CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This Prospectus contains “forward-looking information” within the meaning of applicable securities laws in Canada. Forward-looking information may relate to anticipated events or results and may include information regarding the Corporation’s financial position, business strategy, growth plans, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding the Corporation’s expectations of future results, performance, achievements, prospects or opportunities or the markets in which we operate is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “does not anticipate”, “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances.

In particular and without limitation, the forward-looking information in this Prospectus and the documents incorporation by reference includes, among other things, statements relating to:

 

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the Corporation’s expectations regarding its proposed listing of the Common Shares on Nasdaq;

 

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the impact of the COVID-19 pandemic (“COVID-19”) on the Corporation’s business;

 

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the Corporation’s business strategy and growth plans;

 

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the Corporation’s capital expenditures and operations;

 

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the Corporation’s belief that expanding sales across the Corporation’s distribution network in Canada and the United States is a critical element of the Corporation’s growth strategy;

 

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the anticipated production volume capacities of VERY GOOD’s production facilities in Vancouver, British Columbia (the “Rupert Facility”) in Patterson, California (the “Patterson Facility”) and the production facility located in Esquimalt, British Columbia, and the Corporation’s ability to scale and increase production output and the timing thereof;

 

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expectations regarding the number of production lines and numbers of SKUs to be produced at the Rupert Facility and the Patterson Facility;

 

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timing for the commencement of food production at the Patterson Facility and on the second production line at the Rupert Facility;

 

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the Corporation’s ability to increase wholesale distribution in Canada and in the United States;

 

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plans for, and the anticipated timing of, an eCommerce sales launch in the European Union and further international expansion;

 

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plans for and the anticipated benefits of VERY GOOD’s product innovation centre at Mount Pleasant including the ability to rapidly introduce new creative products into the market (“Mount Pleasant”);

 

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the anticipated timing for opening of the Mount Pleasant flagship butcher shop;

 

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the Corporation’s commitment to corporate responsibility;

 

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the Corporation’s ability to become a “Certified B Corporation”;

 

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VERY GOOD’s acquisition strategy;

 

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plans for, and the timing of, the retail rollout of VERY GOOD’s new “Butcher’s Select” gluten and soy free line of products and the benefits the Corporation expects to derive therefrom including the ability of the Butcher’s Select brand to strengthen VERY GOOD’s competitive position and compete against leading brand products;

 

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expectations regarding the scaling of the Corporation’s retail network to a target of greater than 3,000 retail stores and 15,000 points of distribution by the end of 2021 in Canada and the United States;

 

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the strength and benefits of the Corporation’s eCommerce platform and the ability to complete over 5,000 eCommerce orders per week;

 

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the ongoing discussions with major US retailer banners regarding the distribution of the Corporation’s products;

 

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the Corporation’s plans to obtain sustainability certifications and be both carbon and plastic neutral in the future;

 

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the expected timing for non-GMO certification;

 

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expectations regarding the Corporation’s ability to use the Victoria Butcher Shop & Restaurant (as defined in the AIF) as a template for the opening of additional locations across North America;

 

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the Corporation’s expectations regarding any material variances in the use of proceeds from what was disclosed in the Corporation’s short form prospectus dated June 25, 2021 (the “June 2021 Prospectus”);

 

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continuing to strategically register trademarks; and

 

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expectations regarding the Corporation’s credit facility of up to $70,000,000 (the “Credit Facility”).

Forward-looking information is based on the Corporation’s opinions, estimates and assumptions in light of the Corporation’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we currently believe are appropriate and reasonable in the circumstances. Despite a careful process to prepare and review the forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. Certain assumptions in respect of the impact of COVID-19; no material deterioration in general business and economic conditions; no material fluctuations of interest rates and foreign exchange rates; continued strong demand for the Corporation’s products; planned capital projects such as Mount Pleasant, the Patterson Facility, the Rupert Facility and the construction, costs, schedules, approvals and anticipated benefits relating thereto; the availability of sufficient capital to fund capital requirements associated with existing operations and capital projects; the ability to obtain necessary equipment, production inputs and labour; growth plans; the ability to retain senior management and other key personnel; the competitive environment conditions and the Corporation’s ability to position VERY GOOD competitively; the execution of the Corporation’s business strategy and growth plans and the impact thereof; future performance including future financial objectives; and food safety and regulatory compliance are all material assumptions made in preparing forward-looking information and management’s expectations.

Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that we considered appropriate and reasonable as of the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the following risk factors described in greater detail under the heading entitled “Risk Factors” in this Prospectus and the documents incorporated by reference herein, such as:

 

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the impacts of the ongoing COVID-19 pandemic;

 

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the Corporation’s potential failure to successfully establish, or potential disruptions at, the Corporation’s facilities;

 

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the Corporation’s need for significant additional funding and the Corporation’s negative cash flow from operations;

 

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risks relating to the Credit Facility;

 

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the Corporation’s history of losses;

 

 

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discretion over use of proceeds;

 

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the loss of members of the Corporation’s management team or other key personnel;

 

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the highly competitive nature of the plant-based industry;

 

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limited or disrupted supply of raw materials including key ingredients;

 

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inability to scale production and manage the Corporation’s supply chain;

 

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the rapid growth of the Corporation’s business and the Corporation’s ability to meet growth goals;

 

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the Corporation’s acquisition strategy and ability to integrate new business;

 

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the Corporation’s reliance on third-party logistics providers;

 

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food safety and consumer health;

 

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the Corporation’s ability to protect its trademarks or other intellectual property rights;

 

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the Corporation’s increasing reliance on distributors;

 

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the effectiveness of the Corporation’s marketing efforts including digital marketing and social media campaigns;

 

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inability to protect the Corporation’s brand value and reputation;

 

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failure to successfully expand to new markets;

 

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failure to comply with applicable product labelling, marketing and advertising regulations;

 

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the Corporation’s inability to develop and market new products and improvement to existing products;

 

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failure to acquire or retain customers across the Corporation’s distribution channels;

 

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the effects of consolidation in the retail grocer sector;

 

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the Corporation’s failure to comply with laws and regulations;

 

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disruptions affecting the Corporation’s information technology systems and eCommerce business;

 

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claims made against the Corporation, which may result in litigation;

 

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the impacts of climate change;

 

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insurance-related risks;

 

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leasing commercial and retail space;

 

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consumer trends;

 

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changes in the general economic conditions;

 

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union attempts to organize the Corporation’s employees;

 

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failure to meet social responsibility metrics or ESG benchmarks;

 

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counterparty risk;

 

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changes in accounting standards;

 

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volatility in the market price for Common Shares;

 

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future equity sales;

 

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no cash dividends for the foreseeable future;

 

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dilution; and

 

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the forward-looking information in this Prospectus or in the documents incorporated by reference herein may prove inaccurate.

 

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If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. The opinions, estimates or assumptions referred to above and described in greater detail in “Risk Factors” should be considered carefully by readers.

Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this Prospectus and in the documents incorporated by reference herein represents the Corporation’s expectations as of the date of this Prospectus (or as the date they are otherwise stated to be made) and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada.

All of the forward-looking information contained in this Prospectus and in the documents incorporated by reference herein is expressly qualified by the foregoing cautionary statements. Investors should read this entire prospectus and consult their own professional advisors to ascertain and assess the income tax, legal, risk factors and other aspects of their investment in the Securities.

FINANCIAL INFORMATION

All dollar amounts set forth in this Prospectus and in the documents incorporated by reference herein are in Canadian dollars unless otherwise indicated, references to “dollars”, or “$” are to Canadian dollars. All financial information in this Prospectus and in the documents incorporated by reference herein has, unless stated otherwise, been derived from the financial statements presented in accordance with IFRS, which differs from United States generally accepted accounting principles.

DOCUMENTS INCORPORATED BY REFERENCE

Information has been incorporated by reference in this Prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Chief Financial Officer of The Very Good Food Company Inc., at 2748 Rupert Street, Vancouver British Columbia, Canada, V5M 3T7 (Telephone: 1-855-526-9254) and are also available electronically under the Corporation’s profile at www.sedar.com. Documents filed with, or furnished to, the SEC are available through the SEC’s Electronic Data Gathering and Retrieval System at www.sec.gov.

The following documents of the Corporation, which have been filed with Canadian securities commissions or similar authorities in each of the provinces and territories of Canada and filed as exhibits to the Registration Statement, are specifically incorporated by reference in, and form an integral part of, this Prospectus:

 

a)

the Corporation’s audited annual consolidated financial statements as at December 31, 2020 and 2019, together with the independent auditor’s report thereon and the notes thereto;

 

b)

the independent auditor’s report on the Corporation’s audited consolidated financial statements as at December 31, 2019 and 2018;

 

c)

the Corporation’s management’s discussion and analysis of its financial condition and results of operations for the years ended December 31, 2020 and 2019;

 

 

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d)

the Corporation’s annual information form (“AIF”) for the year ended December 31, 2020;

 

e)

the Corporation’s unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2021 and 2020, together with the notes thereto (the “Q2 Financial Statements”);

 

f)

the Corporation’s management’s discussion and analysis of its financial condition and results of operations for the three and six months ended June 30, 2021 and 2020 (the “Q2 MD&A”); and

 

g)

the Corporation’s management information circular (the “Management Circular”) dated May 25, 2021 prepared in connection with the annual and special meeting of shareholders of the Corporation held on June 29, 2021.

Any document of the type referred to in section 11.1 of Form 44-101F1 of National Instrument 44-101 – Short Form Prospectus Distributions (other than confidential material change reports, if any) filed by the Corporation with the securities commissions or similar regulatory authorities in Canada after the date of this Prospectus and all Prospectus Supplements, disclosing additional or updated information filed pursuant to the requirements of applicable securities legislation in Canada and during the period that this Prospectus is effective, shall be deemed to be incorporated by reference in this Prospectus. In addition, any “template version” of “marketing materials” (as defined in National Instrument 41-101 – General Prospectus Requirements) filed after the date of a Prospectus Supplement and prior to the termination of the offering of Securities to which such Prospectus Supplement relates, shall be deemed to be incorporated by reference into such Prospectus Supplement. The documents incorporated or deemed to be incorporated herein by reference contain meaningful and material information relating to the Corporation and prospective purchasers of Securities should review all information contained in this Prospectus and the documents incorporated or deemed to be incorporated herein by reference.

Upon a new annual information form and related annual consolidated financial statements being filed by the Corporation with the applicable securities regulatory authorities during the duration that this Prospectus is effective, the previous annual information form, the previous annual consolidated financial statements and all interim consolidated financial statements, and in each case the accompanying management’s discussion and analysis, any information circular (other than relating to an annual meeting of shareholders of the Corporation) filed prior to the commencement of the financial year of the Corporation in which the new annual information form is filed and material change reports filed prior to the commencement of the financial year of the Corporation in which the new annual information form is filed shall be deemed no longer to be incorporated into this Prospectus for purposes of future offers and sales of Securities under this Prospectus. Upon interim consolidated financial statements and the accompanying management’s discussion and analysis being filed by the Corporation with the applicable securities regulatory authorities during the duration that this Prospectus is effective, all interim consolidated financial statements and the accompanying management’s discussion and analysis filed prior to the new interim consolidated financial statements shall be deemed no longer to be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities under this Prospectus. Upon a new information circular relating to an annual meeting of shareholders of the Corporation being filed by the Corporation with the applicable securities regulatory authorities during the duration that this Prospectus is effective, the information circular for the previous annual meeting of shareholders of the Corporation shall be deemed no longer to be incorporated by reference into this Prospectus for purposes of future offers and sales of Securities under this Prospectus.

In addition, any document or information included in any report on Form 6-K or Form 40-F (or any respective successor form) that is filed with or furnished to the SEC, as applicable, pursuant to the U.S. Securities Exchange Act of 1934, as amended (the “U.S. Exchange Act”) after the date of this Prospectus, shall be deemed to be incorporated by reference the Registration Statement (in the case of Form 6-K, if and to the extent such incorporation by reference is expressly set forth therein).

A Prospectus Supplement containing the specific terms of an offering of Securities and other information relating to the Securities will be delivered to prospective purchasers of such Securities together with this Prospectus to

 

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the extent required under applicable securities laws. Each Prospectus Supplement will be incorporated by reference into this Prospectus for the purposes of securities legislation as of the date of the Prospectus Supplement and only for the purposes of the distribution of the Securities to which the Prospectus Supplement pertains.

Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained herein, or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any statement so modified or superseded shall not constitute a part of this Prospectus, except as so modified or superseded. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of such a modifying or superseding statement shall not be deemed an admission for any purpose that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made.

DOCUMENTS FILED AS PART OF THE REGISTRATION STATEMENT

The following documents have been, or will be, filed with the SEC as part of the Registration Statement: (1) the documents listed under “Documents Incorporated by Reference”; (2) the consents of KPMG LLP, DMCL, Chartered Professional Accountants and Torys LLP; (3) the form of Debt Indenture (as defined below) for any Debt Securities that may be offered hereunder; and (4) powers of attorney from certain of the Corporation’s directors and officers. A copy of the underwriting agreement for offerings under this Prospectus, and, as applicable, the warrant indenture for offerings of Warrants, the subscription receipt agreement for offerings of Subscription Receipts, any unit agreement for offerings of Units, and/or any supplemental indenture to the Debt Indenture and/or form of note for offerings of Debt Securities, will be filed by post-effective amendment to the Registration Statement or by incorporation by reference to documents filed or furnished with the SEC under the U.S. Exchange Act.

AVAILABLE INFORMATION

The Corporation files reports and other information with the securities commissions and similar regulatory authorities in each of the provinces and territories of Canada. The Corporation has concurrently filed with the SEC the Registration Statement with respect to the Securities offered pursuant to this Prospectus. This Prospectus, which constitutes a part of the Registration Statement, does not contain all of the information contained in the Registration Statement, certain items of which are contained in the exhibits to the Registration Statement as permitted by the rules and regulations of the SEC. Statements included or incorporated by reference in this Prospectus about the contents of any contract, agreement or other documents referred to are not necessarily complete, and in each instance the prospective purchasers should refer to the exhibits for a more complete description of the matter involved.

The Corporation is subject to the information requirements of applicable Canadian securities legislation and, in accordance therewith, files reports and other information with the applicable securities regulators in Canada. Upon effectiveness of the Registration Statement, the Corporation will be subject to the information requirements of the U.S. Exchange Act and will file reports and information with the SEC. Under the MJDS adopted by the United States and Canada, documents and other information that the Corporation files with the SEC may be prepared in accordance with the disclosure requirements of Canada, which are different from those of the United States. As a “foreign private issuer” within the meaning of rules made under the U.S. Exchange Act, the Corporation will be exempt from the rules under the U.S. Exchange Act prescribing the furnishing and content of

 

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proxy statements, and the Corporation’s officers, directors and principal shareholders are exempt from the reporting and short swing profit recovery provisions contained in Section 16 of the U.S. Exchange Act. In addition, the Corporation will not be required to publish financial statements as promptly as United States companies.

The SEC maintains an Internet site at www.sec.gov that makes available reports and other information that the Corporation files or furnishes electronically with it. A prospective purchaser may also read and download any public document that the Corporation has filed with the Canadian securities regulatory authorities under the Corporation’s profile on the SEDAR at www.sedar.com. The Corporation’s Internet site can be found at www.verygoodfood.com. The information on the Corporation’s website is not incorporated by reference into this Prospectus and should not be considered a part of this Prospectus, and the reference to the Corporation’s website in this Prospectus is an inactive textual reference only.

Prospective purchasers should rely only on information contained in this Prospectus or in the documents incorporated by reference herein and any applicable Prospectus Supplement and any “free writing prospectus” within the meaning of U.S. securities laws. The Corporation has not authorized anyone to provide prospective purchasers with different information. The Corporation is not making an offer of the Securities in any jurisdiction where the offer is not permitted. Prospective purchasers should not assume that the information contained in this Prospectus is accurate as of any date other than the date on the front of this Prospectus, unless otherwise noted herein or as required by law. It should be assumed that the information appearing in this Prospectus, any Prospectus Supplement or any “free writing prospectus”, and the documents incorporated herein and therein by reference are accurate only as of their respective dates. The business, financial condition, results of operations and prospects of the Corporation may have changed since those dates.

THE VERY GOOD FOOD COMPANY INC.

VERY GOOD is an emerging plant-based food technology company that produces nutritious and delicious plant-based meat and cheese products under its core brands: The Very Good Butchers and The Very Good Cheese Co. Further information regarding the Corporation and its business is set out in the AIF under “Description of the Business”, which is incorporated by reference herein.

Recent Developments

On October 4, 2021, VERY GOOD announced that it had submitted an initial application to list the Common Shares on Nasdaq. The listing of the Common Shares on Nasdaq remains subject to the review and approval of the listing application and the satisfaction of all applicable listing and regulatory requirements, including approval by the SEC of the Registration Statement. The Corporation will continue to maintain the listing of the Common Shares on the TSXV under the symbol “VERY”.

CONSOLIDATED CAPITALIZATION

The following table sets forth the unaudited consolidated capitalization of the Corporation as at September 30, 2021. This table should be read in conjunction with the Q2 Financial Statements and Q2 MD&A incorporated by reference in this Prospectus.

 

Designation (authorized)		As at September 30, 2021 (unaudited)
Common Shares (unlimited)		$62,889,218 (103,456,964 Common Shares)
Options(1)		8,601,131 Options
Warrants(2)		5,706,558 Warrants
Loan Capital(3)		$3,473,520

 

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Notes:

 

(1)	As of the date hereof, there were 8,601,131 options (“Options”) outstanding pursuant to the Corporation’s stock option plan, each Option entitling the holder to purchase one Common Share at exercise prices ranging from $0.25 to $9.07 per Common Share. See “Prior Sales”.

(2)	As of the date hereof, there were 5,706,558 warrants outstanding. See “Prior Sales”.

(3)

Represents amount drawn under the Credit Facility as at the date hereof. The Credit Facility consists of a revolving credit facility available to a maximum of $20,000,000 and a term loan available to a maximum of $50,000,000 (the “Term Loan”). VERY GOOD intends to use the Credit Facility for general corporate purposes including, among other things, supporting working capital, making potential acquisitions and, in the case of the Term Loan, purchasing equipment for the Patterson Facility and other production facilities. Drawdowns and the receipt of proceeds under the Credit Facility are subject to the Corporation satisfying certain terms and conditions thereunder.

USE OF PROCEEDS

Unless we otherwise indicate in a Prospectus Supplement relating to a particular offering, we currently intend to use the net proceeds from the sale of the Securities for general corporate purposes, including funding ongoing operations at our facilities, further eCommerce and wholesale expansion efforts, working capital requirements, repaying indebtedness outstanding from time to time, completing acquisitions and for other corporate purposes to be set forth in the Prospectus Supplement relating to the offering of the Securities. The Corporation does not expect any material variances in the use of proceeds from what was disclosed in the June 2021 Prospectus.

Our intended use of proceeds accounts for the impacts and effects of COVID-19 that are currently known to us. Future developments, which we cannot currently predict, may require us to adjust, delay or postpone, either temporarily or permanently, any one of the principal purposes set out above. New or revised government and health directives, the availability of equipment, trades and staff for our facilities, and interruptions in our supply chain and distribution network, are all factors that could have an adverse impact on our plans. See “Risk Factors – Discretion in Use of Proceeds” and the risk factors under the heading “Risk Factors”.

More detailed information regarding the use of proceeds from the sale of Securities, including any determinable milestones at the applicable time, will be described in a Prospectus Supplement and will include reasonable detail of the principal purposes of the proposed use of net proceeds in accordance with the requirements of Section 4.2 of Form 44-101F1 – Short Form Prospectus (“Form 44-101F1”), as well as the business objectives expected to be accomplished using the net proceeds of such offering and each significant event that must occur to accomplish such business objective, including the cost thereof, in accordance with Section 4.7 of Form 44-101F1. All expenses relating to an offering of Securities and any compensation paid to underwriters, dealers or agents, as the case may be, will be paid out of the proceeds from the sale of such Securities, unless otherwise stated in the applicable Prospectus Supplement. We may also, from time to time, issue securities otherwise than pursuant to a Prospectus Supplement.

We had a negative operating cash flow for the financial years ended December 31, 2020, 2019 and 2018 and for the three and six months ended June 30, 2021. To the extent that we have negative cash flow in any future period, the Corporation will use net proceeds from a particular offering to fund such negative cash flow. See “Risk Factors – Negative Cash Flow from Operations”.

SELLING SECURITYHOLDERS

This Prospectus may also, from time to time, relate to the offering of the Common Shares by way of a secondary offering (each, a “Secondary Offering”) by one or more Selling Shareholders. The terms under which Common Shares may be offered by Selling Shareholders will be described in the applicable Prospectus Supplement. The

 

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Prospectus Supplement for or including any Secondary Offering will include, without limitation, where applicable: (i) the names of the Selling Shareholders; (ii) the number and type of Common Shares owned, controlled or directed by each Selling Shareholder; (iii) the number of Common Shares being distributed for the accounts of each Selling Shareholder; (iv) the number of Common Shares to be owned, controlled or directed by each Selling Shareholder after the distribution and the percentage that number or amount represents out of the total number of outstanding Common Share; (v) whether the Common Shares are owned by the Selling Shareholders, both of record and beneficially, of record only or beneficially only; (vi) if a Selling Shareholder purchased any of the Common Shares held by him, her or it in the 12 months preceding the date of the Prospectus Supplement, the date or dates the Selling Shareholder acquired the Common Shares; (vii) if a Selling Shareholder acquired the Common Shares held by him, her or it in the 12 months preceding the date of the Prospectus Supplement, the cost thereof to the Selling Shareholder in the aggregate and on a per Common Share basis; and (viii) the Prospectus Supplement will contain, if applicable, the disclosure required by Item 1.11 of Form 44-101F1 – Short Form Prospectus, and, if applicable, each Selling Shareholder will file a non-issuer’s submission to jurisdiction form with the corresponding Prospectus Supplement.

PLAN OF DISTRIBUTION

The Corporation may from time to time during the 25-month period that this Prospectus, including any amendments thereto, remains valid, offer for sale and issue up to an aggregate of $100,000,000 in Securities hereunder. To the extent there are any Secondary Offerings, the aggregate amount of Securities that may be offered and sold by the Corporation hereunder shall be reduced by the aggregate amount of such Secondary Offerings.

The Corporation may offer and sell the Securities to or through underwriters or dealers purchasing as principals and may also sell directly to one or more purchasers or through agents or pursuant to applicable statutory exemptions. The Prospectus Supplement relating to a particular offering of Securities will identify each underwriter, dealer or agent, as the case may be, engaged by the Corporation in connection with the offering and sale of the Securities, the Selling Shareholders, if any, and will set forth the terms of the offering of such Securities, including, to the extent applicable, any fees, discounts or any other compensation payable to underwriters, dealers or agents in connection with the offering, the method of distribution of the Securities, the initial issue price, the proceeds that the Corporation will receive and any other material terms of the plan of distribution. Any initial offering price and discounts, concessions or commissions allowed or reallowed or paid to dealers may be changed from time to time.

Similarly, one or more Selling Shareholders may sell Common Shares to or through underwriters or dealers purchasing as principals and may also sell the Common Shares to one or more purchasers directly, through statutory exemptions, or through agents designated from time to time. See “Selling Shareholders”.

In addition, Securities may be offered and issued in consideration for the acquisition of other businesses, assets or securities by the Corporation or one of its subsidiaries. The consideration for any such acquisition may consist of the Securities separately, a combination of Securities or any combination of, among other things, Securities, cash and assumption of liabilities.

Securities may be sold from time to time in one or more transactions at a fixed price or prices or at prices which may be changed or at market prices prevailing at the time of sale, at prices related to such prevailing prices or at negotiated prices. The price at which the Securities will be offered and sold may vary from purchaser to purchaser and during the period of distribution.

In connection with the sale of the Securities, underwriters, dealers or agents may receive compensation from the Corporation or from other parties, including in the form of underwriters’, dealers’ or agents’ fees, commissions or concessions. Underwriters, dealers and agents that participate in the distribution of the Securities may be

 

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deemed to be underwriters for the purposes of applicable Canadian securities legislation and any such compensation received by them from the Corporation and any profit on the resale of the Securities by them may be deemed to be underwriting commissions.

In connection with any offering of Securities (other than an ATM Distribution), except as otherwise set out in a Prospectus Supplement relating to a particular offering of Securities, the underwriters, dealers or agents, as the case may be, may over-allot or effect transactions intended to fix, stabilize, maintain or otherwise affect the market price of the Securities at a level other than those which otherwise might prevail on the open market. Such transactions may be commenced, interrupted or discontinued at any time. No underwriter, dealer or agent involved in an ATM Distribution of any of the Securities under a Prospectus Supplement, and no affiliate of any such underwriter, dealer or agent, and no person acting jointly or in concert with any such underwriter, dealer or agent, will over-allot any Securities in connection with their distribution or effect any other transaction that is intended to stabilize or maintain the market price of the Securities being distributed.

Underwriters, dealers or agents who participate in the distribution of the Securities may be entitled, under agreements to be entered into with the Corporation, to indemnification by the Corporation against certain liabilities, including liabilities under Canadian securities legislation and the U.S. Securities Act, or to contribution with respect to payments which such underwriters, dealers or agents may be required to make in respect thereof. Such underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, the Corporation in the ordinary course of business.

Unless otherwise specified in the applicable Prospectus Supplement, each series or issue of Securities (other than Common Shares) will be a new issue of Securities with no established trading market. Accordingly, there is currently no market through which the Securities (other than Common Shares) may be sold and purchasers may not be able to resell such Securities purchased under this Prospectus. This may affect the pricing of such Securities in the secondary market, the transparency and availability of trading prices, the liquidity of such Securities and the extent of issuer regulation. See “Risk Factors”.

This Prospectus constitutes a public offering of these Securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such Securities.

EARNINGS COVERAGE RATIO

Earnings coverage ratios will be provided in the applicable Prospectus Supplement relating to any offering of Debt Securities having a term to maturity in excess of one year, as required by applicable securities laws.

DESCRIPTION OF SECURITIES

Description of Common Shares

VERY GOOD is authorized to issue an unlimited number of Common Shares. As at the date of this Prospectus, there were 104,453,964 Common Shares issued and outstanding. Each Common Share carries the right to one vote. Holders of Common Shares are entitled to receive any dividends declared by the board of directors of the Corporation in respect of the Common Shares. In the event of the liquidation, dissolution or winding-up of the Corporation, holders of Common Shares are also entitled to receive, on a pro rata basis, the remaining property and assets of the Corporation available for distribution after payment of all its liabilities.

The outstanding Common Shares are listed on the TSXV under the trading symbol “VERY.V”, on the OTCQB under the trading symbol “VRYYF” and on the Frankfurt Stock Exchange under the trading symbol “OSI”. The Corporation has also applied to list the Common Shares on Nasdaq under the symbol “VGFC”. The listing of the Common Shares on Nasdaq is dependent upon satisfaction of all necessary listing requirements.

 

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