when the Company fulfills its obligation.
25.14
TAXES
Income tax expense comprises current and deferred income taxes. It is recognized in net loss except to the
extent that it relates to a business combination, or items recognized directly in equity or in other
comprehensive loss.
Current income tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the years
and any adjustment to the tax payable or receivable in respect of previous years. The amount of current
tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects
uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted
at the reporting date. Current tax assets and liabilities are offset only if certain criteria are met.
Deferred income tax
Deferred income tax is recognized in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred income tax assets are recognized for unused tax losses, unused tax credits and deductible
temporary differences to the extent that it is probable that future taxable profits will be available against
which they can be used. Deferred income tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will be realized; such reductions are
reversed when the probability of future taxable profits improves. Unrecognized deferred income tax assets
are reassessed at each reporting date and recognized to the extent that it has become probable that future
taxable profits will be available against which they can be used.
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GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
Deferred income tax is measured at the tax rates that are expected to be applied to temporary differences
when they reverse, using tax rates enacted or substantively enacted at the reporting date.
The measurement of deferred income tax reflects the tax consequences that would follow from the manner
in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets
and liabilities. Deferred income tax assets and liabilities are offset only if certain criteria are met.
Sales tax
Expenses and assets are recognized net of the amount of sales tax, except:
When the sales tax incurred on a purchase of assets or services is not recoverable from the taxation
authority, in which case, the sales tax is recognized as part of the cost of acquisition of the asset or as
part of the expense item, as applicable; and
When receivables and payables are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the consolidated statements of financial position.
25.15
FOREIGN CURRENCY
Transactions in foreign currencies are comprised of purchases from foreign suppliers. These transactions
are translated using the functional currency of the Company at exchange rates at the dates of the
transactions. The related payables denominated in foreign currencies at the reporting date are translated
to the functional currency at the exchange rates at that date. The resulting foreign currency gains or losses
are recognized on a net basis within net finance expenses in net loss.
25.16
EARNINGS PER SHARE
Basic earnings per share are computed by dividing net loss by the weighted average number of common
shares outstanding during the year. Diluted earnings per share are computed using the weighted average
number of common shares outstanding during the year adjusted to include the dilutive impact of stock
options and convertible notes.
The dilutive effect of outstanding options is excluded as additional share dilution in the computation of
diluted earnings per share as such inclusion would have been antidilutive due to the net loss reported by
the Company (further details are given in Note 17).
25.17
FINANCE INCOME AND FINANCE EXPENSES
Finance income comprises interest income and foreign exchange gains. Finance expenses comprise
interest expense on long-term debt and changes in fair value of convertible notes. Prior to the year ended
August 31, 2019, the Company recognized finance income and finance expenses as operating activities in
the Company’s consolidated statements of cash flows. As described in Note 5.4, the Company decided to
change its accounting policy in relation to the classification of interest paid and received in its consolidation
statements of cash flows. Refer to Note 5.4 for more information.
25.18
SEGMENT REPORTING
The Company determined that it operated a single operating segment for the years ended August 31, 2019
and 2018.
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GOODFOOD MARKET CORP.
Notes to the Consolidated Financial Statements
Years ended August 31, 2019 and 2018
(Amounts are in thousands of Canadian dollars, except share and stock options information)
NOTE 26 STANDARDS ISSUED BUT NOT YET EFFECTIVE
A number of new standards are effective for annual periods beginning after January 1, 2019 and earlier
application is permitted; however, the Company has not early adopted the new or amended standards in
preparing these consolidated financial statements.
The following amended standards and interpretations are not expected to have a significant impact on the
Company’s consolidated financial statements.
Amendments to References to Conceptual Framework in IFRS Standards;
Definition of Material (Amendments to IAS 1 and IAS 8).
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CORPORATE INFORMATION
ANNUAL MEETING OF SHAREHOLDERS
Wednesday, January 8, 2020
10:00 a.m.
Offices of Fasken Martineau DuMoulin LLP
800, Square-Victoria Street
Suite 3700
Montréal, Québec
H4Z 1E9
STOCK INFORMATION
Shares listed: Toronto Stock Exchange
Ticker symbol: FOOD
Initial public offering: 2017
52-week high/low (Sept. 1, 2018 – Aug. 31, 2019): $3.74-$2.45
Share price as at November 13, 2019: $3.12
Common shares outstanding as at August 31, 2019: 58,144,400
TRANSFER AGENT AND REGISTRAR
TSX Trust
AUDITORS
KPMG LLP
LEGAL COUNSEL
Fasken Martineau DuMoulin LLP
INVESTOR RELATIONS
IR@makegoodfood.ca
MEDIA CONTACT
media@makegoodfood.ca
CORPORATE OFFICE
4600 Hickmore Street,
Saint-Laurent, Quebec
H4T 1K2
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makegoodfood.ca
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